McNamara v. Tourneau, Inc.McNamara v. Tourneau, Inc.
MEMORANDUM DECISION
In this employment case, the parties participated in the Court’s
pro se
mediation program. At the conclusion of the mediation, the parties reached a settlement and signed a stipulation memorializing the principal terms of the agreement.
Pro se
plaintiff Charles McNamara, who was assigned
pro bono
counsel for the mediation, then changed his mind and refused to sign a formal agreement, insisting on going forward with the lawsuit. Defen
BACKGROUND
A. The Facts
For purposes of this motion, I assume that the facts alleged in the complaint (“Compl.”) and the charge of discrimination (“Charge”) attached thereto are true.
In December 2003, Tourneau, a watch retailer, hired McNamara as a sales associate at its 57th Street loсation in Manhattan. (Charge, Attach^ 2). The position required him to spend a substantial amount of time on his feet. (Id. ¶ 11).
On June 3, 2004, McNamara fell on his way to work and injured his back and leg. (Id. ¶ 5). McNamara informed his supervisors at Tourneau of his injury and his need to miss work. (Id. ¶ 7). On June 15, 2004, McNamara returned to work. (Id. ¶ 13). The physical demands of the job, however, exacerbated his injury. (Id.). McNamara called in sick due to pain in his back and leg and missed several more days of work. (Id. ¶¶ 14-16).
On June 28, 2004, McNamara returned to work but left early because of his pain. (Id. ¶ 22). Thereafter, his supervisors began to act in a hostile manner toward him because he needed time off to attend physical therapy. (Id. ¶¶ 20-21). On July 2, 2004, McNamara informed Tourneau that he had scheduled a meeting with the New York City Human Rights Commission (the “Commission”) for July 20, 2004, and that he planned to file a discrimination complaint against Tourneau with the Commission. (Id. ¶ 25). On July 20, 2004, Tour-neau fired McNamara. (Id. ¶¶ 33-34).
B. Procedural History
1. Administrative Charges
McNamara appeared for an intake interview on July 20, 2004, at the Commission. (Pl.’s 4/17/06 Let., Ex. III). The Commission refused to accept the complаint because the Commission determined that McNamara “[flailed to state a claim.” (Id.). McNamara then filed a verified complaint with the New York State Division of Human Rights on or about August 10,2004. (Id. Ex. VI).
On April 25, 2005, McNamara filed a charge with the Equal Employment Opportunity Commission (the “EEOC”) alleging that Tourneau (1) discriminated against him based on his disability, and (2) committed unlawful retaliation against him. (Charge at 1). The EEOC did not make a probable cause finding but issued McNamara a “right to sue” letter so that he could pursue the matter in federal court. (Compl. ¶ 12 & Attach.).
2. This Lawsuit
On September 6, 2005, McNamara commenced this action alleging that Tourneau had violated the Americans with Disabilities Act (the “ADA”), 42 U.S.C. §§ 12112-12117. (Compl. at l). 1 McNamara did not allege a violation of the Age Discrimination in Employment Act (the “ADEA”), 29 U.S.C. § 621. (Id.).
Both McNamara and Tourneau agreed to participate in the program, and eventually both sides signed a form consenting to mediation. On January 19, 2006, this Court formally ordered the case eligible for mediation.
3.The Mediation
On January 25, 2006, the Court’s Pro Se Office assigned attorney Marc Lepelstat to assist McNamara in the mediation. On March 21, 2006, both parties attended the mediation with their respective counsel. During the mediation session, the mediator — an experienced attorney who was also participating on a pro bono basis — spoke to each party separately. (See Pl.’s 4/17/06 Let., at 1; Def.’s 4/19/06 Let., at 1). One of Tourneau’s attorneys, Steven Hurd (who was then with Jackson Lewis LLP and is now with Proskauer Rose LLP), spoke about the November 18, 2005, pretrial conference. When the mediator later spoke separately to McNamara, the mediator said something to lead McNamara to conclude that the mediator mistakenly believed that Hurd had attended the conference. McNamara informed the mediator that Hurd had not been present at the conference. (Pl.’s 4/17/06 Let., at 2; Def.’s 4/19/06 Let., at 1-2). 3
At the end of the mediation session on March 21, 2006, the parties, with the assistance of counsel, reached an agreement, which was memorialized in a stipulation (the “Stipulation”). The Stipulation contained six principal terms, as follows:
1. Settlement Amount is $20,000, subject to normal withholding, payable upon entry of dismissal order.
2. Plaintiff will provide General Release and formal dismissal.
3. Both sides to keep confidential.
4. Mutual non-disparagement.
5. Neutral reference. Title, responsibility and dates of employment.
6. Standard 21 day language.
(Def.’s 4/19/06 Let., Ex. A). Both McNamara and Tourneau’s counsel signed and initialed the Stipulation the same day.
