Maine’s Freedom of Access Act (FOAA) is a state statute that is intended to open the government of Maine by guaranteeing access to the “public records” and “public proceedings” of state and local government bodies and agencies (a similar federal statute called the Freedom of Information Act applies to the federal government). These local government agencies include boards operating on behalf of any county, municipality, or school district. So what happens when one of these boards enters into a settlement agreement containing a confidentiality provision?

Pursuant to FOAA, any person, whether or not he or she is a Maine resident, can submit a request to review the public records of a government agency. The agency must acknowledge the request within 5 working days of the receipt of the request and provide any non-privileged documents within a reasonable time.

FOAA provides that certain categories of documents are not public records, including documents that are confidential by statute and documents that are subject to a legal privilege such as the attorney-client privilege or the work-product privilege. There is no general exception, however, regarding settlement agreements to which a government agency is a party. This means that if a town enters into a settlement agreement with a former employee, for instance, the public has a right to access and review the agreement.

It is common for settlement agreements to include confidentiality provisions. Generally, these agreements provide that a breach of the confidentiality provision, i.e., by disclosing the terms of the settlement – or even the existence thereof – to any third party, is a violation of the settlement agreement itself. Often times, the infringing party is subject to liquidated damages and attorney’s fees for any such breach.

This means that if a town enters into a settlement agreement containing a complete confidentiality provision, and the settlement agreement is made available for inspection pursuant to FOAA, the town has violated the settlement agreement and may be liable for damages.

When a government agency negotiates a settlement agreement, it is imperative that the agency considers the fact that the agreement will be subject to inspection under FOAA. From the start of negotiations, the agency should make it clear that the agreement will at least need to include a carve-out providing that it is permitted to disclose the terms of settlement to the extent required by law. And, of course, the agency should never enter into a settlement agreement that contains provisions voiding the agreement or imposing penalties for public disclosures that may be required by law.

Finally, municipalities and other public agencies have no ability approve a final settlement agreement except by a public vote of the municipality or agency’s governing body or board. In a municipality, this may be a city or town council, board of selectmen, or town meeting.

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