ELLEN C. KEARNS BACKGROUND - American Bar...
Transcript of ELLEN C. KEARNS BACKGROUND - American Bar...
Settlement Agreements
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SETTLEMENT AGREEMENTS
By
ELLEN C. KEARNS 1
BACKGROUND
From the employer's perspective, the employment relationship is over. The employer
would like to avoid liability as a result of the termination of the employment relationship –
regardless of whether the termination was initiated by the employer or came as a result of a
voluntary resignation initiated by the employee. Whatever the cause of the separation from
employment, the employer would like to know that the employee could not successfully sue as a
result of the separation.
To avoid the costs and upset of litigation, employers ask certain departing employees to
sign a release waiving their right to bring any employment-related legal action against the
employer. In exchange for signing such a release, the departing employee typically receives
severance pay or benefits continuation beyond what the employer's regular policies provide.
This paper discusses various clauses that are generally considered when drafting a Settlement
Agreement.
Attached to this paper are six Settlement Agreements that address a variety of issues
concerning departing employees. The provisions of these Agreements should be reviewed when
drafting particular clauses for a Settlement Agreement. These Agreements are generally
described as follows:
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Exhibit A: Agreement and General ReleaseOfficer and Board of Directors Member
Exhibit B: Agreement and Cover LetterOWBPA Standards
Exhibit C: Agreement and General ReleaseChange to Part-Time Status and Subsequent Resignation
Exhibit D: Severance Agreement - Occupant of Employer's PremisesLetter Form
Exhibit E: State Agency ActionClaim of Sex Discrimination and Retaliation
Exhibit F: State Court ActionClaim of Sex Discrimination
ESSENTIAL ELEMENTS FOR ANY RELEASECertain elements are essential for a release to be valid. These include: a provision for
consideration, a release clause, and the fact that the release was procured without coercion.
ConsiderationFor a release to be enforceable, the employer must give the employee money or other
thing of value which the employee would not otherwise be entitled to receive, in exchange for an
employee's release of legal claims. The following are appropriate "consideration" which may be
exchanged for a valid release.
(1) Severance PaySeverance pay is the most common form of consideration. Severance pay
must be something that the employee was not entitled to receive at the time of his/her separation
from employment. If an employer has a severance pay plan, the severance pay offered to an
employee in exchange for a valid release must be greater than what the employee will receive
under the severance pay plan.
1 Ellen C. Kearns would like to acknowledge the work done by Robert B. Fitzpatrick, Esq. of Fitzpatrick &Verstegen, Washington, D.C. See Settlement of Employment Disputes: A Checklist, published in Drafting
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Severance pay can take many forms: a lump sum payment, salary continuation,
or periodic payments over a certain period of time. Issues that should be addressed when
offering severance pay include:
(a) Is the severance pay taxable as wages, and if so at what rate?
(b) How will the payment of severance pay affect eligibility for unemployment compensation?
(c) What is the risk that the employer could default on the payment of severance pay, and should that risk be addressed in the Settlement Agreement?
(d) Should severance pay be considered as "earnings" when calculating an "employer match" under a 401(k) plan?
(e) Should severance pay be included as earnings in computing pension eligibility.
For clauses dealing with severance pay -- see the following:
Exhibit A: Paragraph 4(a)
Exhibit B: Paragraph 2(a)
Exhibit D: Paragraph 2(a)
Exhibit E: Paragraph 2
Exhibit F: Paragraph 2
(2) Health and Dental Benefits
Of particular importance to an employee who is being terminated is the
ability to continue his/her health care coverage without interruption. In the negotiations for a
Settlement Agreement, the issue will arise as to whether the employer will pay the health care
premiums of the departing employee, and for how long. As we know, terminated employees,
who are covered by the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA)
Employment Documents In Massachusetts, Vol. II (MCLE 1997 and Supp. 1998).
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have the right to continue at their own expense, medical and dental coverage for approximately
18 months after termination. Therefore, it is essential that the Severance Agreement address
what date will be considered the termination date for COBRA coverage. Some state laws require
that an employer allow departing employee to continue health insurance if the employer is not
covered by COBRA. These laws should be referenced when drafting a Severance Agreement.
For clauses dealing with health insurance continuation -- see the following:
Exhibit A: Paragraph 4(b)
Exhibit B: Paragraph 2(b)
Exhibit C: Paragraph 4(d)
Exhibit D: Paragraph 2(b)
(3) Stock OptionsIf the departing employee has acquired a small percentage of stock as part
of his or her compensation, the majority shareholders of the company will generally owe a
fiduciary duty to the departing employee. Issues may arise as to whether the company wants to
buy the options back and at what price. However, a departing employee cannot force a company
to buy back his/her stock options.
A clause dealing with stock issues is as follows:
The parties understand and agree that EMPLOYEE is presently aparticipant in EMPLOYER's "Employee Equity Ownership Plan"in accordance with certain documents executed on or about____________, 19__. The parties further understand and agreethat under the terms of that Plan, EMPLOYEE's vesting will ceaseat the end of the Quarter ending ____________, 19__. Hence, inaccordance with Exhibit A of the "Certificate of Assignment ofEconomic Interest" (copy attached):
(a) EMPLOYER has the right to repurchase _____Units at a total price of $_____, which EMPLOYER herebyexercises and EMPLOYEE acknowledges the receipt of $______as consideration;
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(b) EMPLOYER also has the right to repurchase _____Units at Fair Market Price. EMPLOYER hereby reserves the rightto exercise this option in subsequent discussions with EMPLOYEE,but makes no representations that it will do so.
For other clauses dealing with stock options -- see the following:
Exhibit A: Paragraph 3
Exhibit C: Paragraph 4(b)
(4) Life Insurance
Departing employees may wish to continue coverage under the employer's
Life Insurance Plan until a date certain. The employer's plan documents should be consulted to
determine conversion rights. Sometimes, an employer will agree to continue paying the life
insurance premium of a departing employee for a certain period of time if the plan documents so
allow.
