Powers v. Zausmer, P.C.

Filing 17

ORDER denying 7 Motion to enforce settlement terms and granting 9 Motion to enforce settlement terms. Signed by District Judge Terrence G. Berg. (DPer)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
2:23-CV-13274-TGB-CI

SOPHIA POWERS,
Plaintiff,

HON. TERRENCE G. BERG
ORDER GRANTING
DEFENDANT’S MOTION TO
ENFORCE SETTLEMENT
TERMS
(ECF NO. 9)

vs.
ZAUSMER, P.C.,
Defendant.

AND DENYING PLAINTIFF’S
MOTION TO ENFORCE
SETTLEMENT TERMS
(ECF NO. 7)
Sophia Powers briefly worked as a legal assistant for a law firm
before she was terminated because of alleged discrimination. As the
Plaintiff in this lawsuit, she sued Zausmer, P.C., her employer, and the
parties reached an early settlement. Unfortunately, for reasons
explained below, a dispute arose as to what was required by the terms of
the settlement. So both parties have now filed Motions to Enforce
Settlement Terms filed by Plaintiff Sophia Powers, ECF No. 7, and
Defendant Zausmer, P.C., ECF No. 9. Each side is seeking to enforce the
settlement terms they agreed upon following mediation. The motions
have been fully briefed. Upon review of the parties’ filings, the Court
concludes oral argument will not aid in the resolution of these matters.

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Accordingly, the Court will resolve the present motions on the briefs. See
E.D. Mich. L.R. 7.1(f)(2).
For the reasons stated below, Defendant’s Motion to Enforce
Settlement Terms will be GRANTED and Plaintiff’s Motion to Enforce
Settlement Terms will be DENIED.
I.

BACKGROUND

Plaintiff Sophia Powers was employed as a legal assistant with
Defendant Zausmer, P.C. from November 8, 2021 until January 20, 2022,
when her employment was terminated by Defendant. Complaint ¶¶ 8,
40, ECF No. 1. Plaintiff filed a charge of discrimination with the Equal
Employment Opportunity Commission (“EEOC”), which issued a right to
sue letter on or about September 27, 2023. Id. ¶ 41 This required Plaintiff
to file suit in federal court within 90 days, or by December 26, 2023. On
December 26, 2023, Plaintiff filed this lawsuit, asserting claims for race
discrimination, retaliation, and harassment under federal and state law,
and claiming compensation under federal and state wage laws. ECF No.
1.
On Saturday, March 2, 2024, the parties and their attorneys
participated in facilitation with retired Wayne County Circuit Court
Judge Cynthia Stephens. The parties reached a settlement and
confirmed that settlement by agreeing to a Term Sheet prepared by
Judge Stephens. ECF No. 10-1 (Sealed). The Term Sheet states that
Defendant is to pay Plaintiff a confidential amount, and that Plaintiff
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“agrees to release any and all claims against” Defendant. Id. The parties
confirmed their clients’ agreements to the outlined terms, and that those
terms would be included in a formal settlement agreement. ECF No. 9-3.
However, two days later, Plaintiff’s counsel emailed defense counsel
asking for “additional consideration” for the settlement—to also have the
$650 mediation fee and $450 complaint filing fee included in the
settlement agreement payment to Plaintiff. ECF No. 9-4. Defense counsel
responded that same day that it was “not willing to re-negotiate the
settlement.” ECF No. 7-3. Defense counsel then sent Plaintiff’s attorney
a draft “long form settlement agreement” for review and comment. ECF
No. 9-5. This draft settlement agreement included a general release of all
claims Plaintiff “has or may have” against Defendant, “including, but not
limited to” alleged violations of a number of listed federal and state
statutes. ECF Nos. 10-2 (Sealed). This list of statutes included the claims
under the Age Discrimination in Employment Act of 1967 (“ADEA”). Id.
In an email, Plaintiff’s counsel asserted that “[t]he language in [the
draft settlement agreement] looks like you took out the revocation
provision and the 21 days to review. [Plaintiff] is over the age of 40 and
you have waiver of ADEA claims in here so you need to add those to the
draft, per the ADEA statute.” ECF No. 7-5. Defendant responded that
“[l]isting the ADEA statute was a mistake, so please remove it from the
list of statutes in the release section.” Id.