(Id.).
The Stipulation provided that Tour-neau’s counsel would draft “APPROPRIATE PAPERS” within five business days.
(Id.).
Both the Stipulation and a separate document, signed by McNamara, his lawyer, and Tourneau’s counsel, included language that provided: “FOLLOWING MEDIATION THE PARTIES HAVE
4. Post-Mediation
On March 27, 2006, Tourneau’s counsel sent McNamara a copy of a proposed formal settlement agreement (the “Proposed Agreement”) and an order of dismissal. (PL’s 4/17/06 Let., Ex. VII). The Proposed Agreement, in addition to releasing Tourneau from claims relating to the ADA, also released Tourneau from numerous federal and state employment claims that McNamara had not alleged, including, inter alia, claims under the ADEA. (Id. Ex. VIII). This was consistent with the Stipulation, which provided for McNamara to sign a general release. The second-to-last page of the Proposed Agreement, in bold, capital letters, stated, in part, that: “PLAINTIFF HEREBY CONFIRMS THAT HE HAS BEEN AFFORDED TWENTY-ONE (21) DAYS TO CONSIDER THIS NEGOTIATED SETTLEMENT AGREEMENT AND GENERAL RELEASE.” It also provided that “PLAINTIFF ALSO CONFIRMS THAT HE HAS SEVEN (7) DAYS FROM THE DATE HE SIGNS THIS CONFIDENTIAL NEGOTIATED SETTLEMENT AGREEMENT AND GENERAL RELEASE TO REVOKE THIS RELEASE.” (Id.).
On April 11, 2006, in light of the apparent settlement, the Court entered a thirty-day order dismissing the case, subject to reinstatement within thirty days in the event the settlement was not finalized.
On April 17, 2006, McNamara wrote the Court expressing his concern that Tour-neau’s attorney had misrepresented his presence at the November 18, 2005, pretrial conference to the mediator. (Pl.’s 4/17/06 Let., at 1-2). McNamara suggested that this alleged misrepresentation tainted the credibility of the entire mediation process. (Id. at 2). McNamara then attempted to re-plead the merits of his case to this Court. (Id. at 4-6).
On April 28, 2006, the Court held a conference with McNamara and Tourneau’s counsel. At the conference, McNamara reiterated his refusal to sign the Proposed Agreement. 4 On May 1, 2006, the Court issued an order providing that McNamara’s April 17, 2006, letter would be treated as an application to reinstate the action.
On May 11, 2006, Tourneau filed a motion to enforce the Stipulation. Although the Court ordered McNamara to submit his opposition to the motion by May 26, 2006, McNamara did not respond until July 12, 2006, when he did so by letter. McNamara stated that he believed the Stipulation’s reference to “Standard 21 day language” and the Proposed Agreement’s reference to a twenty-one day consideration period meant that he would have twenty-one days to review the Proposed Agreement and “to decide whether or not to sign the settlement.” (PI. 7/12/06 Let., at 1).
DISCUSSION
A. Choice of Law
As a threshold matter, I must consider what substantive law applies in this case,
The Second Circuit has never explicitly held whether state contracts law, as opposed to federal common law, aрplies to agreements settling federal claims.
See Ciaramella v. Reader’s Digest Ass’n,
B. The Merits
1. Applicable Law
a. Contracts Law
It is well established that “[s]ettlement agreements are contracts and must therefore be construed according to general principles of contract law.”
Collins v. Harrison-Bode,
Sometimes, parties sign an informal document, with the understanding that a more formal contract will follow. Courts have recognized two types of informal agreements that bind parties in different ways.
See Adjustrite Sys. v. GAB Bus. Servs.,
Even if parties intend to be bound, it necessarily follows that the contract is unenforceable if there is no meeting of the minds — the parties have a different understanding of the material terms of their agreement.
See Int'l Paper Co. v. Suwyn,
In New York, a contractual term is ambiguous if the meaning is not “definite or precise.”