For clauses dealing with life insurance -- see the following:
Exhibit A: Paragraph 4(b)
Exhibit C: Paragraph 4(c)
(5) Disability Insurance
If the departing employee filed a timely claim of disability during the
period of his/her employment with the employer, the insurance carrier will process the
employee's disability claim in order to determine disability coverage. If the disability meets
coverage requirements, a departing employee need not be employed in order to receive disability
benefits. When an employer has both a short term and long term disability policy, meeting the
filing requirement for the short term disability policy is usually sufficient for long term disability
coverage. The following is a clause dealing with long term disability coverage:
EMPLOYER agrees to continue paying EMPLOYEE one-third(1/3) of her regular base salary, subject to appropriate deductionsand withholding taxes, through August 28, 1999, except that if
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EMPLOYEE ceases to be covered by EMPLOYER's long termdisability carrier for all or part of the two-third's (2/3) pay that thecarrier is now paying to EMPLOYEE on account of her disability,the EMPLOYER shall increase its payments to EMPLOYEE so thatshe receives 100% of her regular base salary, subject toappropriate deductions and withholding taxes through August 28,1999. This is the equivalent of one year's salary at theEMPLOYEE's rate of pay in effect on the date of AdministrativeLeave, August 28, 1998. The EMPLOYER's payments shall bemade on the EMPLOYER's regular payday in accordance with theEMPLOYER's regular payroll practices.
(6) Bonuses
A departing employee may argue that he or she is entitled to a portion of
his or her projected bonus at the time of termination. The language of the bonus plan should be
reviewed as well as the parties' practice under that plan to determine if the departing employee is
entitled to a pro-rated bonus. If a bonus is given to an employee in a manner or in an amount
that is more favorable than plan documents provide, it may be considered appropriate
"consideration".
For clauses dealing with bonuses -- see the following:
Exhibit A: Paragraph 4(c)
Exhibit C: Paragraph 1
(7) Company Car
Employers that provide employees with a car for business reasons usually
want that car returned when the employment relationship is terminated. On occasion, the
employer may allow the departing employee to have continued use of the car until the car's lease
expires, or permit the departing employee to purchase the car at the time of his/her termination.
Such offerings may be considered appropriate "consideration".
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For clauses dealing with a company car -- see the following:
Exhibit A: Paragraph 4(d)
Exhibit C: Paragraph 1
(8) Outplacement Services
In an economy with a 2.9% national unemployment rate, the need for
outplacement services for a departing employee may not be as great as in a down-turned
economy. Nevertheless, given the age of the departing employee, his or her skill level, and the
need for "one on one" counseling, outplacement services often provide an important benefit to a
departing employee, and should be considered as part of the "consideration package."
Employees should be advised to discuss the potential tax consequences of outplacement services
with his or her tax advisor.2
For clauses dealing with outplacement services -- see the following:
Exhibit B: Paragraph 2(c)
(9) Office and Support Services
Sometimes, when a high level employee of the company is terminating the
employment relationship, the company will offer the employee the opportunity to use an office,
with telephone and computer access for a limited period of time. Such a benefit may assist the
employee to adequately address his job search needs and may give the impression to potential
new employees, search firms and employment agencies that his or her separation from
employment was mutual. Other support services that may be offered to a departing employee
include answering telephone inquiries, providing for voicemail, typing resumes and providing
other secretarial aid.
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For clauses dealing with office and support services -- see the following:
Exhibit A: Paragraph 4(f)
Release ProvisionA release provision sets forth the employee's promise not to sue the employer, its agents
or its affiliates based on any claim "arising out of or in the course of" the employment
relationship. Generally, the release clause details the types of claims that are being waived to
show that the employee knew that he or she had certain rights, and was choosing to waive these
rights.
The following issues should be considered in drafting the release provision:
• Should the terms of the release be mutual?
• What claims cannot be released under federal or state statutes?
• If applicable, have all the technical requirements of OWBPA been met?
• Should the release explicitly cover all claims for attorneys fees?
• Have any claims not been released? If so, should they be put in a side letter?
• Should there be a separate release for claims under ERISA?
• Can the release cover future claims? What about "present effects of pastacts" language?
• Who is being released? Should the release cover the spouse or significantother?
For clauses dealing with releases -- see the following:
Exhibit A: Paragraph 11
Exhibit B: Paragraphs 10 and 11
Exhibit C: Paragraphs 3 and 14
2 See Rev. Rul. 92-69, 1992-2 CB. 51.
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Exhibit D: Paragraph 4
Exhibit E: Paragraph 4
Exhibit F: Paragraph 3
No CoercionIn order for a release to be valid, it must be procured without coercion, and the
employee must know what he or she is doing. Some factors that have been considered in
determining whether a release is "knowing and voluntary" include:
• the amount of time the departing employee had to review the agreementbefore signing it
• whether the departing employee was able to negotiate any of the terms of theagreement
• whether the departing employee was represented by counsel
• whether the language used in the agreement was "plain language"
• the background of the departing employee
Courts have used a "totality of circumstances" test to determine whether the settlement
was "knowing and voluntary." See, e.g. Borman v. AT&T Communications, Inc., 875 F.2d 399,
403 (2d Cir.), cert. denied, 493 U.S. 924 (1989).
For clauses dealing with the "knowing and voluntary" standard -- see the following:
Exhibit A: Paragraph 20
Exhibit B: Paragraph 19
Exhibit D: Paragraph 7
Exhibit E: Paragraph 11
Exhibit F: Paragraph 11
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OTHER CLAUSES WHICH MAY BE INCLUDED IN A SEVERANCE AGREEMENT
Accrued Vacation, Reimbursable Expenses
At the time of termination, a departing employee may have reimbursable expenses due
and owing, and accrued unused vacation time. The Settlement Agreement should acknowledge
these debts and account for their payment. In many states, accrued vacations are considered
vested, and upon termination the employee is entitled to be compensated for this unused vacation
time. Accrued sick leave, on the other hand, is not considered a vested benefit, unless the
employer has a regular practice of paying for such leave in a lump sum.
