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When settlement requires confidentiality, tell everyone to keep lips sealed

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in HR Management,Human Resources

Settling a case early on can have advantages. One of these is that you can include a confidentiality clause that bars a former employee from talking about the case. Now a Cali­­fornia court has said that such clauses are valid, meaning you can sue a former employee who breaks a confidentiality agreement.

Recent case: David and other Molina Healthcare em­­ployees settled a claim that challenged their termination during a reduction in force. Each accepted cash and promised to keep their claims confidential, specifically agreeing that in “the event you are asked about your dispute with Molina, you will respond only by saying ‘The matter has been resolved.’”

Somehow, the media got wind that Molina was alleged to have laid off U.S. citizens and imported foreign workers to replace them. Other related lawsuits followed.

Molina sued David and his colleagues after a news article stated that the group had settled their cases through mediation. Molina told the court that the information could not have come from the company since it kept the details strictly confidential, as it and the employees had agreed.

The court said Molina’s case could go forward; it can try to show that the information must have come from someone in the group. (Molina Health­­care v. Beasley, et al., B239208, Court of Appeal of California, 2nd Appellate District, 2013)

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