Settling Employer Cries “Foul” at DOJ’s Press Release

By: Lindsay Hesketh

In a 2-1 decision, the 8th Circuit recently ruled the government’s press release announcing it “found” violations of law against an employer, although false, did not materially breach its settlement agreement with the employer. The Immigrant and Employee Rights Section of the Department of Justice (IER) investigated allegations that the employer discriminated against immigrant workers. Rather than litigate, the parties settled. The settlement agreement included recitals stating that the IER had “reasonable cause to believe” the employer had engaged in unlawful practices, but that the employer denied liability.

After settling, the IER published a press release about the settlement. The release stated its investigation “found” that the company had engaged in the alleged unlawful practices. The employer notified the IER that its press release was a breach of their agreement, and it refused to pay out as it had promised. The IER then sued to enforce the agreement.

The 8th Circuit Court found the IER’s litigation and public relations conduct “troubling” and “suspect.” But the agreement did not expressly limit what the government could publish, and therefore the press release was not a material breach of the agreement. Judge Beam dissented, stating that the IER was under an obligation to describe the agreement accurately, which should have prevented the IER from publishing that it had “found” any violations of the law.

Take away? The government agencies care about their press releases. If you expect specific language in a government release, negotiate for it.

United States v. Nebraska Beef, Ltd., No. 17-1344 (8th Cir. Aug. 27, 2018).