For clauses dealing with accrued vacation -- see the following:
Exhibit A: Paragraph 2
Exhibit B: Paragraph 1
Exhibit C: Paragraph 5
Exhibit D: Paragraph 1
A clause dealing with reimbursable business expenses is as follows:
Any business expenses incurred by EMPLOYEE prior toTermination Date that have not yet been submitted forreimbursement may be submitted for approval by EMPLOYER'sChief Executive Officer in accordance with EMPLOYER'sestablished policies. EMPLOYER will not reimburse EMPLOYEEfor any business expenses incurred after Termination Date.
Attorney Fees
Some employers will pay the departing employee's attorneys' fees for negotiating the
Settlement Agreement. Since the employer is required under OWBPA to encourage the
employee to seek counsel, employers view the presence of counsel to be a good influence on the
negotiating process.
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Issues that arise concerning attorney fees include:
• Are paid attorneys fees taxable income to the employee?
• If the employer pays the employee's attorney's fees, should the attorney be given an IRS Form 1099 by the employer?
• If one of the parties allege a breach of the Settlement Agreement, should there be a provision that attorney fees will be paid to the prevailing party?
ConfidentialityEmployers usually want to include in a Settlement Agreement a clause stating that the
parties agree to keep the terms of the release confidential. Keeping a Settlement Agreement
confidential encourages employers to be more generous with respect to "consideration" on the
theory that such a clause would minimize the chance that other employees will hear about the
settlement monies being offered.
Issues that arise with respect to confidentiality provisions include:
• Should it be mutual?
• May an employee discuss settlement possibilities with his/her family members?
• Should the Agreement name a corporate officer who will have control over information access?
• Who will be bound by the confidentiality agreement?
• all employees?• only management employees?• only those who know of its terms?• only the employer?• members of the employee's family?
• Should the confidentiality agreement be included in a liquidated damages clause?
A sample confidentiality clause is as follows:
EMPLOYER and EMPLOYEE each agree to keep the substanceand contents of this Agreement confidential, and further agree not
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to disseminate or discuss with any third party any matters relatingto this Agreement except in response to a valid subpoena and apartfrom that disclosure referred to in the following paragraph.
Nothing herein shall, however, preclude EMPLOYEE fromdisclosing the terms of this Agreement to attorneys or other suchprofessionals who have need for such information as part of theirprofessional responsibilities to EMPLOYEE or to members ofEMPLOYEE's immediate family, or as required by law, providedthat the confidentiality obligations of this Agreement shall apply toall such individuals to whom disclosure is made by EMPLOYEE,and provided further that EMPLOYEE shall advise all suchindividuals of the confidentiality obligations of this Agreement.
For other clauses dealing with confidentiality -- see the following:
Exhibit A: Paragraph 14
Exhibit B: Paragraph 14
Exhibit C: Paragraph 8
Exhibit D: Paragraph 5
Exhibit E: Paragraph 7
Exhibit F: Paragraph 7
Consulting Services
Sometimes an employer would like to retain a departing employee as a consultant for a
certain period of time after termination. It is generally recommended that such an arrangement
be put into a written document which sets forth the duties and responsibilities of the consultant,
the method of compensation, and the employer's intended tax treatment of the consultant. Care
must be taken not to make the consulting arrangements "sound like" an employer/employee
relationship. Tax rules regarding consultant arrangements with former employees should be
reviewed.
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Issues that arise under consulting arrangements include:
• What benefits will the former employee be able to continue as a consultant?
• Can the departing employee work for other companies? Will those earnings offset the settlement amount?
• Will the consultant be allowed to participate in the 401(k) plan and/or the pension plan?
For clauses dealing with a consulting arrangement -- see the following:
Exhibit C: Paragraphs 1 and 2
Another example of a consulting reference is as follows:
EMPLOYER may wish to engage the services of EMPLOYEE as aconsultant. In such instance, EMPLOYER and EMPLOYEE wouldenter into a Consulting Agreement, which shall be separate andapart from this Agreement, to determine the terms and conditionsof the consulting arrangement.
Covenant Not To CompeteThe departing employee may already be covered by a non-competition agreement. If so,
the parties should determine whether the departing employee may continue to be covered for a
period of time after termination. If an employee is not covered by a covenant not to compete, the
employer may seek to include such a provision in a Severance Agreement. State law should be
consulted as some states do not permit noncompetition agreements. Furthermore,
noncompetition clauses should be narrowly drawn as to time and place so that they can be
enforceable.
For clauses deal with noncompetition -- see the following:
Exhibit A: Paragraph 8
Exhibit B: Paragraph 7
An example of reinforcing an existing non-compete agreement is as follows:
EMPLOYEE expressly acknowledges his obligations and reassertshis promises set forth in the "Employment Agreement for Regular
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Employees in Massachusetts" dated ___________, 19__ (copyattached), which is incorporated herein by reference. ShouldEMPLOYEE breach that agreement, all payments and benefitsowing under Paragraphs 1 and 2 above shall cease, andEMPLOYER shall have the right to seek any other legal orequitable relief that may be available.
Liquidated Damages
A liquidated damages clause should be narrowly tailored. The effect of such a clause will
be denied when the stipulated amount is extravagant or disproportionate. Such amounts may
imply fraud, mistake or oppression. Gruschus v. C.R. Davis Contracting Co., Inc., 409 P.2d 500,
504 (N.M. 1995); Raymundo v. Hammond Clinic Ass'n., 449 N.E.2d 276, 283 (Ind. 1983).
There is always a risk that a liquidated damages clause will be invalidated if it is found
excessive.
Under New Mexico law, the standard for determining thereasonableness of a liquidated damages provision in a contract iswhether the amount of liquidated damages are in an amount whichwill provide for a loss or injury which might reasonably have beenanticipated at the time the contract was made, and not the actualamount of a plaintiff's loss or injury following the execution of thecontract.
