Settlement Agreement Confidentiality Clauses

The confidentiality clauses contained in the transaction agreements present unique risks for lawyers and their clients. If an agreement contains a strict confidentiality clause, there may be almost infinite obligations for the parties and their lawyers. Taking into account the following considerations, lawyers can work to meet clients` expectations while respecting their ethical obligations in accordance with the rules of professional conduct. With regard to employers in particular, the Court confirmed that confidentiality clauses could be strictly enforced in transaction agreements. Mr. Wong argued that the refund provision contained in the agreement constituted a «non-compliance clause» and that the union misrepresented the arbitrator`s provision as a «punitive clause,» leading to a fundamentally erroneous analysis and conclusion. Although the Committee did not reject the narrow confidentiality of the terms of the transaction, it concluded in the opinion that any provision that might apply to public information would limit the lawyer`s right to practice by requiring counsel to avoid representation of future clients in cases where counsel may have the opportunity to use information that was not protected as evidence of confidence, but which nevertheless falls within the terms of comparison. The commission concluded: «A proposed transaction that asks the lawyer to accept the secrecy of information that normally cannot be protected by the other party for the property of the opposing party creates a conflict between the interests of the client in question and those of the lawyer and future clients.» See also the formal opinion of Colorado 92 (June 19, 1993) (review of the adequacy of a rule provision 5.6 (b) is whether it would limit the exercise of independent judgment on behalf of other clients to a greater extent than that of an independent lawyer who is not subject to such a restriction; a provision prohibiting a lawyer from subjecting certain recordings or facts to future acts. Confidentiality clauses for billing agreements are standard. However, if the scope of the clause is too broad, such clauses cannot be applicable because of the illegality. For example, if the effect of the confidentiality clause prevents the worker from unmasking false acts/criminals by prohibiting him from speaking out, these clauses are not only illegal and unenforceable, but have often been referred to as «gagged clauses». To apply the test to Wong`s circumstances, there was no evidence of unequal bargaining power. She was represented by a lawyer throughout her appeals and transaction proceedings, and the transaction contract was the subject of significant back-and-forth negotiations.

Nor is there evidence of a high degree of injustice inherent in the repayment provision. Confidentiality was the only thing The Globe and Mail wanted in the transaction agreement, and the repayment of the lump sum was the mechanism to enforce the requirement. The Court found that this was a perfectly reasonable enforcement mechanism, because if Wong did not meet their primary obligation under the agreement, The Globe and Le Mail would be exempt from their primary duty. Because proof of damages for breach of confidentiality tends to be difficult, transaction agreements may include remedial measures such as cash damages, claims of omission, costs and/or legal fees. The headlines are a little misleading about the widespread use of confidentiality clauses. Concern for their use focuses on allegations of moral harassment and sexual harassment in the workplace. Confidentiality clauses in transaction agreements may have a number of restrictions.