Ortiz v. Silver State Ford
Filing
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ORDER Submitting Findings to the District Judge for Consideration of the merits of the 51 MOTION to Enforce Settlement Agreement. Signed by Magistrate Judge Peggy A. Leen on 12/19/11. (Copies have been distributed pursuant to the NEF - ASB)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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JOSE J. ORTIZ,
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Plaintiff,
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vs.
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SILVER STATE FORD,
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Defendant.
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__________________________________________)
Case No. 2:09-cv-01795-GMN-PAL
ORDER AND FINDINGS
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The court held a hearing on December 13, 2011, on Defendant Silver State Ford d/b/a Gaudin
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Ford Porsche’s Motion to Enforce Settlement Agreement (Dkt. #51) filed November 8, 2011. James P.
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Kemp appeared on behalf of the Plaintiff, who was also present, and Scott Mahoney appeared on behalf
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of the Defendant. The court has considered the motion, Plaintiff’s Response (Dkt. #53), Defendant’s
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Reply (Dkt. #56), and the arguments of counsel. The court set the matter for hearing to allow the
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parties to make a record and to make findings of fact. However, because the undersigned assured the
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parties at the settlement conference that she would have no further decision-making responsibility in
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this case to encourage full and frank discussion at the settlement conference, these findings of fact will
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be submitted to the district judge for her decision of the Motion to Enforce the Settlement.
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BACKGROUND
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On October 13, 2011, the undersigned conducted a settlement conference in this matter, and the
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parties reached a confidential settlement. The court entered a Minute Order (Dkt. #50) indicating that a
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settlement was reached, the terms of which are confidential. The order set the matter for a telephonic
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status conference November 15, 2011, indicating that if the stipulation to dismiss was on file before the
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conference, it would be automatically vacated. On October 17, 2011, counsel for Plaintiff sent defense
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counsel a letter indicating that Plaintiff had directed him to revoke the agreement that had been reached
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at the settlement conference. The letter asserts that there was no meeting of the minds at the settlement
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conference; the parties’ agreement was not effective until it was reduced to writing; and Plaintiff could
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revoke the agreement pursuant to 29 U.S.C. § 626(f).
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DISCUSSION
Defendant contends that a settlement was reached. Defendant argues that although there were
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no face-to-face discussions between the parties after the initial joint session, the undersigned went back
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and forth between Plaintiff and Defendant until the parties reached an agreement on a settlement
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amount and other essential terms. Defendant maintains the essential terms that the parties agreed to
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were the amount of the settlement, a general release of liability, dismissal with prejudice with each
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party to bear its own costs and attorneys fees, a confidentiality requirement, non-admission of liability,
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and a no rehire provision. Defense counsel concedes that Defendant intended to include a waiver of
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any Age Discrimination in Employment Act (“ADEA”) claim as part of the finalized agreement and
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that payment of settlement proceeds was to be delayed for thirty days to allow the time to run for waiver
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of any ADEA claim. However, Defendant contends that there was no representation at the settlement
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conference that any potential agreement would first have to be reduced to a mutually-acceptable
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writing. Rather, the written settlement agreement was simply a document intended to memorialize a
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settlement that had already been reached.
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Furthermore, Defendant asserts that 29 U.S.C. § 626(f) has no bearing on whether a settlement
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was reached. That section–the Older Workers Benefits Protection Act (“OWBPA”)– provides that
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certain requirements must be met to waive an age discrimination claim under the OWBPA, including
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one that a person be given twenty-one to forty-five days (depending upon the circumstances) to consider
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an agreement waiving an age discrimination claim. Moreover, once the agreement is signed, the
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plaintiff is then permitted an additional seven days to revoke the agreement. See 29 U.S.C.
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§ 626(f)(1)(F)(I) and (f)(1)(G). Defendant concedes that it expected the Plaintiff to execute a general
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release which would include a waiver of any age discrimination claim and that the twenty-one-day and
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seven-day provisions were to be incorporated into the written settlement agreement. However,
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Defendant argues this does not mean that an otherwise binding settlement agreement was not reached
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until the expiration of the revocation. Rather, the revocation right only arises “following the execution
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of such agreement.” See 29 U.S.C. § 626(f)(1)(G).
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In response, Plaintiff asserts that Flick v. Bank of America, 197 F.Supp.2d 1229, 1233 (D. Nev.