See also, Whittaker Corp. v. Calspan Corp., 810 F.Supp. 457 (W.D. N.Y 1992).
An example of a liquidated damages clause is as follows:
If breaches any of his/her obligations hereunder,he/she shall forfeit [the health insurance benefits] or [severancepay] provided pursuant to this Agreement.
NonadmissionEmployers usually insist that a Settlement Agreement contain a non-admission clause.
For clauses dealing with "non-admission" see the following:
Exhibit A: Paragraph 13
Exhibit B: Paragraph 13
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Exhibit C: Paragraph 10
Exhibit E: Paragraph 6
Exhibit F: Paragraph 6
NondisparagementEmployers want to assure that a departing employee will not disparage the Company or
its management staff. Similarly, an employee would like to assure that the employer will not
disparage the employee's reputation in his/her absence. For these reasons, the parties often agree
to a mutual nondisparagement clause.
Issues that arise with respect to disparagement clauses include:
• Who is bound by the clause?
• Does it cover former employees disparaging the departing employee?
For clauses dealing with nondisparagement --see the following:
Exhibit A: Paragraph 10
Exhibit B: Paragraph 9
Prohibition On Reapplying For Employment
Employers who enter into a Settlement Agreement with a departing employee usually
want to assure that the departing employee will not return. As a result, the employer often
demands that a provision be included in the Agreement which provides that the terminated
employee must never again apply for employment with the company, its successors and assigns.
Employers should be aware that such clauses may be unlawful if applied to a person protected by
the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § § 621 et seq.
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Moreover, employee's counsel need to be concerned that such a provision is not so
broadly drafted as to preclude an employee from working in a field of interest that is limited to a
small number of companies or to a particular geographic area.
For clauses dealing with Prohibition on Reapplying for Employment, see:
Exhibit A: Paragraph 11
Exhibit B: Paragraph 10
Exhibit C: Paragraph 6
Exhibit E: Paragraph 5
Exhibit F: Paragraph 4
References
For employees, who have worked for their employer for a considerable period of time, a
neutral or positive reference may be critical to their obtaining a new position.
Issues that arise with respect to reference provisions include:
• Who will sign the reference?
• What happens if the employer makes statements inconsistent with the letter of reference?
• How will the Company handle an inquiry from a prospective employer which asks, "Would you rehire this person?"
• Does the employee want the employer to provide a verbal reference?
• What will Company records say about the terminated employee?
A sample of a reference clause is as follows:
EMPLOYER agrees that all employment-related inquiriesregarding EMPLOYEE's employment will be directed to_________ or his/her designee in the Human Resources office whowill state that it is Company practice to provide only the followinginformation about former Company employees: dates of
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employment, positions held, duties and the responsibilities of thepositions held, and salary information. EMPLOYER furtheragrees that it will not disparage EMPLOYEE's reputation withrespect to responding to any employment-related inquiries.
Another example of a reference clause can be found in Exhibit E,Paragraph 5.
SeverabilityA "Severability" clause usually provides that if a particular provision in a Settlement
Agreement is found to be unenforceable, the rest of the agreement is left intact. Employees'
counsel often contend that such a provision is unfair because the unenforceable provision may be
so essential to the Agreement's intent that the provision's invalidation renders the rest of the
Agreement pointless. Therefore, they often request that language be added to the severability
clause to distinguish between material and nonmaterial provisions found to be non-enforceable.
Usual Severability Clause
Should any provision of this Agreement be declared or bedetermined by any court of competent jurisdiction to be illegal orinvalid, the validity of the remaining parts, terms or provisionsshall not be affected thereby and said illegal or invalid part, termor provision shall be deemed not to be part of this Agreement.
Modified Severability Clause
Should any provision or part of any provision of this Agreement befound to be legally unenforceable and/or against public policy,such that the material provisions of this Agreement are notaffected thereby, such enforceability shall not prevent enforcementof the remaining provisions or parts of the Agreement. If anymaterial provision of this Agreement is found to be invalid orunenforceable, then the entire Agreement is voidable at the optionof either party.
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Trade Secrets, Company Property, Customer Lists
The Company will want to assure that its trade secrets, property and customer lists do not
follow the departing employee out the door. Provisions for returning all company property,
including customer lists are usually included in a Settlement Agreement. Specific clauses that
ensure their return sometimes provide that their breach is a material breach of the Agreement.
For clauses dealing with trade secrets, company property and customer lists -- see the
following:
Exhibit A: Paragraphs 7 and 9
Exhibit B: Paragraphs 6 and 8
Exhibit C: Paragraph 7
Exhibit D: Paragraph 3
Unemployment Benefits
Employees often want the Settlement Agreement to specifically state that the employer
will not contest the departing employee's application for unemployment benefits. Some of the
issues that must be considered regarding unemployment benefits include the following:
• Does the granting of severance pay affect eligibility for unemployment benefits?
• Does it make a difference under state unemployment statutes or regulations if the severance pay is paid in a lump sum as opposed to periodic payments or salary continuation.
• What will be the termination date for unemployment benefits?
• Will the employer contest the departing employee's application for unemploymentbenefits?
• What will the employer say to the unemployment agency regarding the termination?
• Will the employer contest an appeal of denial of benefits?
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A sample clause dealing with unemployment benefits is as follows:
The Company agrees not to contest any claim that Mr./Ms.__________ may make for unemployment benefits to commence onor after _________, 19__.
BREACH AND ENFORCEMENT
Breach
Settlement Agreements have many provisions, some of which are of greater value to the
parties than others. The parties may agree on how to address a breach of the agreement, and
whether to distinguish between material and nonmaterial breaches:
The parties agree that in the event one party breaches any part orparts of this Agreement, legal proceedings may be institutedagainst the party for breach of contract [and any other payments,services or benefits otherwise due and owing hereunder shallimmediately cease.] [The parties agree that in the event of amaterial breach of this Agreement by either party, the other partyis entitled to cease performances of any of the remainingobligations under the Agreement that it may have.]
