Many people may have caught this story from Yahoo headlines, Google News, or even on Twitter. Every attorney and litigant should learn from the mistakes of Patrick Snay.
Patrick Snay brought discrimination and retaliation claims against Gulliver Schools where he served as headmaster until his contract was not renewed. Gulliver Schools and Snay reached a confidential settlement agreement. Pursuant to this agreement, $10,000 went to Snay as back pay, $80,000 went to Snay via 1099 (probably compensatory damages), and $60,000 went to Snay’s attorneys. The confidentiality provision stated that Snay would not disclose the terms of the settlement to anyone besides his wife, attorneys or other professional advisers. This common language in the settlement agreement became a major stumbling block for Snay. Snay has a college-age daughter who also previously attended Gulliver. Snay and his wife shared with their daughter that the case was settled and they were happy with the result. One would think this is harmless. Of course, Snay would tell his wife and his daughter is part of the family. The daughter who apparently is quite popular with 1200 friends shared her parents’ good fortune on Facebook by typing:
Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.
It only took Gulliver four days to contact Snay and tell him that he was in breach of the agreement.
Gulliver paid Snay’s attorneys the $60,000 mentioned above. With respect to the $80,000, Gulliver argued that Snay was in breach and withheld the funds. Snay sought to enforce the settlement and he prevailed before the trial court. The trial judge ruled that neither Snay’s comments to his daughter nor his daughter’s Facebook comments constituted a breach of the confidentiality agreement. Gulliver could have left things alone, written a check and let the Snay family go on vacation. Instead, Gulliver appealed.
The appellate court ruled in Gulliver’s favor reversing the decision of the trial court. The appellate court noted that absent evidence that the parties intended any special meaning to the terms of the contract, the unambiguous language is to be given a realistic interpretation based on the plain, everyday meaning conveyed by the words. The court then noted that neither Snay nor his wife could disclose to anyone, except their lawyers or other professionals, the terms of the agreement. The court ruled that Snay’s conversation with his daughter stating that “it was settled and we are happy with the results” established a breach of the confidentiality provision. The court added that Snay violated the agreement by doing exactly what he had promised not to do.
Thus, another example of loose lips sinking ships. This decision should serve as a warning that attorneys must advise their clients to honor the terms of a confidentiality agreement. In an ordinary sense, certainly the idea of discussing the matter with other family members would seem harmless. This case shows that simple words such as “we settled” and “we are happy” are sufficient to lead to a breach of the agreement. This teachers that close attention needs to be paid to familiar provisions of the settlement agreement. Even the simple statement, “we are happy” could lead to the forfeiture of thousands of dollars. Victory laps following the signing of a settlement agreement are never a good idea.