Computer Assocs. Int’l, Inc. v. U.S. Balloon Mfg. Co.,
b. The ADEA
In 1990, Congress enacted the Old Worker’s Benefits Protection Act (“OWB-PA”) as an amendment to the ADEA. Under OWBPA, any employee wishing to waive an ADEA claim must do so in a “knowing and voluntary” manner. 29 U.S.C. § 626(f)(1). To qualify as “knowing
2. Application
In moving to enforce the Stipulation, Tourneau argues that the Stipulation is a fully binding contract. 7 Although it acknowledges that the reference in paragraph 6 to “Standard 21 day language” is to the type of language contemplated by OWBPA, it contends that McNamarа waived the twenty-one day consideration period and that the seven-day revocation period began to run on March 21, 2006, when McNamara signed the Stipulation. Tourneau further argues that the seven-day period had expired when McNamara wrote his April 17, 2006, letter, advising that he was refusing to settle. 8
Tourneau’s motion thus raises the following issues: (a) did the parties intend to be bound by the Stipulation? (b) if so, did they agree on all material terms? and (c) if so, did the Stipulation permit McNamara to revoke it as late as April 17, 2006? I address each issue in turn.
a. Intent to Be Bound
As an initial matter, I conclude that the Stipulation is a fully binding contract. The Stipulation—which both parties signed—clearly states that the parties reached an agreement to settle the case on six principal terms. Additionally, the context of the settlement discussions demonstrates that this was not a mere agreement to continue negotiations in good faith: Both parties were represented by сounsel and attended court-ordered mediation to settle a pending lawsuit. Therefore, both parties are bound to the six principal terms set forth in the Stipulation, even though the parties never executed a formal contract.
b. Agreement on All Material Terms
Because I conclude that the parties intended to be bound by the Stipulation, I must now determine whether the parties agreed on all material terms. In particular, I must decide whether paragraph 6 of the Stipulation is ambiguous and whether there was a meeting of the minds.
Because paragraph 6 of the Stipulation is ambiguous, I look to extrinsic evidence to determine the pаrties’ intent. Neither party submitted an affidavit as to what the parties intended by the phrase “Standard 21 day language.” The record, however, does contain compelling evidence of the parties’ intent — the Proposed Agreement that Tourneau sent McNamara for execution. Drafted by Tourneau’s counsel a few days after the mediation, the Proposed Agreement undoubtedly reflected the parties’ understanding as to their agreement. I conclude, based on the Proposed Agreement, the language of the Stipulation, and the overall circumstances, that the parties reached a meeting of the minds: They intended that McNamara would have seven days to revoke, from the time he signed a formal settlement agreement.
First, the parties clearly intended to include a seven-day revocation feature, even though the Stipulation did not explicitly include such a provision. The parties understood that the рhrase “Standard 21 day language” would include standard seven-day language as well. The provision of OWBPA that requires a twenty-one day consideration period also requires a seven-day revocation period, 29 U.S.C. § 626(f)(1), and most experienced employment lawyers would understand a reference to “Standard 21 day language” to include, in this context, standard seven-day revocation language as well. Tourneau’s counsel had precisely that understanding, as he includеd a seven-day revocation provision when he drafted the Proposed Agreement.
Second, the Proposed Agreement provided that the seven-day revocation period started when plaintiff signed that document, and it made no reference to the date the parties signed the Stipulation. The draft is thus strong evidence that the parties intended the seven-day revocation period to begin when McNamara signed the formal document.
Third, Tourneau’s аrgument that McNamara waived the twenty-one day consideration period makes no sense and is belied by the language of the Stipulation. If Tourneau were correct, there would have been no reason to include paragraph 6 at all. It makes no sense that the parties would include a provision — Standard 21 day language — that would then, immediately upon execution of the document, be deemed waived. Likewise, Tourneau’s contention that the seven-day revocation period began when the Stipulation was signed also is illogical. The Stipulation gave Tourneau’s counsel five business days to draft a formal agreement, and thus if the parties had intended that the seven-day revocation period commenced when the Stipulation was signed, McNamara would have been left with little time to consider the formal agreement and to revoke the Stipulation.