Sometimes the parties include a provision which allows the party who has allegedly
breached the agreement to attempt to remedy the alleged nonperformance before civil action
begins. An example of such a provision is as follows:
If the Company believes that you have breached a materialprovision of this Agreement it shall provide you with not fewerthan 14 calendar days notice before stopping payments due youunder paragraph __ of this Agreement in order to afford you anopportunity to respond to and/or remedy your allegednonperformance of your obligations under this Agreement.
If the Agreement is silent on the law to be applied, state law will determine whether the
former employee can receive either compensation for the breach, or damages relating to claims
underlying the release. The general rule is that a former employee who executes a Settlement
Agreement cannot "subsequently seek both the benefit of the settlement and the opportunity to
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continue to press the claim he or she agreed to settle." Wilmes v. United States Postal Serv., 810
F.2d 130, 132 (7th Cir. 1987) (quoting Kirby v. Dole, 736 F.2d 661, 664 (11th Cir. 1984).
In Spiridigliozzi v. Bethlehem Mines Corp., Cambria Division, 558 F. Supp. 734, 736 n.1
(W.d. Pa. 1980), the parties had agreed to a "predetermination settlement" approved by the
EEOC. That document terminated proceedings before the EEOC which had alleged sex
discrimination. Subsequently, the plaintiff applied to the defendant for re-employment, but she
was not re-hired. She filed a new charge alleging sex discrimination and retaliation. Many of
the issues presented by the new complaint were precluded by the predetermination settlement.
The district court addressed whether the plaintiff's prior claim could be resurrected as follows:
The alleged non-compliance does not appear to relate to a mattersufficiently substantial to justify invalidation of the settlementagreement after receipt of the $5,692.00 by plaintiff.3
In Sawka v Healtheast, Inc., 989 F.2d 138 (3d Cir. 1993) the employee alleged that the
employer defaulted in making disability payments under the Settlement Agreement. The court
held that the employer's default was no reason to set aside the Settlement Agreement. Rather, it
gave rise to a cause of action for enforcement.
For clauses dealing with breach -- see the following:
Exhibit A: Paragraph 15
Exhibit B: Paragraph 15
Enforcement
(1) Forum/Applicable Law
Often, the Settlement Agreement will set forth the forum in which an alleged
breach of the Agreement is to be redressed. In Lambert v. Kysar, 983 F.2d 1110, 1115 (1st Cir.
3 558 F. Supp. 734, 736 n.1 (W.D. Pa. 1980).
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1993) the first circuit provided a list of cases which support the proposition that "federal courts
have long enforced forum selection clauses as a matter of federal common law." Id. See also
Francis M. Dougherty, Annotation, Validity of Contractual Provision Limiting Place or Court in
which Action May Be Brought, 31 A.L.R. 4th 404 (1992). If state court is the chosen forum for
enforcement actions, plaintiff's counsel may seek a clause prohibiting removal to federal court.
If arbitration is selected by the parties as the forum in which to resolve an alleged breach,
the procedure to govern the arbitration process should be carefully delineated in the Agreement.
For clauses dealing with forum/applicable law issues -- see the following:
Exhibit A: Paragraphs 17 and 18
Exhibit B: Paragraph 17
Exhibit E: Paragraph 9
Exhibit F: Paragraph 9
(2) Contempt ProceedingsA Settlement Agreement is a contract, and the remedy for its breach is a breach of
contract action. In order to enforce the Settlement Agreement through a civil contempt
proceeding, Rule 65(d) of the Federal Rules of Civil Procedure requires that the provisions of the
Settlement Agreement be expressly set forth in a judicial order. See, e.g. Thomas V. Brock, 810
F. 2d 448, 450 (4th Cir. 1987). In D. Patrick, Inc. v. Ford Motor Co., 8 F.3d 453, 461 (7th Cir.
1993) the Court retained jurisdiction to enforce the Settlement Agreement, but this was found
insufficient to transform the Agreement into a court order enforceable through a contempt
proceeding.
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(3) Return of ConsiderationIn Oubre v. Entergy Operations, Inc., 118 S. Ct. 838 (1998) the plaintiff signed a
Settlement Agreement which released all claims against her former employer. In exchange,
plaintiff received a severance package that was to be paid to plaintiff over a period of time. At
the time plaintiff executed the release, she was not aware that the release violated the
requirements of the Older Workers Benefits Protection Act (OWBPA). That is, the release failed
to provide the 21-day consideration period, failed to give the plaintiff seven days to revoke the
agreement, and failed to make specific reference to ADEA claims. After receiving all of her
severance monies, plaintiff sued her former employer alleging age discrimination. The employer
moved for summary judgment claiming the plaintiff had ratified the defective release by failing
to return the monies she had received. Both the district court and the Fifth Circuit agreed, and
allowed the employer's summary judgment motion.
The Supreme Court reversed the Fifth Circuit decision. It held that "the OWBPA
implements Congress' policy [of protecting older workers' rights and benefits] via a strict,
unqualified statutory structure on waivers and [this Court is] bound to take Congress at its word".
118 S. Ct. at 841.
However, the Supreme Court stated that defendants may still have claims for restitution,
recoupment or set-off against the plaintiff. The Court further stated that these issues may be
complex where a release is effective as to some claims but not as to ADEA claims". 118 S. Ct.
at 842.
The Supreme Court reaffirmed that Settlement Agreements were to be treated as
contracts and analyzed under basic contract principles. It added "in equity, a person suing to
rescind a contract, as a rule, is not required to restore the consideration at the very outset of the
litigation." 118 S. Ct. at 841.
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EXHIBIT AAGREEMENT and GENERAL RELEASE
This Agreement and General Release (“Agreement”) is made by and between
, (“EMPLOYER”) and
, ("EMPLOYEE"). As used herein,
“EMPLOYER” shall also include EMPLOYER’S subsidiaries, affiliates, predecessors,
successors, assigns, officers, directors, shareholders, agents, employees, independent contractors,
attorneys, and other representatives; “EMPLOYEE” shall also include his executors, heirs,
administrators, assigns, attorneys, and other representatives.