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Later that day the parties exchanged additional emails disagreeing
as to whether the settlement agreement must include a release of age
discrimination claims under the ADEA, and thus whether it needed to
include terms complying with the Older Workers’ Benefit Protection Act
(“OWBPA”). ECF No. 9-5. Under the OWBPA, a worker’s waiver of rights
under the ADEA is not considered “knowing and voluntary” unless the
worker receives at least twenty-one days to consider the agreement and
seven days to revoke acceptance after execution. See 29 U.S.C.
§ 626(f)(1)(F), (G).
On March 12, 2024, defense counsel sent an email to Plaintiff’s
counsel stating:
Attached is an updated settlement agreement. We corrected
other mistakes in the agreement which sometimes occurs
when tweaking a prior agreement, and we attempted to
tighten up some duplicative provisions. I have attached both
a redlined copy for your review and a clean copy for your
client’s signature.
As you have had the initial settlement agreement since March
4, please have your client sign the attached revised settlement
agreement and return to us with the necessary tax forms by
March 14. Please also insert the dollar amounts for the two
settlement checks.
In closing, the parties have a signed enforceable term sheet.
If the signed settlement agreement and release is not received
in our office by March 14, please consider this as a request for
concurrence in a motion to enforce the settlement where
Zausmer will ask the court to deduct all the attorneys’ fees it

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has incurred in handling this issue from the total settlement
payment as a sanction.
ECF Nos. 9-7, 10-3 (Sealed), 12-3 (Sealed).
Plaintiff’s counsel responded that same day that she “agree[d] that
they signed an enforceable term sheet[.]”ECF No. 9-7. She contended
however that defense counsel was “trying to deprive [Plaintiff] of her
rights under the ADEA” by not including “the language including
revocation” in the settlement agreement. Id.
Three days later, Plaintiff filed her Motion to Enforce Settlement
Terms. ECF No. 7. Plaintiff requests that the Court “enforce the
[settlement] agreement, which must include the language required by
the ADEA and not permit Defendant to deprive Plaintiff of her rights
under the statute.” Id. Plaintiff argues that a release of ADEA claims
must be “knowing and voluntary” and requires “a period of at least 21
days within which to consider the agreement” and a period of at least
seven days after execution of the agreement for the Plaintiff to revoke the
agreement. Id. (citing 29 U.S.C. § 626(f)(1)(F) and (G).) Plaintiff further
seeks her costs for bringing the motion. Id.
Defendant then filed its own Motion to Enforce Settlement Terms.
ECF No. 9. Defendant argues that the parties agreed to the essential
terms of the settlement but that Plaintiff now wants to revoke her
acceptance of those terms and seek more money by claiming that the
settlement terms must include ADEA claims, which would give her the

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right to revoke her release of all claims. Id. Defendant argues that
Plaintiff cannot use a claim that she cannot bring (because she was 39
years old when terminated and has not timely asserted an age
discrimination claim) to revoke a settlement that has been reached on
non-ADEA causes of action. Id. Defendant requests that the Court order
Plaintiff to sign the settlement agreement and release that conforms to
the terms agreed upon by the parties, reduce the settlement amount by
the costs and fees incurred by Defendant in bringing the instant motion,
and dismiss Plaintiff’s Complaint with prejudice. Id.
The motions have been fully briefed.
II.

