Demissie v. Starbucks Corporate Office & Headquarters, 118 F. Supp. 3d 29

Rahel Demissie (born in Ethiopia) sued Starbucks under Title VII alleging national-origin discrimination and related retaliation; some claims were previously dismissed for failure to exhaust administrative remedies.
The court referred the case to Magistrate Judge Robinson for settlement; the parties participated in four mediations (May 27, June 12, June 25, and November 6, 2014); the November 6 session was conducted by the magistrate’s law clerk.
At prior mediations Starbucks consistently insisted on material settlement terms: voluntary resignation, no rehire, release of all claims except an ongoing workers’ compensation claim, and confidentiality; tax allocation was not discussed until after parties shook hands on November 6.
Counsel and plaintiff shook hands after the November 6, 2014 negotiation and discussed staying discovery and having defense counsel draft the written settlement; tax allocation (whether proceeds would be W-2/back pay or 1099/non-wage) was raised immediately after the handshake.
Post-mediation email exchanges revealed a dispute over tax allocation; plaintiff later refused to resign because her workers’ compensation counsel warned resignation could jeopardize that claim; plaintiff re-noticed depositions and litigation resumed.
The court held an evidentiary hearing and found by clear and convincing evidence that the parties reached a binding oral settlement on November 6, 2014 that must be enforced.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether parties reached a binding settlement on Nov. 6, 2014	No binding agreement; tax allocation and other details were unresolved	Yes; parties agreed on material terms and intended to be bound	Court: Binding oral agreement reached; enforceable
Whether tax-allocation (W-2 vs. 1099) was a material term	Tax allocation is material and lack of agreement prevents enforcement	Tax allocation was not material; it was discussed only after agreement and affects administration only	Court: Tax allocation immaterial under facts; small monetary impact; not a deal-breaker
Whether parties intended to be bound despite lack of a written agreement	No — parties did not finalize language; counsel’s post-mediation emails show disagreement	Yes — handshake, mutual statements to stay discovery, and follow-up actions show intent	Court: Parties intended to be bound by oral terms
Whether plaintiff’s change of heart (workers’ comp concern) defeats enforcement	Plaintiff’s workers’ comp counsel advised resignation would harm that claim, so plaintiff should not be bound	Defendant: after-the-fact concern does not negate prior agreement	Court: Change of heart after agreement does not undo binding settlement

United States v. Mahoney, 247 F.3d 279 (D.C. Cir. 2001) (evidentiary hearing required when factual dispute over settlement existence)
Samra v. Shaheen Bus. and Inv. Grp., Inc., 355 F. Supp. 2d 483 (D.D.C. 2005) (moving party must prove settlement by clear and convincing evidence)
Duffy v. Duffy, 881 A.2d 630 (D.C. 2005) (contract enforceability requires agreement on material terms and intent to be bound)
Queen v. Schultz, 747 F.3d 879 (D.C. Cir. 2014) (materiality of terms is a question of fact)
Perles v. Kagy, 473 F.3d 1244 (D.C. Cir. 2007) (parties need not finalize written language to intend to be bound)
Miller v. Holzmann, 471 F. Supp. 2d 122 (D.D.C. 2007) (post-agreement conduct may be examined to determine intent to be bound)
Eastbanc, Inc. v. Georgetown Park Assocs. II, L.P., 940 A.2d 996 (D.C. 2008) (allocation details that concern administration may be ministerial rather than material)
Blackstone v. Brink, 63 F. Supp. 3d 68 (D.D.C. 2014) (late objections do not necessarily show lack of intent to be bound)