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2002), is dispositive of this matter. In Flick, the court found that it could not enforce a settlement
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agreement in an age discrimination case because 29 U.S.C. § 626(f)(1)(F)(I) requires a plaintiff be
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given twenty-one days to change his mind if he has not executed the settlement agreement. Id. at 1232
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(also noting that in cases where the settlement agreement was upheld, the plaintiff had either signed a
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written statement or agreed to a specific agreement read in open court). Plaintiff argues the Flick court
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also recognized that once a settlement agreement has been executed, a plaintiff is afforded seven days in
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which to revoke the agreement pursuant to 29 U.S.C. § 626(f)(1)(G). Id. at 1233. Additionally, in
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Oubre v. Entergy Operations, Inc., 522 U.S. 422, 427-428 (1998), the Supreme Court held that 29
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U.S.C. § 626 must be meticulously followed in order to obtain a waiver under the ADEA and the
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OWBPA. Plaintiff contends that if Defendant believes that the protections afforded by 29 U.S.C. § 626
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do not apply, then there was no meeting of the minds, and no settlement contract was formed that can
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be enforced by this court.
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Plaintiff asserts that he notified his counsel the day after the settlement conference–October 14,
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2011–that he had changed his mind and did not wish to settle. Plaintiff’s counsel was out of town and
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could not discuss the matter with Plaintiff until October 17, 2011. That same day, he sent a letter to
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defense counsel alerting them that Plaintiff did not want to settle. Alternatively, Plaintiff argues that if
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the court finds an agreement was reached, then Plaintiff chose to revoke it within seven days pursuant
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to 29 U.S.C. § 626(f)(1)(G). Because Defendant insisted upon a waiver of Plaintiff’s ADEA claim, 29
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U.S.C. § 626 applies, and Plaintiff was entitled to a reasonable opportunity to change his mind and not
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settle this case.
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In reply, Defendant concedes that it wanted a general release, and it contemplated that the
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twenty-one and seven day requirements of the OWBPA would be included in the written settlement
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agreement. However, at the settlement conference, Defendant did not state that it would not settle
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without a waiver of the ADEA claims. Defendant asserts Flick is not dispositive of this case because
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Plaintiff did not assert an ADEA claim in his Complaint. Therefore, Plaintiff was not entitled to an
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opportunity to back out of the settlement agreement under 29 U.S.C. § 626(f)(1)(G).
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At the hearing on December 13, 2011, the court allowed the parties to make a record concerning
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the October 13, 2011, settlement conference. The court advised counsel for the parties that an order and
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findings of fact would be made for the district court’s decision of the merits of the motion because the
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undersigned had assured counsel and the parties at the settlement conference that she would no longer
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have any decision-making responsibility in this case.
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FINDINGS
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The Complaint (Dkt. #1) was filed September 9, 2009. It asserts claims under Title VII
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of the Civil Rights Act of 1964 as Amended, the Civil Rights Act of 1991, and the Civil
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Rights Act of 1866, 42 U.S.C. § 1981, and violation of NRS Chapter 613. Plaintiff’s
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claims are based on alleged race, national origin, retaliation and hostile work
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environment. His amended complaint also alleged a sixth cause of action for violation
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of the Family Medical Leave Act. However, the district judge concluded he had
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abandoned that claim and dismissed it in her Order (Dkt. #49) denying Defendant’s
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motion to dismiss and motion for summary judgment except to the sixth claim.
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claim.
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The Plaintiff’s complaint and amended complaint do not allege an age discrimination
On June 16, 2011, the district judge referred this matter to the undersigned to conduct a
settlement conference at the close of discovery. See Minute Order (Dkt. #44).
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The court entered an Order Scheduling a Settlement Conference (Dkt. #46) on July 7,
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2011. The order set the settlement conference for October 13, 2011, and instructed the
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parties to file confidential settlement memoranda containing the information the order
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specified.
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The Order (Dkt. #49) denying Defendant’s motion to dismiss and motion for summary
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judgment was entered September 27, 2011, before the court-ordered settlement
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conference was conducted.
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The court spent more than three hours conducting the settlement conference with
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counsel and an authorized representative of each side. Plaintiff’s wife was permitted to
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attend the settlement conference and was present throughout.
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During the settlement conference, the Plaintiff made the initial demand for a monetary
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amount to settle this case. Counteroffers were exchanged. The Defendant accepted the
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Plaintiff’s counteroffer to settle for an amount of money the Plaintiff requested. As the
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settlement agreement reached was confidential, the court will not indicate the amount of
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the settlement the parties agreed upon.
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Before Plaintiff made the counteroffer which Defendant accepted, the court explained to
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the Plaintiff, in the presence of his wife and counsel, that the Defendant would require a
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written settlement and release agreement containing standard terms familiar to his
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attorney that are common in settlements of employment-related actions in this district.
