I often find myself frustrated when non-legally trained TV reporters use inappropriate terminology to describe legal issues. They will often report that “opening arguments start today” in some big trial. As attorneys, we all know that opening statements are not supposed to be “arguments”. Likewise, we frequently see reports of a plaintiff who “won a settlement” against a defendant. Settlements, of course, are not “won”, but are negotiated and agreed upon. In fact, in many cases, the defendant may feel that he or she actually “won” if the settlement achieved is particularly advantageous to them.
Perhaps one of the most important reasons for settling a claim for the majority of defendants is the ability to resolve a case quietly, without publicity. That is why almost all settlement agreements and releases contain a “confidentiality” clause, which prevents the settling plaintiff (if not both parties) from discussing, publicizing or otherwise disclosing the terms of the settlement.
Some plaintiffs who believe they have achieved a good settlement may actually feel the settlement is some vindication of their position, and that they had, therefore, “won”. As such, they apparently don’t think twice about the confidentiality language in the release or agreement. That problem was illustrated by two cases recently in the news. In February, Mel Gibson’s “ex”, Oksana Grigorieva, apparently was sanctioned with the loss of half of the $750,000 settlement that she reached with Gibson following her suit against him over their break-up. Despite a confidentiality agreement in the settlement that barred her from discussing Gibson, she could not help appearing on Howard Stern’s radio show and taking pot-shots at her “ex”. The court apparently found that conduct in violation of the confidentiality agreement and ruled that she had forfeited the remaining payments due her on the settlement, which amounted to almost half the total figure.
More interesting was the report of an $80,000 settlement lost to a man who had reached a settlement at that figure after suing his former employer for age discrimination. His teenage daughter posted about the settlement on Facebook, noting that her father “won his case” and that the ex-employer was “now officially paying for my vacation to Europe this summer” (adding a final dig at the former employer with the words “SUCK IT” at the end of her post). The Florida Court of Appeals agreed with the employer that the plaintiff had clearly violated the confidentiality agreement and refused to force the employer to pay the plaintiff the $80,000 settlement figure.
Settlement agreements and releases entered into upon settlement of a suit or claim are contracts. Like all contracts, each side has obligations. It may be hard for an injured party who achieves a reasonable settlement to keep quiet about it, but they simply have to be carefully instructed on the consequences. Defendants settle to “buy their peace”, and that peace almost always includes the prevention of publicity, disclosure and information about the suit or claim and the ultimate settlement. These examples should prove very instructive to counsel who represent clients negotiating settlements of any type.