In an opinion issued on February 26, 2014, a Florida Appeals Court ruled that a plaintiff was not entitled to retain an $80,000 settlement because he disclosed the settlement to his college-aged daughter, who then posted the news on her Facebook page. In effect, the over-sharing on Facebook cost $80,000.

The case arises out of a 2011 lawsuit filed by Patrick Snay against Gulliver Schools, Inc., alleging age discrimination and retaliation under the Florida Civil Rights Act after the school declined to renew Snay's contract to serve as the school's headmaster. As part of the November 2011 settlement, the parties executed a general release and settlement agreement, where the school agreed to pay:
  • Back pay: $10,000 - Check no. 1
  • Settlement funds to Mr. Snay: $80,000 - Check no. 2
  • Mr. Snay's attorneys: $60,000 - Check no. 3
The settlement agreement included the following confidentiality language:
13. Confidentiality. . . [T]he plaintiff shall not either directly or indirectly, disclose, discuss or communicate to any entity or person, except his attorneys or other professional advisors or spouse any information whatsoever regarding the existence or terms of this Agreement. . . A breach . . .will result in disgorgement of the Plaintiffs portion of the settlement Payments.
In effect, a breach of the confidentiality clause would lead to the disgorgement of the $80,000 paid to Mr. Snay.

As the Appeals court explained:
Only four days after the agreement was signed, on November 7, 2011, Gulliver notified Snay that he had breached the agreement based on the Facebook posting of Snay’s college-age daughter, wherein she stated:
Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.
This Facebook comment went out to approximately 1200 of the daughter’s Facebook friends, many of whom were either current or past Gulliver students.

. . .

On November 15, 2011, Gulliver sent a letter to Snay's counsel, stating that it was tendering the attorney's fees portion of the parties' agreement but was not going to tender Snay's portion because he had breached the confidentiality provision. That letter included a Joint Stipulation for Dismissal which reconfirmed in part that "the parties have settled this action," and Snay signed off on it and returned it to Gulliver. The action was dismissed with a reservation of jurisdiction for enforcement of the settlement agreement.
Then in June 2012, Snay filed a motion to enforce the settlement agreement, arguing that neither his statement to his daughter nor her post on Facebook constituted a breach of the confidentiality provision. The lower court agreed with Snay.

But, the Florida Third District Court of Appeal disagreed with the lower court and reversed, holding that, "the plain, unambiguous meaning of paragraph 13 of the agreement between Snay and the school is that neither Snay nor his wife would 'either directly or indirectly' disclose to anyone (other than their lawyers or other professionals) 'any information' regarding the existence or the terms of the parties’ agreement."

Snay, despite signing the agreement, chose to disclose the information to his daughter. Snay explained in a deposition that he had good reason to tell his daughter because she was retaliated against by the school and that Snay and his wife "understood the confidentiality . . .  [but] needed to tell [the daughter] something." However, the Appellate Court noted that Snay's deposition clearly established that he breached the confidentiality provision and the fact that "he knew he needed to tell his daughter something did not excuse this breach."

Take-a-Ways
  • This decision highlights the need for contracts to reflect the understanding and needs of the parties. The Appellate Court noted that, "There [was] no evidence that [Snay] made this need [to tell his daughter] known to the school or to his or its attorneys so that the parties might hammer out a mutually acceptable course of action in the agreement." Snay's deposition testimony showed that he and his wife were acutely aware that they would need to tell their daughter something about the settlement, yet their agreement failed to reflect this understanding.
  • Similarly, parties can also run into issues when they include provisions that are not immediately applicable to their transaction. In many 'form' business associate agreements for example, there are often provisions included that do not apply to a particular business associate given the context of the transaction and the HIPAA covered services being provided. Parties should consider removing such language to minimize risks of ambiguity or misapplication of particular language should the relationship fall apart.
  • Confidentiality provisions should be taken seriously and parties should take appropriate steps to protect information deemed confidential.
  • This case is yet another example of the troubles that can be caused by over-sharing information on social media. Once information is released online, there is no taking it back and such disclosures could lead to loss of settlement funds (as in this case), money damages, or termination of employment.
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See Gulliver Schools, Inc. v. Patrick Snay, Case No. 3D13-1952 (Third Dist. App. Feb. 26, 2014). (PDF)
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Posted on: March 4, 2014
By: Tatiana Melnik