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From the ‘CORPORATE LAWYER NETWORK’ group on Linkedin, WEBROVER brings you an interesting post by Managing Partner, Atlanta Lawyer Group, BRIAN PASTOR and some of the interesting comments and insight that followed Brian’s Post. You may find it interesting too.
BRIAN’S POST:
DAUGHTER’S BRAGGING COST EMPLOYEE $80,000.00 SETTLEMENT
‘‘As reported in the Miami Herald – After making an age discrimination claim against an employer, the employee settled confidentially for $80,000.00. The employee’s daughter, before the settlement was paid, reportedly posted on Facebook “Mama and Papa Snay won the case against Gulliver,” she wrote. “Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.” Not happy, the employer refused to pay. The trial judge nonetheless ordered the employee to pay, but the Florida Court of Appeals reversed in favor of the employer on the basis of violation of the confidentiality clause. The case isn’t over because the employee can still appeal to the FL Supreme Court.
This case should be pulled and given to every employer and employee alike. 1. For employers, it’s a valuable tool to monitor social media post settlement. 2. It provides ammo to argue for a revision to settlement agreements to permit, for x time, the right to access and monitor employee’s (and family?) FB, twitter, and other social media for purpose of compliance (might limit this to attorney eyes only to make palatable – and have attorney or paralegal monitor periodically). 3. For employees, give this at settlement shows them real consequences of chatty family. What are your thoughts?
Do you agree social media be specifically written into all settlement agreements or contracts that include strict confidentiality?
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• Brian Pastor, MANAGING PARTNER, ATLANTALAWYERGROUP –
Now we have 20/20 hindsight the dad wishes he had. As lawyers, confidentiality clauses need to change with the times reflecting the risks created by Facebook, Twitter and texting.
• JOHN IKHIMIUKOR , GROUP LEGAL ADVISER & COMPANY SECRETARY AT NIGERIAN NAVY HOLDINGS LIMITED
Quite fascinating. However, It is hard to agree with the CA on the ground that the employee’s daughter wasn’t a party to the confidentiality agreement. It is trite to that whatever transpired between the employer and the employee was as much a matter within the purview of the whole family members, mostly that of the employee one would presume, albeit they not being party to the agreement. If the post was made directly by the employee, then he would have breached the confidentiality agreement. But this not being the case, it is all opined that the decision of the CA was wrong. Well, let’s wait for the SC. Though while we wait, as you suggested, there is a need to rethink the confidentiality clause in contract.
• Brian Pastor, Managing Partner, Atlanta
LawyerGroup –
The MH reported the dad stipulated and admitted he violated the confidentiality clause by telling his daughter, so violation was not a factual question.
–• Brian Pastor, Managing Partner, Atlanta
Lawyer Group
I think the point isn’t the outcome (presently in favor of the former employer). The real lesson is we need better tools for both sides in a confidentiality agreement.
•Kaliraj Sampath Kumar, Corporate Legal Counsel,Chennai, India
Referring to John’s comments – just as an analytical approach – isn’t it that “when the employee is bound by confidentiality clause, he presumes liability for third party (be it daughter or otherwise) who may get such info and is to ensure such third party is bound by confidentiality clause”?
• John Ikhimiukor, Group Legal Adviser &
Company Secretary at Nigerian Navy Holdings Limited
Regarding Kaliraj’s comment, it is correct. The only drawback is that the assumption is too simple and may not fit all situations.
What if a party had not been shown to be negligent or deliberate in giving out information? Am sure there are still exceptions to the general rule on vicarious liability. My argument was based on the initial information not containing the fact that the employee had admitted responsibility. It may have been different if the full proceedings and judgement were available so we are able to see what the parties real arguments were. Nevertheless, a better confidentiality clause regime in the interest of parties is of course necessary henceforth as suggested by Brian, given the judgment.
• Lisa Konetchy, Corporate Counsel at
Aspect Properties
This is why adult matters should remain just that. I understand that this was his daughter but some people are not mature or adult enough to know when to disclose and when not to. Also with being humble. Even if you win you win to prove a point and the unfairness of the employment system that is hidden is not fair for some, but you win to prove the point, and not the money.
-• Jim Brashear, General Counsel, Corporate and Information Technology Law
Technically, it was her father’s decision to share the settlement terms with his daughter that cost him the $80K. He breached the confidentiality provision by telling her, although it was her FB post that revealed the breach to the defendants. http://www.3dca.flcourts.org/Opinions/3D13-1952.rh.pdf
A key lesson: there is no family members exception to confidentiality covenants.
• Kelphene Cunningham, Senior Partner,
Kelphene Cunningham & Company
This is most interesting. The daughter’s breach affects the confidentiality clause as it was the father who shared the terms of the settlement with her. It would be interesting to see what the S.C. Rules.