LEGAL STANDARD

The Court of Appeals for the Sixth Circuit has long recognized the
broad, inherent authority and equitable power of a district court to
enforce an agreement in settlement of litigation pending before it.
RE/MAX Int’l, Inc. v. Realty One, Inc., 271 F.3d 633, 646 (6th Cir. 2001);
Therma-Scan, Inc. v. Thermoscan, Inc., 217 F.3d 414, 419 (6th Cir. 2000);
see also Brock v. Scheuner Corp., 841 F.2d 151, 154 (6th Cir. 1988) (“It is
well established that courts retain the inherent power to enforce
agreements entered into in settlement of litigation pending before
them.”). Before entry of judgment or dismissal in a case, no separate basis
for jurisdiction is required for the court to enforce the settlement
agreement. Jaynes v. Austin, 20 F. App’x 421, 423 (6th Cir. 2001) (citing
Aro Corp. v. Allied Witan Co., 531 F.2d 1368, 1371 (6th Cir. 1976)). Courts
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may enforce a settlement agreement “even where the agreement has not
been arrived at in the presence of the court nor reduced to writing.” Kukla
v. Nat’l Distillers Prods. Co., 483 F.2d 619, 621 (6th Cir. 1973); see also
Henley v. Cuyahoga Cnty. Bd. of Mental Retardation & Developmental
Disabilities, 141 F. App’x 437, 442 (6th Cir. 2005). Nevertheless, “[b]efore
enforcing settlement, the district court must conclude that agreement
has been reached on all material terms. The court must enforce the
settlement as agreed to by the parties and is not permitted to alter the
terms of the agreement.” Brock, 841 F.2d at 154 (internal citations
omitted).
Questions regarding the formation and enforceability of settlement
agreements are governed by state contract law. Universal Settlements
Int’l, Inc. v. Nat’l Viatical, Inc., 568 F. App’x 398, 401 n. 2 (6th Cir. 2014);
Bamerilease Cap. Corp. v. Nearburg, 958 F.2d 150, 152 (6th Cir. 1992).
In Michigan, “[b]efore a contract can be completed, there must be an offer
and acceptance. Unless an acceptance is unambiguous and in strict
conformance with the offer, no contract is formed. Further, a contract
requires mutual assent or a meeting of the minds on all the essential
terms.” Kloian v. Domino’s Pizza, LLC, 733 N.W.2d 766, 770 (Mich. App.
2006) (internal citations and quotation marks omitted).
“As a general rule, settlement agreements are ‘final and cannot be
modified.’” Clark v. Al-Amin, 872 N.W.2d 730, 736 (Mich. App. 2015)
(quoting Smith v. Smith, 823 N.W.2d 114, 116 (Mich. App. 2011)). Thus,
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“a party cannot void a settlement agreement merely because he has had
a change of heart, nor can he do so merely because his assessment of the
consequences of the settlement was incorrect.” Id. (cleaned up).
III. DISCUSSION
Both Plaintiff and Defendant agree that the parties reached a valid
settlement agreement in this case with all material terms memorialized
in the Term Sheet. ECF No. 7, PageID.36 (“Plaintiff agrees that the
parties entered into an enforceable settlement agreement whose terms
were memorialized in the Term Sheet and original draft of the
agreement.”); ECF No. 9, PageID.70 (“After negotiations, the parties
settled the case, and the settlement was confirmed by way of a terms
agreement, which was acknowledged in writing by Plaintiff and her
attorney.”). See also ECF Nos. 9-3, 10-1 (Sealed). Defendant agreed to pay
Plaintiff a confidential amount and in return Plaintiff agreed to release
any and all claims against Defendant. This Court has the inherent power
to enforce the settlement agreement that was agreed to by the parties.
Therma-Scan, 217 F.3d at 419; Brock, 841 F.2d at 154; Graley v. Yellow
Freight Sys., Inc., No. 98-4166, 2000 WL 799779, at *6 (6th Cir. June 14,
2000) (“When the parties have agreed on the essential terms of a
settlement, and all that remains is to memorialize the agreement in
writing, the parties are bound by the terms of the oral agreement.”).
A review of the record discloses that Plaintiff appears to be having
second thoughts about the terms of the settlement to which she agreed,
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first asking to increase the settlement amount by adding Plaintiff’s costs
of filing the complaint and mediation, and then, when Defendant said no,
arguing that the parties’ settlement agreement must include a provision
granting her 21 days to review the agreement and seven days to revoke
it to address her rights under the ADEA. Defendant argues that Plaintiff
should not be allowed to use a non-viable ADEA claim, which contains a
revocation of rights, as a pretext for disavowing the terms of the agreed
settlement to release non-ADEA claims. The Court agrees.
The OWBPA, which became effective October 16, 1990 as an
amendment to the ADEA, was enacted to clarify the conditions under
which an employee may waive his or her right to bring an ADEA claim
in exchange for a severance or settlement agreement. Parsons v. Pioneer
Seed Hi-Bred Int’l, Inc., 447 F.3d 1102, 1104 (8th Cir.2006) (citing Long
v. Sears Roebuck & Co., 105 F.3d 1529, 1534 (3d Cir.1997)). The OWBPA
“imposes specific requirements for releases covering ADEA claims.”
Oubre v. Entergy Ops., Inc., 522 U.S. 422, 424 (1998). Specifically, waiver
must be “knowing and voluntary,” which requires “at a minimum” that,
inter alia, “the individual is advised in writing to consult with an attorney
prior to executing the agreement” and “the individual is given a period of
at least 21 days within which to consider the agreement” and seven days
to revoke it. 29 U.S.C. § 626(f)(1)(E)–(G). If a release “[does] not comply
with the OWBPA’s stringent safeguards, it is unenforceable against [the

