Government included a confidentiality clause in its golden handshake agreement with Roydell Carter, the former head of the Department of Environmental Health.
After a nine-month process following a Freedom of Information request from the Cayman Compass, the Ombudsman decided the details of the publicly funded retirement package do not need to be disclosed under the law.
Sandy Hermiston accepted government’s argument that releasing the information would expose it to potential court action.
Though she accepted submissions from the Compass that non-disclosure agreements should not be used to sidestep the Freedom of Information Law in issues of genuine public interest, she ruled that disclosure of the requested records in this case would constitute an “actionable breach of confidence”.
Carter was said to have retired from the civil service in September last year, after nine months on leave for unspecified reasons. An internal audit report, later released under the Freedom of Information Law, blamed “substantial mismanagement and widespread abuse” of the system within the department for an 800% overspend on overtime.
The report, which highlighted $2 million in overspending on overtime payments, mostly to trash collectors and landfill workers, said Carter, as director, had “substantially failed” to manage the approved budget, to avoid cost overruns and to bring concerns to the ministry.
The Compass submitted an open records request seeking details of “salary, pension, healthcare and any other financial settlement” made with the former director. The request was denied by the Ministry of Health and ultimately went to the Ombudsman for determination.
After a hearing earlier this year, the Ombudsman accepted that the record was exempt from disclosure on the basis of an explicit confidentiality clause signed with Carter following negotiations for his departure from the civil service.
Though she acknowledged the Compass’s argument that there was significant public interest in the information, Hermiston ruled Section 17 of the Freedom of Information Law, which can be used to prevent disclosure of records that may lead to an “actionable breach of confidence”, is absolute and applies regardless of any public-interest concerns.
In its submission to the Ombudsman, the Compass argued that the use of confidentiality clauses to exempt information from release under the FOI Law risked rendering the law ineffective.
Hermiston accepted this argument but said the agreement with Carter prevented potential litigation which could have involved the assertion of blame by one party against the other and the expense of litigation.
“In those circumstances, it is permissible public policy to end the dispute and impose a condition of confidentiality as part of the finality of the compromise,” she wrote.
In general, she said, confidentiality clauses should only be used in “good faith and appropriate circumstances”.
She added, “There is a risk that public authorities may be tempted to use contractual agreements containing confidentiality clauses in order to remove controversial or embarrassing information from public scrutiny.
“The marking of a document as ‘confidential’ by a public authority, or the addition of a confidentiality clause in a contractual agreement, does not place it outside the reach of the FOI Law, or automatically mean that it is exempt from disclosure.
“The strong public policy interest in openness, transparency and accountability expressed in the FOI Law requires a review of whether the expression of confidentiality is appropriate and in good faith. Public authorities should carefully consider whether confidentiality is necessary and appropriate before agreeing to sign an agreement containing a confidentiality clause, and should not use such clauses unless absolutely necessary, such as may be the case in the course of litigation.”