Virtually all severance agreements contain confidentiality clauses that prohibit the employee from disclosing the terms of the agreement – and sometimes even its existence – beyond a limited list of people.   A recent case shows the hazards for employees who breach these clauses – particularly using social media.

A Florida man brought an age discrimination lawsuit against the private school where he had served as Headmaster.  He settled his case with an agreement that included a confidentiality provision preventing him from sharing the settlement’s terms with anyone other than his wife and professional advisors.

The former Headmaster told his daughter about the settlement.  She was a student at the school and promptly posted on Facebook that, “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 claimed breach of the settlement agreement’s confidentiality provision and refused to pay the settlement amount. An appeals court upheld the refusal.  As a result, the plaintiff lost out on his $80,000 settlement.

Although this story comes from the settlement of a lawsuit, the same confidentiality issue arises in many severance agreements.  This case shows how critical it is for employees signing severance agreements to abide by confidentiality clauses.  It also shows that proper confidentiality clauses reflect the practical need to tell close family members and perhaps others.  When important family members or others are included within the permitted recipients of information, it is essential to clearly explain what “confidential” means, and that “confidential” is not consistent with posting on Facebook, tweeting, or disclosing in other social media, as we have blogged about before here and here

Employees and former employees who receive severance agreements should review them carefully and take care to abide by the terms if they sign them.  If there is doubt about what an agreement means, or a desire to negotiate different terms, then employment counsel should be consulted promptly.