Beware the Facebook Settlement Disclosure

We continue to toe the line between privacy rights and social media activity. Typically, though, it’s the employee looking to protect the privacy principle. Not this time.

In the context of settlement agreements in employment lawsuits, employers generally have the greater interest in restricting public discussion and disclosure for fear that others will learn about significant monetary payments made by the company to end a lawsuit. For that reason, settlement agreements tend to contain non-disclosure/non-publicity provisions that preclude the settling employee/plaintiff from disclosing certain aspects of the settlement.

In Grullon v. Liberato, the parties settled a wage and hour lawsuit for a sizeable amount and that agreement included non-publicity provisions. Nevertheless, according to court documents filed by the defendants, an immigrant labor group involved in the case made

“a series of public postings on Facebook announcing that ‘after leading a two-year fight against wage theft, sexual harassment, and unsafe working conditions, Liberato Restaurant workers ha[d] officially won. . . . On Monday they received their first settlement checks.’”

Yet, according to court documents filed by the plaintiffs, the relevant provision in the settlement agreement made clear that the settlement agreement “is a public document” and that the only thing that could not be publicized was “the settlement sums paid by defendants in connection with this settlement[.]”

The federal judge agreed with plaintiffs and ruled as follows:

“The non-publicity and non-disparagement clauses of the Settlement Agreement do not preclude plaintiffs from discussing the nature of their claims, the litigation, or the settlement (but not the settlement amount), and plaintiffs’ conduct does not violate those provisions.”

Because the agreement only prohibited disclosure of the settlement amount itself, there was no violation from the disclosure of everything else.

Employer Take Away:   What should you as an employer take away from this development? 

There is a trend today, particularly in wage and hour lawsuits, to give greater access to information about public lawsuits and to restrict the ability of parties to shield such public access through onerous confidentiality provisions. This Liberato decision offers two takeaways:

1.         Where not otherwise barred by law (or a particular judge), make sure that the non-disclosure/non-publicity provisions in your settlement agreement is clear and specific about all of the subjects that you want to protect from disclosure.

2.         Make sure that your settlement agreements are similarly clear that disclosure through social media is as prohibited as if the disclosure were made through some other means.

About The Author

Michael C. Schmidt is the vice chair of the firm’s Labor & Employment Department, and the office managing partner, vice chair, of the New York Midtown office, where he is resident. For more than two decades, Mike has concentrated his practice on representing companies and management in all facets of employment law, such as: (i) defense in litigation involving wage and hour (overtime and unpaid compensation), discrimination, harassment, retaliation and whistle-blowing, non-competes and trade secrets, and disability and other leave-related issues; (ii) day-to-day counseling and in-house training on issues from hiring to firing, and other questions unique to his client’s industries and business; and (iii) drafting and reviewing employment agreements, termination and severance agreements, confidentiality and non-competes, and employment policies and manuals.

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About Social Media Employment Law Blog
Social Media Employment Law Blog is devoted to the interplay between social media and employment law, an extremely topical and significant area of law for employers in this new technology era. Published and edited by Michael Schmidt, Vice Chair of the Labor & Employment Department, Mike concentrates in representing management in all facets of employment law and has been frequently quoted on employment law topics, and is regularly interviewed by trade publications and national journals for his opinions on legal trends.
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