Can a Breach of Confidentiality Be Undone? [e167]

March 23, 2015

The guys kick off the week by discussing what can be done when there is a breach of confidentiality and whether there are any solutions to remedy the breach.

Get help with a confidentiality agreement by contacting our firm today.

Full Podcast Transcript

NASIR: All right. Welcome to our podcast where we cover business in the news and add our legal twist. And, of course, you can always visit us on our website at – you do know about that, right?

MATT: I wouldn’t be surprised if that was an actual thing.

NASIR: It is! By the way, my name is Nasir Pasha.

MATT: And I’m Matt Staub.

NASIR: No, yeah. So, that is our official announcement – FYI, Matt – has finally launched after, I think it’s been about six and a half, seven minutes of development. We’re finally up and going so check it out.

MATT: After we talked about those – what do they call them?

NASIR: Top level domains.

MATT: Yeah, I haven’t heard about those at all.

NASIR: Well, the reason is because it took, like, almost a year to actually implement it. So, they actually have a staggered schedule. In fact, let me see here. So, yeah, we have dot-green coming out on March 24th which you would think would come out earlier for Saint Patrick’s Day; April 1st is dot-tires; April 2nd is dot-flowers; April 8th – my birthday, everyone make a note of that – dot-wedding; 15th, it should be, like, dot-taxes or something, no, it’s garden, fashion; and then, 21st is poker. A lot of cool stuff coming up.

MATT: It’s so weird. I don’t really get it.

NASIR: No, but check out, that’s probably the best site out there right now

MATT: What do we have on there? Strictly legal stories?

NASIR: It’s kind of hard to explain. It’s pretty complex so you just have to check it out on your own.

MATT: You link to the best pizza in every state article that you just told me about.

NASIR: Well, no one knows that we started late today, but the reason we started late is because we started going through the Business Insider article for the “best pizza in every state” which the very premise seemed ridiculous to us, but we found some pretty bad pizzas in there.

MATT: Yeah, some interesting stuff, for sure. I feel like this article comes out all the time so I don’t know how they decide on this. Some of these don’t even make sense. I just don’t get it. Well, the Oregon one has just got shells all over it. Did you see that one?

NASIR: Yeah, I don’t even think that’s a pizza. They’re like, “Oh, well, we can’t really find a good pizza place. Let’s just put this blob of goop on here.”

MATT: Yeah, there’s so much – and we’ll get into, I guess, the episode here in a second – but there’s so many very different pizzas. I feel like that’s what it takes to win this thing. But, most likely, the best one is probably just the more standard topping.

NASIR: Exactly.

MATT: So, what do we have? Something much less fun to talk about probably. Oh, confidentiality.

NASIR: Nice, with pizza?

MATT: Yeah. So, like, the secret ingredients for the recipes for the crust or the sauce or anything. It could be confidential.

NASIR: Whatever you prefer – sauce or crust.

MATT: Yeah. Not to make any judgments but I guess this is part of a lawsuit. I mean, we’re going to talk about confidentiality in general but this is part of a lawsuit and I guess what happened was there was a document that was filed with the court and I don’t know if it was unredacted or just poorly redacted.

NASIR: I think “incorrectly redacted” was the term.

MATT: Basically which had confidential information on it and, you know, once that gets lodged with the court, that’s public record and anyone can go and look that stuff up. So, at that point, the things that were supposed to remain confidential were supposed to be redacted are out in the open and they’re not confidential anymore. So, obviously, the side that, you know, was going to be harmed by this – by the confidential information getting out – tried to prevent this from happening and the court actually denied their motion.

NASIR: What’s interesting about all this is that I actually dealt with this exact issue probably four years ago. It was one of those instances where you have, you know, some business partners that split up. One starts their own business, et cetera. I was representing the business owner that split off from the current business and they reacted pretty aggressively with trying to get a restraining order because my client, they alleged that my client had disclosed some confidential information, and they were particularly specifying this business plan or a few pages in this business plan. In order to demonstrate what that confidential information was, instead of just describing what it was exactly, they actually filed it with the court and, of course, we make the argument that, “Hey! You know, if it’s so confidential, why are you putting it in a public record?” And, by the way, there’s ways to present evidence to the court and not have it released to the public, and that happens all the time – a very standard procedure – and so, quite a big mistake. We actually didn’t have to get up getting into that far, getting into that specific legal issue, but this kind of stuff happens all the time, actually.

MATT: Yeah, and that sounds like it might have been intentional. I guess this one could have been, too. But I guess both parties were, it sounds like it was more of just negligence and both parties went in on this motion or they agreed and said this information could be corrected. Basically, what the court said was, “Look, this has been out on the public record for five days now. It’s released to the public and now the information that is supposed to be confidential no longer is. Too bad, so sad.”

NASIR: And, you know, the FTC almost did the same thing. So, the Wall Street Journal made a Freedom of Information Act for some of the… all the, basically, the documents that related to – I don’t know if you remember back in 2012, FTC was investigating Google for anti-trust, anti-competitive practices, et cetera and so the Wall Street Journal made those requests. FTC releases all this information that was completely unredacted. It was supposed be, parts of it were supposed to be redacted. And, of course, once it’s out there, there’s not much you can do. Here are instances in which it wasn’t purposeful. And, like you said, even in my case, I think it was intentional to submit that information, but it wasn’t intentional to waive the confidentiality aspect of the actual documents. And so, this brings to the issue of how do you keep things confidential, right?

