Many parents spend countless hours trying to keep their children off social media sites. Patrick Snay, 69, can claim that his daughter’s busy fingers cost him $80,000. The former head of Guillver Preparatory School in Miami lost a settlement from a discrimination lawsuit against his former school. The agreement came with a confidentiality provision so the school’s lawyers were a bit put out to read a taunting Facebook posting from the daughter that bragged about the settlement and told them to “Suck it.” It did not quite work out that way. The case is Gulliver Sch., Inc. v. Snay, 2014 Fla. App. LEXIS 2595.
Snay filed an age discrimination action after his 2010-2011 contract was not renewed. A settlement was reached in November 2011 to pay him $10,000 in back pay, and an $80,000 settlement. Gulliver Schools also agreed to pay Snay’s attorneys a check for $60,000. That is when Snay’s daughter sent the following ditty to 1,200 Facebook followers, including current and former Gulliver students: “Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.”
The school’s lawyers were not inclined to follow the advice and declared a breach of the agreement. Snay and his wife agreed to the following provision:
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.
He received notice just four days after the signing of the settlement that he was now in breach.
Snay insisted that they had to inform their daughter because she had been “retaliated against” by Gulliver and “had quite a few psychological scars.” They felt that they had to tell her something. Snay went to court to enforce the settlement and won. However, the school appealed.
The Third District Court of Appeal reversed and found that Snay had violated confidentiality: “Snay violated the agreement by doing exactly what he had promised not to do. His daughter then did precisely what the confidentiality agreement was designed to prevent, advertising to the Gulliver community that Snay had been successful in his age discrimination and retaliation case against the school. . . Based on the clear and unambiguous language of the parties’ agreement and Snay’s testimony confirming his breach of its terms, we reverse the order entered below granting the Snays’ motion to enforce the agreement.”
The decision is very terse and does not explore the issue of the nature of the disclosure to the daughter or the idea that such a confirmation is implicitly permissible for a child. It simply found that they told a third party who informed 1500 people.
It is a tough case. Ideally, these agreements should include family members with the caveat that they agree to hold the information in confidence. Indeed, it seems be pretty harsh to stop a parent from telling a child of an agreement. Yet, the agreement was written in such harsh terms. Moreover, regardless of the understandable initial disclosure, the family was responsible for 1500 people being told. The court insisted that ” before the ink was dry on the agreement, and notwithstanding the clear language of section 13 mandating confidentiality, Snay violated the agreement by doing exactly what he had promised not to do. His daughter then did precisely what the confidentiality agreement was designed to prevent, advertising to the Gulliver community that Snay had been successful in his age discrimination and retaliation case against the school.” So the violation was telling his daughter and she then aggravated the violation on Facebook.
It is the first part of that holding that concerns me. There is at least some basis for viewing a confirmation to a child as a de minimus violation, though that is strongest with a minor child. (The daughter is described as their “college-age daughter”). I can understand the breach of informing 1500 people since a court could view a particular case as an effort to use surrogates to circumvent the agreement.
There is also a concern that the daughter did not reveal anything other than the fact that a settlement was reached. In fairness to the school, her mocking tone indicated that it was an ample financial settlement. For a defendant, that results in what they want to avoid — encouraging future lawsuits on the same basis. The posting was the type of “victory lap” that confidential agreements are intended to avoid.
Then there are those attorneys fees. I am not sure if this was a contingency case, but the firm presumably can proceed against the family for the full amount. If they had some contingency agreement, the family violated the terms of the settlement and though negligence led to the loss of the fee payment. If this was a straight fee arrangement, the family is now simply on the hook for the fees which would bring the loss to $140,000 (unless the firm cuts the family a discount). The only wrinkle would be if the family claims to have acted upon legal advice or their understanding from discussions with their lawyers. There is no indication of that in the record and the description by the family was that the decision was made in their car after the settlement to tell their daughter.
Snay is now the headmaster at Riviera Preparatory School in Coral Gables, Florida.
What do you think about this breach?
Question: When does confidentiality begin? At the time of signature? What if the father disclosed the proposed settlement terms before he actually signed (when they were still negotiating). Then the daughter disclosed the terms at some point afterward? Does the timing matter at all?
A college age young adult should have better sense. Whether she figured it out or was told by her parents, her response was uncalled for and had consequences. She should have been taught early that family business is NOT for publication and gloating is never attractive. I hope she has learned a lesson here. An educator for 50 years.
