Court-Authored Settlement Agreement Might Not Suffice

By Sarah Peace

It is important to proceed cautiously and meticulously even with a court-approved settlement of an employee’s claims.  In Walters v. Wal-Mart Stores, Inc., No. 11-5130 (10th Cir. Jan. 8, 2013), a plaintiff brought race, disability, gender, and age discrimination claims against his employer.  They reached a settlement agreement in a conference with a magistrate judge.  They signed a brief memorandum: X dollars for a full release.  But when the defendant’s lawyers prepared a formal agreement, complete with bells and whistles, the plaintiff refused to sign.  The district court enforced its memorandum and the plaintiff appealed.

The plaintiff argued, in part, that the court should not have enforced the memorandum because he was not given twenty-one days to consider its terms.  The Tenth Circuit rejected this argument because the twenty-one day requirement, generally applicable to the waiver of age discrimination claims, does not apply to the settlement of a court case.  However, the Tenth Circuit pointed out that the plaintiff’s waiver of his age claim may not have been “knowing and voluntary” as required by the Age Discrimination in Employment Act (“ADEA”) because he may have had insufficient time to consider the agreement and that the memorandum did not specifically mention the ADEA.

The pro se plaintiff in this case was out of luck because he failed to raise these arguments, but if you are ever in the employer’s position, you might not be so lucky.  Be sure any release of age discrimination claims mentions the ADEA and is “knowing and voluntary.”

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