Legal Question in Civil Litigation in California

I wouldn't imagine that a settlement with a public entity CAN be "private," for obvious reasons. Often, such settlements would require approval by the municipal entity's governing body which, by necessity, must be in open session. Any attorney who wrote into the agreement that the settlement would be confidential probably overlooked that provision and the inherent difficulty in enforcing it.

Having served as a Senior Trial Deputy in the Office of the City Attorney for the City and County of San Francisco, I can confirm that Mr. Cohen is correct. State "sunshine" laws, require open meetings and allow freedom of information requests that require release of public entity settlements. Some cities, such as San Francisco, also have local ordinances that require even more openness and disclosure. I'm not sure what led you to believe the settlement was confidential, but if it was a term of the settlement it was void as against public policy. If the confidentiality was a material term of the settlement and was included in the settlement agreement, and the school district never mentioned that they could not keep it confidential, there may be grounds to rescind the settlement if you want, but that is only a "maybe" and only if you really want to start the lawsuit up again where it left off over this issue.

While Mr. Cohen's response makes sense, I do not think it is necessariyl accurate. Public entites are allowed to hold closed sessions to discuss personnel matters and litigation againist the entity [otherwise the trial strategy of their attorneys could be found out by other side]. When I worked for the City Atorney's Office in Oakland, to get City Council's approval of settlement we sent them confidental memoranda. I believe the fact of a settlement having occurred was public, but not the terms. See the below exercept.

August 2009

Confidentiality Clauses in Public Agency Settlement Agreements Are Not Against Public Policy

Many school districts and other public agencies question whether they should make a settlement agreement "confidential" in spite of laws that require transparency in public government and the availability of documents through the California Public Records Act. In striking a balance between the notions of privacy and open government, a California Court of Appeal held that a confidentiality clause in a settlement agreement between a public employee and the public entity was permissible, though a public entity may not be able to completely conceal the terms of the agreement.

In Sanchez v. County of San Bernardino (2009) __ Cal. Rptr. 3d __ (2009 WL 2414926), plaintiff Elizabeth Sanchez, while she was a County employee, negotiated a labor contract with the sheriff's union. A few months after the negotiations, she became romantically involved with the union president. When her supervisor discovered the relationship, she was asked to resign. The County and plaintiff entered into a settlement agreement which severed her employment and contained the following confidentiality provision:

To the maximum extent permitted by law, the parties further agree that this Agreement, the terms and conditions of this Agreement, the facts, events and issues which gave rise to this Agreement, and any and all actions by Ms. Sanchez and the County in accordance therewith, are strictly confidential and shall not be disclosed or discussed with any other persons, entities or organizations, whether within or without the County, except as may be required by applicable law.

Soon after, several County employees, including the plaintiff�s supervisor, were quoted in newspaper articles stating that the plaintiff had resigned due to a conflict of interest arising out of an improper relationship with the union president. The plaintiff filed a lawsuit alleging several causes of action, including a breach of the confidentiality provision of the settlement agreement. The County claimed that it had a duty to disclose the misconduct and the confidentiality provision was void as against the public policy in favor of open government.

The Court determined that the confidentiality clause did not violate public policy because it expressly carved out any disclosures "permitted by law." The County also defended its disclosure to the media by arguing that it was protected under the First Amendment. However, the Court explained that the County waived its free speech rights by agreeing to the confidentiality provision. The County then argued that the law required disclosure under the California Public Records Act (Gov. Code � 6250 et seq.) including, arguably, disclosure of the agreement itself. However, no request had ever been made. Unless and until such a proper request had been made, the Court explained, the County would be required to honor the terms of the agreement and any disclosure would constitute an actionable breach of contract.

Finally, the County tried to point to the former employee's own disclosure of the facts and the settlement agreement to her family and friends as a defense. However, the Court stated that once the County had breached the agreement, a jury could reasonably conclude that the plaintiff�s further obligation under the confidentiality provision contract was excused.

Public employers who include confidentiality clauses in their contracts should ensure that the language expressly anticipates disclosures that may be required by law. Further, individuals entering into the agreements should be directed to abide by the terms and refrain from making statements to the press or even to friends and family, as such disclosures may expose them to a valid breach of contract claim.

If you have questions regarding the impact of this case, please contact any one of our four offices; (Fagen law office.).

Not knowing what the leaked information was and how it occurred, I can not fully respond to your question.