A woman who lost her job during a company restructure has been ordered to pay her former employer $1,000 for breaching the confidentiality provision contained in a mediated settlement agreement.

Ms Priest and Auckland City Couriers entered into a mediated settlement agreement which included a standard confidentiality provision:

The parties will keep confidential these terms of settlement, all matters discussed in mediation, and the background circumstances which led to the parties entering into this agreement.

The day after the record of settlement was signed, Ms Priest spoke with a co-worker of Auckland City Couriers about a tent she was having delivered. In that conversation, Ms Priest inadvertently referred to her mediation and made some comments about it.

Auckland City Couriers wanted the mediation kept quiet as it was in the midst of a restructure. The company didn't want employees to know about mediation with one of the affected employees and, by implication that the company had settled with her.

Auckland City Couriers was able to establish that one of the principal reasons it felt able to settle with Ms Priest was because of the benefit of confidentiality. That benefit had been lost by the actions of Ms Priest and there was a sense of irreparable damage.

The Employment Relations Authority held it is important that employees in such situations understand that the confidentiality sought by an employer is not an "arid or vacant construct." This is so even where a breach is inadvertent and innocently made.

The Authority considered that there must be some response to a breach, otherwise confidentiality undertakings in a mediated settlement agreement would be a meaningless gesture. Accordingly the Authority directed Ms Priest to pay Auckland City Couriers $1,000 as a penalty for the breach of the mediated settlement agreement.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.