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The court explained to the Plaintiff that the settlement and release documents would
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contain language releasing all claims against the Defendant, dismissing his case with
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prejudice with each side to be responsible for its own costs and attorneys fees, that the
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settlement would be confidential, and it would contain a provision that Plaintiff would
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not apply for rehire with the Defendant and its related entities. The court also explained
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that the written agreement would contain a provision that the settlement was a
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compromise of a disputed claim and that the Defendant was not admitting liability.
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Defendant accepted Plaintiff’s counteroffer to settle for the monetary amount Plaintiff
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demanded after receiving authority from its authorized insurance representative. The
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court inquired whether defense counsel was requesting any special term or condition of
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the settlement, other than the standard terms incorporated in virtually every employment-
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related settlement in this district. Defense counsel responded that a standard settlement
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and release agreement would be drafted providing for a general release of all claims, a
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dismissal with prejudice with each side to bear its own costs and attorneys fees, a
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confidentiality clause with an exception for disclosure to a tax or other professional for
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tax or legal advice, a provision that Plaintiff would not apply for rehire, and that
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Defendant was not admitting liability.
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10.
After Defendant accepted Plaintiff’s counteroffer, the court advised Plaintiff, in the
presence of his wife and counsel, that the Defendant had accepted his counteroffer. The
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court again went over the standard terms and conditions of the settlement agreement.
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Counsel for Plaintiff, Mr. Kemp, indicated he was familiar with opposing counsel’s
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standard release and agreement, and raised no objections concerning any specific terms.
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Counsel for Plaintiff did, however, request that Defendant issue tax form 1099 for
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settlement proceeds and that two checks be issued, one for the Plaintiff’s portion of
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settlement proceeds, and the second for the attorney’s fees and costs portion of the
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settlement agreement. Defense counsel agreed to this request.
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Counsel for both sides indicated it would take approximately thirty days to prepare,
review and execute settlement documents, and exchange settlement proceeds. The court,
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therefore, set a telephonic status conference consistent with the parties’ scheduling
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needs.
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Counsel for the parties indicated thirty days was a reasonable period to complete the
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settlement agreement and distribute the settlement proceeds because Defendant wanted a
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general release of claims to extend to claims under the ADEA, and the thirty days would
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allow for the twenty-one-day period to allow the Plaintiff to consider the written
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agreement providing for a waiver of an age-discrimination claim, and seven days
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thereafter to exercise his revocation rights under theOWBPA.
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13.
At the December 13, 2011, hearing, counsel for Defendant indicated that a written
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settlement and release agreement was not forwarded to counsel for Plaintiff before
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counsel for Plaintiff sent his October 17, 2011, letter, indicating that the Plaintiff had
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directed him to revoke any agreement that may have been reached at the October 13,
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2011, settlement conference. Counsel for Defendant acknowledged at the hearing that
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the settlement and release agreement Defendant proposed would contain a waiver of any
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ADEA rights.
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Counsel for Defendant requested a waiver of any ADEA claim Plaintiff might later
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assert because Plaintiff has been litigious, and defense counsel wanted to “cover all the
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bases.” However, defense counsel stated on the record at the December 13th hearing
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that, as Plaintiff does not wish to waive any age-discrimination claim, Defendant has
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withdrawn its request for an ADEA waiver.
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15.
During the December 13, 2011, hearing, counsel for Plaintiff conceded that the
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Defendant accepted the Plaintiff’s monetary counteroffer to settle. Counsel for Plaintiff
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also conceded that the parties reached an agreement on the following essential terms: (a)
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the amount of the settlement; (b) that the settlement would include a general release of
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all claims; (c) that this case would be dismissed with prejudice with each side to bear its
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own costs and attorneys fees; (d) that the settlement would be confidential; (e) that
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Defendant would not admit liability; and (f) that Plaintiff agreed he would not apply for
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rehire.
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At the hearing, Mr. Kemp clarified Plaintiff’s position. Plaintiff agreed to all essential
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terms of the agreement, including an agreement to waive any ADEA claim. Counsel for
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the Plaintiff represented that his client asked why it would take thirty days for the
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settlement to be completed and settlement proceeds to be paid. Mr. Kemp explained to
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Plaintiff that because the Defendant had requested a waiver of his ADEA rights, there
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was a waiting period. Mr. Kemp also explained to the Plaintiff that the Plaintiff could
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revoke the settlement before the expiration of the waiting period.
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Plaintiff changed his mind about accepting the settlement counteroffer he made, which
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Defendant accepted, after receiving additional settlement authorization from its
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insurance carrier.
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IT IS ORDERED these findings shall be submitted to the district judge for her consideration of
the merits of the Motion to Enforce the Settlement (Dkt. #51).
Dated this 19th day of December, 2011.
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________________________________________
PEGGY A. LEEN
UNITED STATES MAGISTRATE JUDGE
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