Settlement Agreements Confidentiality Clauses



-December 16, 2020-

Settlement Agreements Confidentiality Clauses

Mike Burroughs

Transaction agreements "do what they say on the box" - they settle charges and claims without a winner or loser, as established by a court. The inclusion of a confidentiality provision in a transaction is generally considered a client`s decision with the advice of a lawyer. Confidentiality can be a bargain like any other in negotiations. The secrecy in comparisons also harms lawyers. A lawyer cannot assess a case fairly and appropriately if counsel cannot compare it to other known cases. It is particularly damaging to inexperienced lawyers who are most likely to underestimate a case. Secrecy allows the offender to assess fair value while preventing the innocent victim from doing the same. To the extent that the confidentiality clause is limited to these elements, it is normally entirely acceptable, since these clauses are beneficial to both parties and do not have a major negative impact on persons outside both parties. However, problems arise when the employer attempts to extend the cycle too widely to the point where it wants to prevent the worker from expressing legitimate concerns in the public interest, making the confidentiality clause null and void. It would be invalidated and unenforceable as soon as it considered a disability and a violation of workers` right to a protected disclosure (i.e. whistleblowing) under the Public Disclosure Act (PIDA) of 1998 (as amended by the Enterprise Reform and Regulation Act 2013). Under this act, a worker can make a protected advertisement against his employer as long as he is satisfied that disclosure is in the public interest. By keeping the details of the colony secret, the goal is often to avoid further damage to its reputation by minimizing any bad publicity that comes with a "bad" result.

The defendant`s fundamental fear is that if the public learns that Defendant X Plaintiff Y paid a sum of money to settle a case in court (as a result of defendant X`s unfair and deceptive business practices (or fraud or breach of contract or a series of other civil actions), the public may conclude that Defendant X did commit a fault and that the amount of the payment to Y is directly correlated to the seriousness Accused X.


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