CSG Law Alert: Confidentiality Provision In Settlement Agreements May Pertain to the Lawyers and Not Just the Clients

A California Court ruled that depending on the terms and language of a Settlement Agreement – and whether the attorney signs it for any reason (where the attorney signed as approving to form and content) – an attorney may be bound to the confidentiality provisions contained therein. In Monster Energy Co. v. Schechter, et al., California Sp. Ct., Case No. S251392, aff’d Fourth Appellate District, Division Two (E066267), the State Court held that the attorney’s public statement that the settlement resulted in “substantial dollars” for Plaintiff could be a breach of the Settlement Agreement.  In particular, the Court cited language in the agreement that counsel, and not only the parties, were bound by confidentiality provisions.  The Court ruled that the lawyer’s position that the boilerplate language “agreed as to form and content” was not intended to bind him to contract terms would ultimately have to be decided by the trier of fact, and denied the attorney’s motion to dismiss.

Attorneys should be careful to review Settlement Agreements to determine if they, in addition to their clients, are agreeing to any obligations.