• Lisa Konetchy ,Corporate Counsel at Aspect Properties
In a house hold where someone is going through something like this though. Your daughter A- new you had this interview . B Knew why you did not get the job C- knew you had a great chance at winning, but in a house hold of even your spouses there is some information that if they know the A, the B and part of the C … how do you leave them out of the D, E and the F, unless it would of been ok for her to post it after when she was booking her flight because if part of the money was going to her, she knew where the money came from. I know not all “legal” but point is confidential against common sense of that child knowing where the money was coming from. When he walked in from the case with a smile on his face that would of been common sense.
• Jim Brashear, General Counsel, Corporate and Information Technology Law
Whatever the daughter deduced by connecting bits of non-confidential information likely would not have breached the confidentiality agreement. The father, however, admitted that he disclosed confidential information to his daughter. He told her specific terms of the settlement. Using common sense, he might have anticipated that he’d want to do that and negotiated in advance an exception to the confidentiality provision. In any case, he should have impressed on his daughter that what he shared was subject to a confidentiality agreement and further disclosure put the settlement in jeopardy. As a legal matter, regardless of family dynamics, it is not permissible to share with a spouse or family member information that is subject to confidentiality restrictions. People have been prosecuted for insider trading violations on that basis, for example.
• Nancy Fadling, MBA, HCM
JD Candidate Concord Law School of Kaplan University
Perhaps a provision within the settlement agreement should be proposed which restricts the claimant’s disclosure of the settlement amount to, for example, his parents, spouse or cohabitant. A typical negotiated resolution of this issue would be identify in the settlement agreement a limited universe of persons (spouse, parents, adult children) with whom the claimant already shares an ongoing financial relationship and to permit disclosure of the amount of settlement, and perhaps also the other terms of the settlement agreement, to such persons. That disclosure might be conditional upon each disclose agreeing, informally, to retain the confidence of the disclosure.
• Anton Desilva:
I think you made a mistake when you said” The trial judge nonetheless ordered the employee to pay…” It should read as “employer”.
Bottom line is if one party wants to keep the terms of the settlement confidential – for purposes of ensuring there is no formal admission of liability or to deter further claims by others or to save themselves from embarrassment or adverse publicity, they should insist on the terms being embargoed and ideally reflected in the Consent Judgment. Conditions should be imposed to ensure that the terms of the settlement are not to be disclosed to any third parties.
-•Brian Pastor Managing Partner, AtlantaLawyerGroup – Pastor, P.C.
Kaliraj – Dad had no contractual right to tell the daughter anything about the settlement. Dad admitted he breached the contract by telling the daughter. Dad is liable for damages that stem from his breach, which is different than him being liable for his daughter’s actions. I believe the contract provided that in the event of a breach, the Employer still had to pay Plaintiff’s attorney fees (odd), but dad would lose out on the 80k. As such, it appears to be a liquidated damages forfeiture clause (one where the amount given up is not really a reasonable pre-estimate of a damage that is difficult to assess). Illustration – under the contract, Dad tells his daughter, and she does NOT post on FB or tell another living soul, but Dad admits he told her, thus having violated the contract and forfeited $80k. This clause treats this the same as Dad telling daughter and her posting it on FB to 1200 of her friends may of whom attend the school where the father worked and the school which was the defendant in the lawsuit. This should have at least been tested under liquidated damages and forfeiture theory. ALL this aside though – the real issues are: drafting a confidentiality provision that has teeth (liquidated damages that will stand up?); and one that addresses FB, Twitter and Texting and practical monitoring of such by the party in who bargained for confidentiality. The FB, Twitter, Text monitoring for compliance is the heart of the issue. This is the change with the times issue.
Kaliraj Sampath Kumar, Corporate Legal Counsel,Chennai, India
“Dad is liable for damages that stem from his breach, which is different than him being liable for his daughter’s actions” – just being the argumentative devil (!), doesn’t the breach in itself “include” all consequential events that follow naturally…that is to mean father knowing that first disclosure to his daughter may lead to further disclosure to her friends, should have been aware of consequential actions…i thoroughly agree with you on water-tighting confidentiality clause in all future contracts..
Catherine Avery , CEO and Interior Designer, Space Planning, Branded Environments, Office Interior Design firm
Speaking as a business person not a lawyer, Dad breached the confidentiality of the agreement. A contract is a contract. My dad told me confidential things when I was in my late teens and early twenties. I absolutely understood that I was not to repeat those any where ever. And I never did. It’s a painful lesson for this Dad and his family to learn… It is sure to tighten confidentiality clauses in contract law. With social media, this has become a very, perhaps too, public world. It will be interesting to follow how corporate and contract law reacts to it.
• Brian Pastor,
I’m fascinated that the focus of a lot of the discussion is whether telling family members should or should not be in the clause. I often see spouse, attorney and tax advisor. Where, as here, the clause contained a liquidated damages provision, it’s easy enough to add that the Plaintiff is deemed in violation whether the disclosure was intentional or negligent by Plaintiff, spouse, advisors etc.
One take away here was the value of including a liquidated damages provision, though I wonder if the record included attacking it.
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Very nteresting thread.
These and much more you’d find in the Global Village known as the web.