Failure to Protect Confidentiality Can Prove Costly

You may have seen the article making the rounds last week about the Facebook® post that cost a Florida man $80,000. For those unfamiliar with the story – or for those who didn't make it past the headline – a Florida appeals court found that a school headmaster violated the terms of a confidential age discrimination settlement after his daughter mentioned the settlement on Facebook®. As a result of the disclosure, the headmaster forfeited the $80,000 settlement payment.

While many may have had a chuckle at the man's expense, and others have worried about what disclosures their own children may have made online, it is important to remember that your organization likely has similar confidentiality obligations and that an inadvertent disclosure could result in legal and financial liability. For example, if the headmaster's employer was also bound by the confidentiality clause and an employee disclosed the settlement terms on his or her Facebook® page, the headmaster may have been allowed to keep both the settlement payment and his right to bring a claim. If your organization has confidential agreements with clients or vendors, an inadvertent disclosure could be a breach of the contract, leading to damages. Likewise, the disclosure of information revealed in an investigation, or other sensitive employee information, could jeopardize the investigation or even result in a violation of state or federal law.

As this case highlights, inadvertent disclosures, whether online or in some other forum, can prove costly. As a result, companies should take proactive steps to prevent such disclosures. For instance, companies should put physical and electronic safeguards in place to protect sensitive information, only disclose sensitive information to employees with a need to know, and if such information is disclosed, ensure that employees understand their obligations to keep confidential information confidential. In addition to periodic training on safeguards to prevent disclosures (e.g., unsecured wifi at coffee houses should not be used for confidential emails), companies may consider instituting or revising their confidentiality policies and agreements to provide further protection.

If you have not recently reviewed your policies or agreements or if you have none in place, now is the time to take action, especially given our previously announced offer to provide a complimentary review of your company's confidential information policies and practices.

Please respond to this email or contact your Elarbee Thompson attorney if you have any questions about this decision or need help drafting or reviewing your policies or agreements.