You’ve seen the high profile cases being discussed on the news: CNN, ESPN or your favorite entertainment channel. We get caught up in the “what’s happening now” factor, and each day there is more news on the case; Then all of a sudden…nothing. The media makes a brief comment that the case settled, and nothing more is discussed. Why?
Whether it is a business litigation case, employment case, divorce case or real estate case, when a settlement finally occurs (often on the courthouse steps or even DURING trial), the attorneys will often prepare a confidentiality agreement, also known as a nondisclosure agreement or “gag” order if incorporated into a court order. One side may have agreed to pay more just to get the other side to be prevented in the future from publically discussing some sordid events that are better left out of the media. Within the agreement there will be a consequence if a litigant violates the terms of the agreement and discusses the case that settled.
This is where human nature comes into play. Litigants love to talk. They love to talk before, during and AFTER the case. Maybe they talk after, thus violating the agreement, because they want to “prove” to the world that they really were successful and that the agreement proves it. Maybe they want to talk because they still want to be in the limelight (remember, the media gets quickly tired of a case that has settled).
Sometimes these agreements will contain a significant financial consequence to protect one party from information that could be leaked. Some fairly recent cases discuss the same issues; one, a celebrity case and the other an employment case. Both of which hit the news again when the agreement was violated. Mel Gibson’s wife was to receive a cash settlement provided she did not talk about Mel Gibson. But, she went on Howard Stern’s radio program and discussed her life experience as “painful and dark.” Those comments cost her a bit of money, as the judge ordered that Mr. Gibson did not have to pay the final amount still due at that time, in the settlement.
Remember the headmaster of a fancy prep school in Miami? He sued when his contract was not renewed. The case settled and the school was required to pay a settlement with a confidentiality agreement. The former headmaster told his daughter, probably thinking that his young daughter certainly would keep a confidence. Had he never heard of Facebook? Of course, the daughter went on Facebook, and shared information, with a comment to the school which this writer will not repeat. The school cancelled the settlement payment, and the Appellate court affirmed the nullification of the settlement…and included reference to the child’s Facebook post.
Confidentiality Agreements can be violated in the strangest way. They can be violated in elevators when an individual is discussing with a friend what “really” happened. They can be violated at the restaurant, when the individual has had a cocktail and is now immersed in a great story (that the waiter, busboy and table next door hear). Lawyers write them to protect an individual, and lawyers also know that they are only as good as human nature will allow. Some corporations will often refuse to sign a general confidentiality agreement out of fear of controlling tongues of their many employees.
Settling a case is generally the best way to resolve a matter. Many times a good Confidentiality/Non Disclosure Agreement will help encourage otherwise reluctant parties to settle.