THANK YOU MIKE
Mike,
Thanks for the commentary. You’ve changed my opinion on confidentiality of settlement agreements. I had no problem with them before reading your opinion. Now I see where they can be to the detriment of the public in some cases.
Informing the daughter might have been reasonable, but also to tell her to keep mum as part of the agreement. Well, if they have deep pockets they could try suing some more.
Mike;
Concur – darkness/secrets never serve the light of truth – well.
AY;
As a smart girl would sneak away to “make out”;
so would a average intelligent being find a way to FB and Tweet.
Mike, Thanks very much for the thorough analysis.
LOL. Prof. Turley beat me to it. I heard about this case yesterday and downloaded the opinion to write a weekend comment. Since I won’t be doing that, I’ll note a few clarifications from my reading of the opinion:
1. Under Florida law settlement agreements are strictly construed. The court really had no choice in this instance because the agreement prohibited the parties from even disclosing the fact that a settlement had been made, and there is nothing ambiguous in the language. I have seen a lot of settlement agreements over the past 40 years, but this is the first one I have seen that prohibited disclosure of its very existence.
2. All the court file would reflect would be a stipulation for dismissal. The settlement agreement itself is a separate contract that does not become part of the record. Therefore someone reviewing the court file would learn only that the case had been dismissed.
3. The total settlement was $150,000.00, allocated $10,000.00 to back pay, $80,000.00 to non-employee compensation (1099 income) and $60,000.00 for plaintiff’s attorney’s fees. A violation of the confidentiality provision mandated forfeiture of the $80,000.00 payment only. Therefore, the back pay and attorney’s fees were still paid. An argument can be made, as has been suggested, that perhaps the agreed damages for breach was an unenforceable penalty. However, I don’t believe that argument would be successful in this case, even assuming it had been made, because as a general rule the damages resulting from breach of a confidentiality provision are not readily measurable or calculable. Therefore, the $80,000.00 forfeiture should constitute a freely negotiated and enforceable liquidated damages clause.
4. I believe that everyone loses in this case. A smart defendant would have quietly negotiated a reduction in the payment and allowed the dust to settle. The parents should have instructed the daughter to make no mention to anyone of the settlement, but they apparently failed to do so. It is not shocking that a child who believes that her father has been wronged and who has had to listen to negative comments from her peers (she was a student at the same school) would want her world to know that her father had been vindicated, and that was what she did-to 1200 of her closest friends. Gulliver Academy does not come out of this with an unsullied reputation. Now everyone knows that there was arguable merit to the claim of age discrimination, that the school was paying “hush money” to the victim and that the school was perfectly willing to punish the victim further solely as a consequence of the immature emotional reaction of a teenager intent on defending her father’s honor.
5. I am also a critic of confidential settlements, but not in matters involving largely private disputes, as in this case. But confidentiality clauses are routinely used to hide product defects, financial manipulation and other sorts of claims that can affect thousands, or even hundreds of thousands, of ordinary people. In those instances, permitting confidentiality is bad public policy.
It looks like the attorneys still get paid, since the settlement specifically refers to the Plaintiff’s portion. I’d prefer it was the entire settlement and then let the parents deal with their attorneys. I wonder if it would somehow have made a difference if the parents could prove they said nothing but the daughter figured it out? The sudden appearance of money and lots of suddenly smiling parents would suggest that something favorable happened. I hardly think they could keep the existence of the lawsuit secret from her. If the daughter figured it out on her own and then blabbed, how would that affect the settlement? (How the parents would prove they said or did nothing is a different question; let’s assume the school stipulated to it.)
The plaintiff’s attorneys screwed up ever agreeing to a confidentiality clause that broad and with disgorgement of the settlement proceeds as the remedy.
I would also have argued that disgorgement of the entire settlement is an unenforceable penalty.
Snay apparently admitted he told the daughter something. Usually the only thing in the public record concerning cases like this is a dismissal that only reflects that the parties agreed it would be dismissed. It would not have any information as to whether or not one party was receiving anything from the other.
Consideration of Snay’s daughter as a child seems to be a thumb on the scale.
I might add I wonder if there would have to prove the father told the daughter and if it might be a mitigating factor if the settlement was a published or public record.
@DS
That is an interesting take on the situation.
Those constrained by the non disclosure agreement claim they are in full compliance and the daughter must have deduced the truth and made unauthorized statements of her own volition.
I guess for 80 large, most anything is worth a try.
Talk about familial stress.