Thus, although there is some ambiguity in the wording of the Stipulation, its wоrds, the extrinsic evidence, and all the circumstances make the parties’ intent
c. Revocation
Thus, the Court concludes that the parties contemplated, in paragraph 6 of the Stipulation, that McNamara would have seven days after the signing of a formal contract to revoke his agreement to settle. Because McNamara elected to revoke before he signed a fоrmal contract, the seven-day revocation period had not yet begun to run. McNamara’s April 17, 2006, letter, which he sent within twenty-one days after receiving the Proposed Agreement, was timely. McNamara had a right to change his mind; he did so in a timely fashion; and therefore he is not bound to any of the terms of the Stipulation.
CONCLUSION
After much effort on the part of many, Tourneau and McNamara seemingly settled their differences. The Court, a volunteer mediator, McNamara’s pro bono mediаtion attorney, Tourneau, and Tour-neau’s counsel all devoted time and energy to this settlement endeavor. Tourneau agreed to pay McNamara $20,000, not an insignificant sum and only $5,000 less than McNamara’s initial settlement demand. McNamara, with the advice of counsel, agreed to accept that sum. Yet, purportedly because of some irrational notion that Tourneau’s counsel misrepresented to the mediator that he had been present at a pretrial conference, McNamara has had a change of heart, undermining the efforts of all those above.
Nonetheless, for the reasons set forth herein, I conclude that McNamara had the right to revoke. Accordingly, Tourneau’s motion to enforce the Stipulation is denied and the case is hereby reinstated. The parties shall complete all discovery, fact and expert, by February 23, 2007. A pretrial conference will be held on that day аt 2 p.m.
SO ORDERED.
Notes
. On the pro se complaint form, McNamara also indicated that Tourneau violated Title VII of the Civil Rights Act of 1964. Title VII protects against discrimination based on race, color, gender, religion, and national origin. See 42 U.S.C. §§ 2000e-2000e-17. No part of McNamara’s previous administrative charges, however, alleged any discrimination based on Title VII, and McNamara has never alleged that Tourneau discriminated based on race, color, gender, religion, or national origin. Therefоre, the Title VII claim is dismissed.
. Tourneau's April 19, 2006, letter is misdated April 19, 2005. It will be cited as "4/19/06 Let.”.
. Hurd advises that he never told the mediator that he attended the pre-trial conference. (Def.’s 4/19/06 Let., at 2). Hurd notes that even if his statements to the mediator implied that he had been present, Hurd later clarified his participation to the mediator, and thus McNamara suffered no injury. (Id.). The Court accepts Hurd’s representations.
. After the conference, McNamara moved for my recusal, accusing me of improper conduct. In а May 26, 2006, Order, I denied the motion. On November 3, 2006, McNamara again requested my recusal, and I denied the renewed request on November 6, 2006. McNamara's recusal motions continue his pattern of unjustly casting aspersions on others. He accused Tourneau’s attorney of lying to the mediator. He also accused the intake employee at the Commission, who declined to accept his complaint, of being "incredibly prejudiced, discriminatory, offensive, [and] unprofessional.” (PL's 4/17/06 Let., Ex. III).
. This Court has jurisdiction over this dispute, even though the case has been dismissed, because the Court issued an order allowing for reinstatement within thirty days, and McNamara requested reinstatement within the thirty-day period.
. In
Little,
the plaintiff, like McNamara, participated in this court’s employment discrimination mediation program.
Little,
. When he first requested reinstatement of this action, McNamara argued that Hurd's alleged misrepresentation about his presence at the pre-trial conference tainted the entire mediation process. This argument is merit-less. First, to the extent there was a misim-pression, Hurd clarified to the mediator that he did not personally attend the pre-trial conference. Second, whether it was Hurd or one of his colleagues who attended the conference is of no moment, for Hurd surely was briefed on what transpired at the conference. Third, McNamara was represented during the mediation by counsel, and if he had felt that any confusion over Hurd's attendance at the conference had tainted the process, he was free to walk away without signing any agreement. Settlement agreements may not be сast aside merely because of an afterthought or a change of heart.
See Rivera v.
State,
. Finally, Tourneau argues that OWBPA applies only to age discrimination claims and not to the disability and other claims asserted by McNamara in this lawsuit. The argument is rejected. While Tourneau is correct that OWBPA requires consideration and revocation periods only for ADEA claims, parties may agree to include consideration and revocation periods for other types of discrimination claims. Parties may bargain, as a contractual matter, for protections beyond what the law requires.