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Social Networking and Settlement Agreements

Tue April 29, 2014 Publications

A great deal of civil litigation, including employment litigation, ends in settlement agreements, not a trial. While a great deal of effort is often put into negotiating the dollars involved in the settlement agreement, an identical amount of attention must be placed on the so-called “boilerplate” provisions. In the age of social networking, the boilerplate confidentiality provisions are increasingly important.

Gulliver Schools, Inc. v. Snay, 39 Fla. L. Weekly D457, 2014 WL 769030 (Fla. 3d DCA Feb. 26, 2014) shows how confidentiality provisions can have more bite due to the widespread use of social networking websites, such as Facebook. The Plaintiff in the case, Patrick Snay, was a headmaster at Gulliver. When Snay’s 2010-2011 contract was not renewed, he filed a complaint alleging age discrimination and retaliation. Pursuant to a settlement agreement negotiated in November, 2011, Snay was to receive $10,000 in back pay and $80,000 as an additional payment. In addition to the payment, the settlement agreement had a confidentiality provision that required the “disgorgement of the Plaintiffs’ portion of the settlement proceeds” if there was any communication “directly or indirectly” regarding “the existence or terms of the Agreement.” Id. at 1.

Four days after the agreement was signed, Gulliver notified Snay of a breach based on the following post of Snay’s daughter, “Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.” Snay’s daughter had 1200 Facebook friends, many of them current or past Gulliver students. Due to the breach, Gulliver refused to pay the $80,000 to Snay, and an action was later brought to enforce the agreement. While this case received a great deal of attention in the media, left unremarked is that when Gulliver notified Snay of the breach, Snay still had three days to unilaterally revoke the settlement agreement, but chose not to do so. Id.

There were factual disputes about the extent of the information divulged, and the truthfulness of the daughter’s post. The Court noted that Snay’s position was that “he never told the daughter that he had ‘won’ the case and the daughter did not go to Europe that summer, nor had she planned to do so.” Id. at *1 n.2. The Third District Court of Appeals, however, found these Social Networking and Settlement Agreementsfacts did not change the analysis, as revealing the settlement agreement to the daughter breached the clear language of the settlement agreement. This breach “advertise[d] to the Gulliver community that Snay had been successful in his … case against the school,” the exact thing the confidentiality agreement had been designed to prevent. Id. at *2.

While this case generated a fair amount of media coverage, it is not remarkable, but a straight-forward application of contract law to the facts. The lesson for attorneys is that with social networking sites so prevalent today, clients need to be counseled carefully about all of the terms of the settlement agreement. Twenty years ago, Snay’s daughter likely would not have had a platform to broadcast the information, and any communications would not have been permanent. Further, settlement agreements must be scrutinized carefully for language that reflects the will of the parties, because settlement agreements are contracts that will be construed as written.