WHEREAS, the parties mutually desire to terminate their employment relationship on
(“Termination Date”). They therefore agree as follows:
1. At the same time that he executes this Agreement, EMPLOYEE shall submit
written resignations from his positions as an officer and director of EMPLOYER in the form
appended hereto as Exhibits A and B.
2. EMPLOYER and EMPLOYEE agree that as of Termination Date, EMPLOYEE
has been paid in full for all past services including unused vacation through Termination Date.
3. EMPLOYER agrees that as of Termination Date, whatever rights and benefits
EMPLOYEE is entitled-to under EMPLOYER's Stock Option Agreements shall remain in full-
force and effect under the provisions of such Agreements, attached hereto as Exhibits C and D.
4. EMPLOYER agrees that as of Termination Date, it shall provide the following
payments and benefits to EMPLOYEE, subject to the time limitations set forth in Paragraph 5
below:
(a) An amount equal to EMPLOYEE’S current monthly base salary (gross
$___________), less withholding taxes and appropriate deductions, for the period
through __________. Said payments shall be made on
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EMPLOYER’S regular payday and in accordance with EMPLOYER’S payroll
policies for management personnel then in effect.
(b) All of the premium costs, except $______ a month, for participation by
EMPLOYEE in EMPLOYER’S health insurance plan; 100% of the premium
costs for participation by EMPLOYEE in EMPLOYER’S dental insurance plan;
100% of the premium costs for participation by EMPLOYEE in EMPLOYER’S
life insurance plan, the face value of such plan being $_________.
(c) EMPLOYEE’S shares of the 19__ and 19__ Executive Bonus Pool are
$_______ and $_______ respectively. The total of these amounts shall be paid to
EMPLOYEE in __________ equal payments, less withholding taxes and
appropriate deductions, on a monthly basis, from ___________ to __________.
(d) EMPLOYEE shall be entitled to continued use of the leased automobile
which he used while employed with EMPLOYER until the lease has expired or
until the month when his salary continuation expires, whichever date is earlier,
under the same conditions which he enjoyed while employed by the
EMPLOYER.
(e) EMPLOYEE shall be entitled to continued coverage under the
EMPLOYER's NY Life life insurance policy with a coverage amount of
$1,000,000 until _______________.
(f) EMPLOYEE shall be entitled to maintain an office and its usual and
customary expenses at the EMPLOYER's place of business until _________,
19__.
(g) EMPLOYEE shall be entitled to continue his use of an assigned parking
space at the _________________ until ___________, 19__.
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5. EMPLOYER agrees to provide the benefits described in Paragraph 4(b) above for
the period through or until EMPLOYEE becomes eligible for health,
dental or accident insurance coverage by virtue of alternative employment elsewhere. It shall be
EMPLOYEE’s obligation to promptly notify EMPLOYER when he commences such
employment, should he do so prior to .
6. Insofar as EMPLOYEE may be eligible for continued health coverage after June
30, 2001 under the federal COBRA law, EMPLOYEE may continue such coverage for any
remaining period of eligibility provided EMPLOYEE pays the entire cost of the premiums then
in effect.
7. EMPLOYEE agrees that at the time of executing this Agreement he shall return to
EMPLOYER all property belonging to EMPLOYER including, but not limited to, all keys,
office equipment, documents, records, customer files, written materials, electronic information,
credit cards bearing EMPLOYER’S name, and other EMPLOYER property (originals or copies
in whatever form) in his possession. EMPLOYEE represents that he retains no copies of
confidential documents beyond those returned as specified above, and will make no attempt to
acquire such documents in the future.
8. For a period of ___ years, EMPLOYEE shall not, directly or indirectly, whether
as owner, employee, investor or other participant, compete with EMPLOYER with respect to any
business in which EMPLOYER may be engaged. In addition, for the same period of time the
EMPLOYEE shall not, directly or indirectly, attempt to employ, approach in connection with
employment or otherwise induce any employee of EMPLOYER or any of its subsidiaries to
leave their employment.
9. EMPLOYEE recognizes that in connection with his employment he came into
possession of confidential or secret data, procedures, techniques, plans, business operations,
customers, business practices or other information of EMPLOYER. EMPLOYEE agrees not to
disclose, use or otherwise make available to any person any confidential information at any time
for any purpose. Notwithstanding the foregoing, in the event any confidential information shall
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at any time come into the public domain other than as a result of violation of the foregoing
agreement by EMPLOYEE, the provisions of this Section shall not apply solely with respect to
such confidential information lawfully obtained.
10. EMPLOYEE agrees to not make any oral or written communication to any person
or entity which disparages, or has the effect of damaging the reputation of, or otherwise working
in any way to the detriment of, EMPLOYER.
11. In consideration of the terms hereof, EMPLOYEE agrees to waive any claims he
may have for employment or reemployment by EMPLOYER in the future, and further hereby
releases and forever discharges EMPLOYER from any and all claims, demands, and liabilities
whatsoever of every name and nature, whether known or unknown, arising out of or related to
EMPLOYEE’S employment, or to the terms, conditions, or termination from his employment,
which EMPLOYEE now has or has ever had against EMPLOYER. This release shall include
without limitation any claims for lost wages or benefits, stock options, compensatory damages,
punitive damages, attorneys’ fees, equitable relief, or any other form of damages or relief.
This release shall further include, without limitation, all common law claims including
claims in contract or tort, and including, but not limited to, breach of contract, wrongful
discharge (including claims for constructive discharge), intentional or negligent infliction of
emotional distress, misrepresentation, interference with prospective economic advantage,
interference with contractual relations, defamation, negligence, or breach of the covenant of
good faith and fair dealing.
EMPLOYEE specifically releases and forever discharges EMPLOYER from any and all
claims based upon any allegation of unlawful employment discrimination under any federal,
state, or local law, regulation, or ordinance.