MATT: Yeah, and I guess that’s the tough thing here, you know. I think we’ve talked about this before. You have people – whether it be employees, whether it be third parties, what-have-you – sign these confidentiality agreements which, you know, it’s something you should do. But what if they intentionally or even negligently let this information go public? I guess you could go after them for breach of confidentiality but…

NASIR: It’s already out there, right?

MATT: Yeah, the damage is already done. So, I don’t know. I guess that’s another thing I think we’ve talked about too – it’s pick and choose who gets this information. In this case, you know, this was a lawsuit and I believe with two companies so you would think two businesses would be able to get this right or the one business that I guess screwed up and didn’t redact the information correctly.

NASIR: Well, one thing you’ll notice is that, like, for example, those non-disclosure agreements that it seems like everyone has signed in their past or at least had some other people sign, a standard clause in there is that, basically, they define confidential information that so long as it’s not public information. How can it be confidential information if it’s public, right? Obviously.

MATT: Right.

NASIR: But, also, it includes in there that, if it becomes publicly available through no fault or failure to act by the receiving party then that is also not included in the confidential information.

MATT: Right.

NASIR: And so, obviously, if the receiving party is the one that makes it public, then, again, just demonstrating that this is a pretty key element in order to keep things confidential, to have some kind of recourse.

MATT: Yeah, I guess I don’t know, we don’t know what’s going to happen with this case. They kind of paint the picture as like, “Well, it’s a cautionary tale for people that are going to be submitting information for a lawsuit and don’t properly redact it.” But, for the company that suffered in this, they’re really just out of lucky, you know? I don’t know. They can probably go after the other side for some sort of breach and maybe get some sort of financial compensation for it. But the main thing is that what they wanted to keep confidential isn’t a secret anymore so that’s not a really good consolation prize.

NASIR: And it may be a lawyer’s liability, too. Malpractice is still a difficult thing to prove. You do have to prove some sort of negligence here and the question is, “Who provided the document to submit?” and, “Who was in the best place to determine whether or not it was properly redacted, et cetera? What kind of processes were there?” Like you said, even if you have recourse against the lawyer, does that solve your problem? Not really, because, again, the information is already out.

MATT: Right. Yeah, I’m reading this order for when they got denied here. I mean, it’s pretty straightforward. You know, they cite these cases and they pull these quotes. Once the party’s confidential information is made publicly available, it cannot be made a secret again.

NASIR: Yeah, that’s pretty straightforward. You’re right.

MATT: Secrecy is a one-way street. Once information is published, it cannot be made secret again. Oh, this one, you’ll love this one. Once the cat is out of the bag, the ballgame is over.

NASIR: Is that really in there?

MATT: Well, it doesn’t even make sense. Once the cat is out of the bag, the ballgame is over? I think they tried to combine, it actually sounds like something you would say exactly. It’s like, “I’ll have a cat reference,” and then incorrectly link it to a sports analogy.

NASIR: What’s funny is that actually seems to be some quote from another case so it’s not the first person.

MATT: It is, yeah. The citation is omitted, unfortunately.

NASIR: They didn’t find it relevant to cite it, apparently. But, yeah, that’s funny.

MATT: Yeah, and this was actually against Google. I guess I probably should have mentioned that at the onset.

NASIR: Another unfortunate thing for Google. Well, actually, I think it was Skyhook Wireless is the plaintiff’s information.

MATT: Skyhook filed the unredacted versions of two documents.

NASIR: Yeah, there you go. This was only available to the public, so to speak, for approximately five days and the reality is that, because this is a high-profile case, and I say that only because Google’s involved, it’s very unlikely that anyone else besides anyone that’s involved in the lawsuit would download those documents anyway. But because it’s available on PACER which is basically the federal court system online records portal and because it’s Google, it is likely that a lot of people actually have access to these documents right now if you want.

MATT: Yeah, we should have logged into PACER and pulled up the information because we could always edit that and make it seem like we did. But the cat’s out of the bag and the ballgame is over so we can’t go back.

NASIR: I’m pretty sure I said the cat’s out of the bag last week. I said that phrase last week some time.

MATT: Yeah, it’s a common phrase. Not linked with the ballgame is over.

NASIR: I don’t see that connection.

MATT: Now that I think about it, I have been to mini-games where, once the game is over, they just bring a bag out and a cat runs out of it so I guess it makes sense.

NASIR: That’s my favorite part of the game.

MATT: Ah, well. Speaking of games, I had a stat for you, and this is after one day of the tournament, 11.57 million brackets on ESPN, there’s only 273 perfect ones remaining after the first day. Last year, there was 18,471 after the first day. So, your chances of those multiple perfect brackets are very slim right now after 16 games.

NASIR: Yeah, exactly. There’s still 60 games left. That’s not that many. And that’s just ESPN. We’re not even talking about the world. There’s a bigger market, you know, bigger players involved.

MATT: Yeah, I think I saw another site had – either Yahoo! or CBS Sports – had something like 4,000. It’ll be done by the weekend like it always is. Sometimes, there’s one or two that have that after the weekend but there was way too may upsets yesterday for someone to get this right.

NASIR: All right. Well, we’ll see. I’m going to win this billion dollar bet one year.

MATT: It already doesn’t exist.

NASIR: Yeah but, between you and I, I think I’m already one billion down this year. I’m trying to make my money back.

MATT: Double or nothing.

NASIR: Yeah, basically, double or nothing.

MATT: Yeah.

NASIR: All right. Well, thanks for joining us everyone.

MATT: Yep, keep it sound and keep it smart.


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Legally Sound Smart Business

A business podcast with a legal twist

Legally Sound Smart Business is a podcast by Pasha Law PC covering different topics in business advice and news with a legal twist with attorneys Nasir Pasha and Matt Staub.
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