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employee] insofar as it purports to waive or release her ADEA claim[(s)].”
Oubre, 522 U.S. at 427–28 (emphasis added).
Thus, Congress adopted the OWBPA “to ensure that workers did
not carelessly waive a potential ADEA claim.” Chaplin v. NationsCredit
Corp., 307 F.3d 368, 375 (5th Cir. 2002) (emphasis added). However, as
another court in this District explained, “a plaintiff cannot be
characterized as ‘carelessly’ waiving an ADEA claim where they did not
and could not in the future, bring an ADEA claim.” Vensor v. General
Motors, LLC, No. 22-10722, 2023 WL 6519269, at *3 (E.D. Mich. Oct. 5,
2023) (Behm, J.). Here, a review of the Term Sheet shows that the parties
did not include a release of an ADEA claim, or any language requiring a
21-day review period or seven-day revocation period. Such an omission
makes sense because on the facts before the Court, it is clear that
Plaintiff never had the statutory right to bring a claim against Defendant
under the ADEA and thus never had a “potential” ADEA claim that could
be waived. Plaintiff was 39-years-old when she was terminated, and thus
was not, as a matter of law, part of the protected class entitled to bring a
claim under the ADEA. See Arucan v. Cambridge E. Healthcare/Sava
SeniorCare LLC, 347 F. Supp. 3d 318, 338 (E.D. Mich. 2018) (Michelson,
J.) (“[Plaintiff] was only 39 years old on the date she was terminated by
defendants. Thus, plaintiff cannot make out a prima facie case of
discrimination under the ADEA because she was under 40 years old on

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the date she was terminat[ed].”) (internal record citation omitted), aff’d,
763 F. App’x 415 (6th Cir. 2019). These facts are not in dispute.
Plaintiff did not plead a claim under the ADEA in her Complaint,
see ECF No. 1, and in any event failed to do so within 90 days of receiving
her right to sue letter, as required by the ADEA. 29 U.S.C. § 626(e)
(providing that a civil action must be brought “within 90 days after the
date of receipt of such notice.”). Consequently, even if Plaintiff could
allege an ADEA claim against Defendant (which she cannot), she would
nevertheless be barred from bringing such a claim. Because Plaintiff did
not bring an ADEA claim against Defendant, and is statutorily barred
from bringing such a claim by the express provisions of the ADEA, there
is no reason to include the requirements of the OWBPA in the parties’
settlement agreement and release.1

Further, the OWBPA’s revocation provision only applies to ADEA
claims (which Plaintiff cannot bring as a matter of law), and thus would
not entitle Plaintiff revoke acceptance of the entire settlement agreement
as to her non-ADEA claims. See Vensor, 2023 WL 6519269, at *3 n.2
(“[E]ven if a party failed to comply with the OWBPA’s safeguards, the
settlement agreement may remain in effect ‘with respect to all but
Plaintiff’s ADEA claims.’”) (citation omitted); see also, e.g., Harmon v.
Wis. Reg’l Training P’ship, 833 F. App’x 1, 2–3 (7th Cir. 2020) (holding
plaintiff’s reliance on OWBPA was misplaced because she “never claimed
(in [] [the] lawsuit or in an administrative charge) discrimination based
on age, and at the time the settlement was reached, any prospective
charge or lawsuit would have been untimely,” and she therefore had no
claim under the ADEA to release). Likewise, Plaintiff here has no claim
under the ADEA to release.
1

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As discussed above, the parties entered into a valid settlement
agreement memorialized in a written Term Sheet. “[S]ettlements are
favored by the law, and therefore will not be set aside, except for fraud,
mutual mistake, or duress.” Clark, 872 N.W.2d at 736 (citing Streeter v.
Mich. Consol. Gas Co., 65 N.W.2d 760, 764 (Mich. 1954)). Plaintiff has
failed to demonstrate any right to revoke her acceptance of the
agreement, or to include the OWBPA-required review and revocation
language in the settlement agreement. She cannot rely upon the
provisions of a statute for a claim she did not—and cannot—bring to
avoid release of the claims she did bring. And she does not suggest any
other necessary changes to the draft settlement agreement and release
provided by Defendant. Therefore Plaintiff’s request to enforce a
settlement agreement “which includes a release of all claims including
ADEA claims for which a 21-day review and 7-day revocation period
would apply” is DENIED. Defendant’s request to order Plaintiff to sign
a settlement agreement that conforms to the Term Sheet agreed to at
mediation and requires the dismissal of all viable claims is GRANTED.
IV.

CONCLUSION

For the reasons stated above, Defendant’s Motion to Enforce
Settlement Terms, ECF No. 9, is GRANTED, and Plaintiff’s Motion to
Enforce Settlement Terms, ECF No. 7, is DENIED.

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Plaintiff is ORDERED to execute the settlement agreement and
release provided by Defendant that comports with the settlement terms
agreed to by the parties.
The parties are FURTHER ORDERED to provide to the Court a
proposed stipulated order of dismissal with prejudice after the settlement
agreement is executed no later than 30 days from the date of this Order.
The Court will not exercise its discretion to award costs to either
party at this time.
This is not a final order and does not close the case.
IT IS SO ORDERED.
Dated: March 11, 2025

/s/Terrence G. Berg
HON. TERRENCE G. BERG
UNITED STATES DISTRICT JUDGE

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