12. EMPLOYEE represents and states that he has not and will not file any complaints
or charges against EMPLOYER with any local, state or federal agency or court, for the purpose
of recovering damages on his own behalf.
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13. It is understood and agreed that this Agreement does not constitute an admission
by EMPLOYER or EMPLOYEE that any action either has taken was unlawful or wrongful, or
that any action constituted a breach of contract or violated any federal, state, or local law, policy,
rule or regulation.
14. EMPLOYEE agrees that this document and any and all matters concerning this
Agreement will be regarded as a privileged and confidential communication between the parties
and that he will not disclose, disseminate or release such matters by publication of any sort, in
any manner or means, to any person.
15. EMPLOYEE acknowledges that any breach by him of any of the terms of this
Agreement shall immediately relieve and excuse EMPLOYER from its obligations under
Paragraph 2 above, and EMPLOYER shall have the right to seek any other legal or equitable
relief that may be available.
16. If any of the provisions of this Agreement shall be held invalid, the remainder of
this Agreement shall not be affected thereby, and shall remain in full force and effect.
17. This Agreement contains the entire agreement between the parties, and shall be
governed by the laws of the Commonwealth of Massachusetts and shall be considered a sealed
instrument thereunder. This Agreement may not be changed orally, but only by an agreement in
writing signed by the party against whom enforcement of any waiver, change, modification or
discharge is sought.
18. Should a dispute arise between the parties concerning this Agreement, including
without limitation, a dispute involving the interpretation, application, or compliance with the
specific terms and conditions of this Agreement, the dispute shall be submitted to arbitration.
The procedure for arbitration shall be as follows:
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(a) A representative for such party shall submit the name of a
proposed arbitrator to the other. If no mutually acceptable arbitrator can
be selected within a thirty (30) day period, then either party may request
lists from the American Arbitration Association (AAA) and the selection
of an arbitrator shall be made in accordance with its rules.
(b) Hearings and post-hearing activities shall be conducted in
accordance with the AAA's Voluntary Labor Arbitration Rules.
(c) The Arbitrator shall have no power to add to, subtract from,
modify, or disregard any of the provisions of this Agreement. The
decision of the Arbitrator, which shall contain a full written statement of
the grounds upon which the issues are decided, shall be final and binding
on the parties. The EMPLOYEE further agrees that if the subject matter
submitted to arbitration is, at any time prior to the arbitrator's decision,
submitted to the EEOC, the MCAD, the Workers' Compensation Board,
OSHA, or to any other federal or state court, then such grievance, or any
decision rendered thereon by the neutral arbitrator, may at the option of
the EMPLOYER, be declared null and void and of no force and effect.
(d) Each party shall bear the expenses of preparing and presenting its
own case. The compensation and expenses of the impartial chairman shall
be borne equally by the parties.
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19. The parties attest that no other representations were made regarding this
Agreement other than those contained herein.
20. EMPLOYEE enters into this Agreement knowingly and voluntarily, and
acknowledges that he has read and understands the language of this Agreement. EMPLOYEE
further acknowledges that he was given an opportunity to consider this Agreement and advised
to consult an attorney.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day and
year written below.
[Corporate Seal] EMPLOYER
DATE: By:
Its:
EMPLOYEE
DATE:
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Appendix A
Dear _________:
I hereby resign from my position as an officer of _________________, to be effective on________________.
Sincerely,
__________________
Date:
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Appendix B
Dear __________:
I hereby resign from my position as a member of the Board of Directors of____________________, to be effective on _____________.
Sincerely,
Date:
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EXHIBIT B
SAMPLE COVER LETTER
_________, 1999
Dear _____________:
Enclosed please find two original copies and a photocopy of an Agreement whichincorporates the terms we discussed. If you agree to execute this document, you will receive theseverance and continued insurance benefits spelled out in the Agreement. Conversely, you willrelease __________ of any and all claims you might have or allege to have against it or itsrepresentatives through the date of the execution of the Agreement.
You have until , 1998 -- a period of 21 days -- to consider this Agreement.If you do sign the Agreement, you will have seven days to revoke your acceptance of it, and theAgreement will not become effective until that seven-day period has expired.
I strongly advise you to read the Agreement, discuss it with your family, and consult anattorney. If you have any questions, or if you do not understand any part of this letter or theAgreement, please do not hesitate to bring them to my attention.
If this Agreement is acceptable to you, please sign both original copies and return them tome in the enclosed envelope. I will return a fully executed original of the Agreement to you.
Sincerely,
____________________
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AGREEMENT and GENERAL RELEASE
This Agreement and General Release (“Agreement”) is made by and between
_____________________, ______________________________, (“EMPLOYER”) and
_____________________, ______________________________, ("EMPLOYEE"). As used
herein, “EMPLOYER” shall also include EMPLOYER’S parent, affiliates, predecessors,
successors, assigns, officers, directors, shareholders, agents, employees, independent contractors,
attorneys, and other representatives; “EMPLOYEE” shall also include his executors, heirs,
administrators, assigns, attorneys, and other representatives.
WHEREAS, the parties intend to terminate their employment relationship on
___________, 19__ (“Termination Date”) and mutually desire to fully and finally resolve any
and all disputes between them in an amicable manner, they therefore agree as follows:
1. EMPLOYER and EMPLOYEE agree that as of Termination Date, which is the
last day of EMPLOYEE’S administrative leave, EMPLOYEE was paid in full for all past
services including unused vacation through Termination Date.
2. EMPLOYER agrees that as of Termination Date, it shall provide the following
payments and benefits to EMPLOYEE, subject to the time limitations set forth in Paragraph 3
below:
(a) An amount equal to EMPLOYEE’S current monthly base salary (gross
$_________), less withholding taxes and appropriate deductions, for the period
__________, 19__ through _________, 19__. Said payments shall be made on
EMPLOYER’S regular monthly paydays and in accordance with EMPLOYER’S
payroll policies for management personnel then in effect.
