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August 28, 2000

FOIL-AO-12298

The staff of the Committee on Open Government is authorized to issue advisory opinions.
The ensuing staff advisory opinion is based solely upon the information presented in your
correspondence.

Dear

I have received your memorandum of July 20 in which you sought an advisory
opinion.

Attached to the memorandum is a resolution that was approved by the Common
Council of the City of Rensselaer that provides as follows:

"RESOLVED, that the Common Council of the City of
Rensselaer authorizes the execution and delivery of a certain
Stipulation of Settlement and Order which resolves currently
pending tax assessment proceedings initiated by the BASF
Corporation. The Corporation Counsel may approve
modifications to the stipulation and Order provided that the
assessed value for the years 2000 and 2001 are not modified."

You indicated that the Common Council was advised by Corporation Counsel "not to
disclose the terms of the settlement", and the resolution itself does not include the terms of
the agreement. You wrote that "it seems odd that we would have the ability to withhold what
the terms are." In my opinion, the stipulation of settlement is accessible to the public, and in
this regard, I offer the following comments.

First, situations have arisen in which the parties to an agreement or stipulation of
settlement have agreed to refrain from speaking about or disclosing the terms of the
agreement or stipulation on their own initiative. In my view, it is likely that the parties may
validly agree not to speak about a settlement or agreement. However, the Freedom of
Information Law pertains to records, not to speech. In a decision that may be pertinent to the
matter that you described, Paul Smith's College of Arts and Sciences v. Cuomo, it was stated
that:

"Plaintiff was the subject of a complaint made by a former
employee who alleged that he was a victim of age
discrimination. Prior to a scheduled hearing and with the
assistance of an employee of defendant State Division of
Human Rights (hereinafter SDHR), plaintiff entered into a
stipulation of settlement with the complaining employee.
Plaintiff's stated purpose for settling was to eliminate any
negative publicity resulting from a public hearing on the
allegations. The order after stipulation signed by defendant
Commissioner of Human Rights on August 23, 1989 provided
for absolute confidentiality except for enforcement purposes.
The order also provided for the withdrawal of the charges and
discontinuance of the administrative proceeding. Plaintiff did
not admit to a Human Rights violation. On October 27, 1989,
SDHR issued a press release detailing the allegations,
disclosing that the matter hade been settled and set forth certain
parts of the settlement terms" [589 NYS2d 106,107, 186 AD2d
888 (1992)].

The Appellate Division determined that the issuance of the press release "was both arbitrary
and capricious and an abuse of discretion" (id.), but it also found that the stipulation of
settlement was subject to rights of access conferred by the Freedom of Information Law.

I note that it has been held in variety of circumstances that a promise or assertion of
confidentiality cannot be upheld, unless a statute specifically confers confidentiality. In
Gannett News Service v. Office of Alcoholism and Substance Abuse Services [415 NYS 2d
780 (1979)], a state agency guaranteed confidentiality to school districts participating in a
statistical survey concerning drug abuse. The court determined that the promise of
confidentiality could not be sustained, and that the records were available, for none of the
grounds for denial appearing in the Freedom of Information Law could justifiably be
asserted. In a decision rendered by the Court of Appeals, it was held that a state agency's:

"long-standing promise of confidentiality to the intervenors is
irrelevant to whether the requested documents fit within the
Legislature's definition of 'record' under FOIL. The definition
does not exclude or make any reference to information labeled
as 'confidential' by the agency; confidentiality is relevant only
when determining whether the record or a portion of it is
exempt..." [Washington Post v. Insurance Department, 61 NY
2d 557, 565 (1984)].

Second, I believe that the settlement agreement must be disclosed. As a general
matter, the Freedom of Information Law is based upon a presumption of access. Stated
differently, all records of an agency are available, except to the extent that records or portions
thereof fall within one or more grounds for denial appearing in §87(2)(a) through (i) of the
Law. Unless records may justifiably be withheld in accordance with one or more of the
grounds for denial, a claim, a promise or an agreement to maintain confidentiality would,
based on judicial decisions, be meaningless.

In Geneva Printing Co. v. Village of Lyons (Supreme Court, Wayne County, March
25, 1981), a public employee charged with misconduct and in the process of an arbitration
hearing engaged in a settlement agreement with a municipality. One aspect of the settlement
was an agreement to the effect that its terms would remain confidential. Notwithstanding the
agreement of confidentiality, which apparently was based on an assertion that "the public
interest is benefited by maintaining harmonious relationships between government and its
employees", the court found that no ground for denial could justifiably be cited to withhold
the agreement. In so holding, the court cited a decision rendered by the Court of Appeals and
stated that:

"In Board of Education v. Areman, (41 NY2d 527), the Court
of Appeals in concluding that a provision in a collective
bargaining agreement which bargained away the board of
education's right to inspect personnel files was unenforceable
as contrary to statutes and public policy stated: 'Boards of
education are but representatives of the public interest and the
public interest must, certainly at times, bind these
representatives and limit or restrict their power to, in turn, bind
the public which they represent. (at p. 531).

"A similar restriction on the power of the representatives for
the Village of Lyons to compromise the public right to inspect
public records operates in this instance.

"The agreement to conceal the terms of this settlement is
contrary to the FOIL unless there is a specific exemption from
disclosure. Without one, the agreement is invalid insofar as
restricting the right of the public to access."

It was also found that the record indicating the terms of the settlement constituted a final
agency determination available under the Law. The decision states that:

"It is the terms of the settlement, not just a notation that a
settlement resulted, which comprise the final determination of
the matter. The public is entitled to know what penalty, if any,
the employee suffered...The instant records are the decision or
final determination of the village, albeit arrived at by
settlement..."

In a more recent decision, the matter involved the subject of a settlement agreement
with a town that included a confidentiality clause who brought suit against the town for
disclosing the agreement under the Freedom of Information Law. In considering the matter,
the court stated that:

"Plaintiff argues that provisions of FOIL did not mandate
disclosure in this instance. However, it is clear that any
attempt to conceal the financial terms of this expenditure would
violate the Legislative declaration of §84 of the Public
Officer's Law, as it would conceal access to information
regarding expenditure of public monies.

"Although exceptions to disclosure are provided in §§87 and
89, plaintiff has not met his burden of demonstrating that the
financial provisions of this agreement fit within one of these
statutory exceptions (see Matter of Washington Post v New
York State Ins. Dept. 61 NY2d 557, 566). While partially
recognized in Matter of LaRocca v Bd. of Education, 220
AD2d 424, those narrowly defined exceptions are not relevant
to defendants' disclosure of the terms of a financial settlement
(see Matter of Western Suffolk BOCES v Bay Shore Union
Free School District, ___AD2d___ 672 NYS2d 776). There is
no question that defendants lacked the authority to subvert
FOIL by exempting information from the enactment by simply
promising confidentiality (Matter of Washington Post, supra
p567).

"Therefore, this Court finds that the disclosure made by the
defendant Supervisor was ‘required by law', whether or not the
contract so provided" (Hansen v. Town of Wallkill, Supreme
Court, Orange County, December 9, 1998).

In short, absent the proper assertion of a ground for denial appearing in §87(2) of the
Freedom of Information Law, I believe that the stipulation of settlement must be disclosed on
request, notwithstanding a claim of confidentiality.

I hope that I have been of assistance.

Sincerely,

 

Robert J. Freeman
Executive Director

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