The Importance of Confidentiality Agreements

The progression of a personal injury lawsuit tends to unfold in a certain manner.  First, the client recovers from his or her injuries. After the recovery period, the lawyer in charge of the case will begin putting together the client’s case portfolio by compiling all documents relevant to the case. Once these preparations are complete, the lawyers from both sides will commence the negotiation process. Most lawsuits are resolved through this negotiation process when the parties reach a settlement agreement that is amenable to both. In fact, the grand majority of lawsuits never go to trial.

A settlement agreement is essentially a contract between the two parties involved in the lawsuit. As such, the parties are free to negotiate for, and enforce, a variety of contractual provisions. In a situation where one or both parties acts inconsistently with one or more of the contractual provisions, a court might declare the contract null and void. One common contractual provision in settlement agreements is a statement whereby both parties agree to not discuss the settlement terms with any other party. This is often called a non-disclosure agreement or a confidentiality agreement.

As one young lady from Florida discovered, courts are often very strict in their interpretation of confidentiality agreements[1]. Her father had been embroiled in an age discrimination suit with the school where he had formerly served as headmaster. The case might have gone to trial, but the school and Mr. Snay settled for $80,000. The settlement agreement included a standard non-disclosure provision, and so both parties agreed that neither would disclose the details contained therein. Mr. Snay, however, chose to discuss the settlement with his daughter, a choice that ended up costing him the $80,000 he had recently won.

Mr. Snay’s daughter, after learning of the settlement, updated the status on her public Facebook page to inform her roughly 1,200 friends (and anyone else with access to her page) about the settlement agreement. When the school and its lawyer got wind of the status update, they took Mr. Snay back to court where a judge threw out the $80,000 settlement. And, though Mr. Snay is allowed to file for a rehearing or appeal to the Florida Supreme Court, the odds that he will get his money back are very low[2].

There’s a lesson to be learned from all this – if you have signed a settlement agreement that includes a confidentiality clause, never post anything about the case on the internet. In fact, you should avoid disclosing the details of the case to anyone who wasn’t a party to the settlement agreement. This way, you don’t run the risk of losing the money you deserve.

If you or a family member has suffered a personal injury, the experienced attorneys at Allen, Allen, Allen & Allen can help. Call us at 866-388-1307 for a free consultation. We have offices across Virginia in Richmond, Charlottesville, Petersburg and Fredericksburg.

About the Author: Jamie Kessel is a personal injury attorney with the law firm of Allen & Allen and primarily works out of their Richmond and Short Pump offices. He has dedicated his career to fighting for the rights of Virginians who have been seriously injured or killed due to the negligence of others.


[2] Id.