In resolutions of disputes between both unionized and non-union employees, confidentiality provisions are often employed and, depending on the circumstances, they may be viewed as a critical component of any settlement. I have written previously about the enforcement of confidentiality provisions (see Silence is Golden – what happens when confidentiality provisions are breached?). The case which prompted that blog post involved relatively small amounts of money.
Two recent decisions have upped the ante considerably and, in each case, the failure to respect a confidentiality provision resulted in significant loss for the employee committing the breach. Many media outlets (for example, see CNN Report ) have reported the story of Patrick Snay, a gentleman in Florida who lost the $80,000 settlement of his claim against his former employer because of his daughter’s decision to talk about the matter on Facebook. Mr. Snay had been the headmaster of Gulliver Preparatory School in Miami however his contract of employment was not renewed. Unhappy, Mr. Snay alleged that the decision constituted age discrimination. The agreement resolving the matter provided him with backpay, payment of his legal fees and $80,000 in settlement of his claim of discrimination.
The settlement between the parties included a detailed confidentiality provision which precluded Mr. and Mrs. Snay from disclosing either the existence of the settlement or its terms and conditions to any third party other than legal counsel. Notwithstanding this provision, the Snays told their daughter who had been a student at the School of the settlement. Young Ms. Snay promptly posted the following to her Facebook page:
Mama and Papa Shay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.
Not surprisingly in the age of social media, word got back to the School of the posting equally promptly. The School took the position that the confidentiality provision was breached and refused to pay the settlement. Mr. Snay sought to enforce the settlement and was initially successful. The School appealed and Florida’s Third District Court of Appeal has overturned the lower court ruling and upheld the School’s position that it should not be required to make the $80,000 payment (see: Snay Court Decision).
The second case of interest occurred a little closer to home. Jan Wong is a well-known journalist who wrote for The Globe and Mail. Unfortunately, Ms. Wong began to deal with depression and in the final result her employment was terminated. Ms. Wong grieved The Globe’s actions through her Union and lengthy negotiations were then undertaken with the result that Ms. Wong was provided with an unspecified, but apparently significant, payment. Included in the Minutes of Settlement between the parties were mutual non-disparagement and confidentiality provisions together with a specific requirement that Ms. Wong repay the settlement funds in the event that she breached these obligations. The confidentiality provision required that Ms. Wong could not disclose the terms of the settlement to anyone other than her professional advisors and immediate family members.
Subsequently, Ms. Wong wrote a book, “Out of the Blue” which chronicled the story of her depression as well as her dispute with The Globe. While Ms. Wong made a number of statements which The Globe considered to be a breach of her obligation, four quotes from the book in particular became the focus of the arbitration hearing in which The Globe sought repayment of the settlement funds. These were:
“… I can’t disclose the amount of money I received.” (Page 235)
“I’d just been paid a pile of money to go away…” (Page 249)
“Two weeks later a big fat check landed in my account.” (Page 236)
“Even with a vastly swollen bank account…” (Page 237)
Ultimately, the labour arbitrator deciding the repayment issue agreed with The Globe’s position and Ms. Wong was required to repay the “pile of money” she had received in the settlement. Ms. Wong’s argument that simply not revealing the actual dollar amount of the settlement meant that she was not in violation of her obligation was rejected. It is worth noting that Ms. Wong has subsequently stated that she was unhappy with the Union’s representation of her interest and the arbitration process but it is hard to see any flaws in the logic of the Award.
Finally, it is worth noting that the story was widely discussed in the media (see, for example, Toronto Star Story) and the arbitration decision has been circulated in the labour law community. The results in these cases and the level of notoriety given to stories such as Ms. Wong’s and Mr. Snay are likely to mean that employers are going to be emboldened to seek confidentiality provisions in more cases, especially those in which some significant interest, whether monetary or reputational, is at stake. It’s clear that in the right circumstances, such provisions can provide real protection by acting as a disincentive and a real remedy in the event that disincentive isn’t enough.
For further background and points to consider, I hope you’ll go back and use the link at the beginning of this item to visit my previous blog on confidentiality provisions.