(b) 80% of the premium costs for participation by EMPLOYEE and his
dependents in EMPLOYER’S health insurance plan; and 50% of the premium
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costs for participation by EMPLOYEE and his dependents in EMPLOYER’S
dental insurance plan.
(c) Outplacement services not to exceed $2,500. EMPLOYER reserves the
right to select the person or agency providing such service. EMPLOYER will also
provide counseling services through the EMPLOYER's Employee Assistance
Program. Such services shall also not exceed $2,500.
3. EMPLOYER agrees to provide the payments and benefits described in Paragraph
2 above for the period ___________, 19__ through ___________, 19__, or until EMPLOYEE
accepts alternative employment, whichever occurs sooner. It shall be EMPLOYEE’S obligation
to notify EMPLOYER as and when he commences employment, should he do so prior to
__________, 19__. In the event that EMPLOYEE accepts alternative employment at a gross
salary less than that referenced in paragraph 2(a) , EMPLOYER will make up the difference
thereto.
4. Any other payments, benefits or other remuneration heretofore provided by
EMPLOYER to EMPLOYEE and not listed in Paragraph 2 above shall cease as of Termination
Date.
5. Insofar as EMPLOYEE may be eligible for continued health and dental coverage
after _________, 19__, under the federal COBRA law, EMPLOYEE may continue such
coverage for any remaining period of eligibility provided EMPLOYEE pays the entire cost of the
premiums then in effect.
6. EMPLOYEE agrees that at the time of executing this Agreement he shall return
all property belonging to EMPLOYER including, but not limited to, all keys, office equipment,
documents, records, customer files, written materials, electronic information, credit cards
bearing EMPLOYER’S name, and other EMPLOYER property (originals or copies in whatever
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form) in his possession, except that EMPLOYEE may keep the personal computer currently
provided to EMPLOYEE by EMPLOYER. EMPLOYEE represents that he retains no copies of
confidential documents beyond those returned as specified above, and will make no attempt to
acquire such documents in the future.
7. For a period of one year from Termination Date, EMPLOYEE shall not, directly
or indirectly, whether as owner, employee, investor or other participant, compete with
EMPLOYER with respect to any business in which EMPLOYER may be engaged within any
city or town in which EMPLOYER operated a banking office or within any contiguous city or
town. In addition, for a period of one year from Termination Date, EMPLOYEE shall not,
directly or indirectly, attempt to employ, approach in connection with employment or otherwise
induce any employee of EMPLOYER or any of its subsidiaries to leave their employment.
8. EMPLOYEE recognizes that in connection with his employment he came into
possession of confidential or secret data, procedures, techniques, plans, business operations,
customers, business practices or other information of EMPLOYER. EMPLOYEE agrees not to
disclose, use or otherwise make available any confidential information at any time for any
purpose. Notwithstanding the foregoing, in the event any confidential information shall at any
time come into the public domain other than as a result of violation of the foregoing agreement
by EMPLOYEE, the provisions of this Section shall not apply solely with respect to such
confidential information lawfully obtained.
9. EMPLOYEE agrees to not make any oral or written communication to any person
or entity which has the effect of damaging the reputation of, or otherwise working in any way to
the detriment of, EMPLOYER.
10. In consideration of the terms hereof, EMPLOYEE agrees to waive any claims he
may have for employment or reemployment by EMPLOYER in the future, and further hereby
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releases and forever discharges EMPLOYER from any and all claims, demands, and liabilities
whatsoever of every name and nature with respect to EMPLOYEE’S employment, or to the
terms, conditions, or termination from his employment, which EMPLOYEE now has or has ever
had against EMPLOYER. This release shall include any claims for lost wages or benefits, stock
options, compensatory damages, punitive damages, attorneys’ fees, equitable relief, or any other
form of damages or relief.
This release shall further include, without limitation, all common law claims including
claims in contract or tort, and including, but not limited to, breach of contract, wrongful
discharge (including claims for constructive discharge), intentional or negligent infliction of
emotional distress, misrepresentation, interference with prospective economic advantage,
interference with contractual relations, defamation, negligence, or breach of the covenant of
good faith and fair dealing.
EMPLOYEE specifically releases and forever discharges EMPLOYER from any and all
claims based upon any allegation of unlawful employment discrimination under any federal,
state, or local law, regulation, or ordinance.
11. The release contained in Paragraph 10 above includes a waiver of any rights or
claims that EMPLOYEE may have or claim to have under the Age Discrimination in
Employment Act of 1967 and the Older Workers Benefits Protection Act of 1990, except that
this Agreement does not release any rights or claims under the Act that may arise after the
signing of the Agreement. The release also includes a waiver of any rights or claims that
EMPLOYEE may have or claim to have under the General Laws of Massachusetts, or under any
other state, federal, or local law, statute, public policy, order, ordinance, or regulation.
12. EMPLOYEE represents and states that he has not and will not file any complaints
or charges against EMPLOYER with any local, state or federal agency or court, for the purpose
of receiving damages on his/her own behalf.
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13. It is understood and agreed that this Agreement does not constitute an admission
by EMPLOYER or EMPLOYEE that any action either has taken was unlawful or wrongful, or
that any action constituted a breach of contract or violated any federal, state, or local law, policy,
rule or regulation.
14. EMPLOYEE agrees that this document and any and all matters concerning this
Agreement will be regarded as a privileged communication between the parties and that he will
not disseminate or release such matters by publication of any sort, in any manner or means, to
any person.
15. EMPLOYEE acknowledges that any breach by him of any of the terms of this
Agreement shall immediately relieve EMPLOYER from its obligations under Paragraph 2 above,
and EMPLOYER shall have the right to seek any other legal or equitable relief that may be
available.
16. If any of the provisions of this Agreement shall be held invalid, the remainder of
this Agreement shall not be affected thereby.
17. This Agreement contains the entire agreement between the parties, and shall be
governed by the laws of the Commonwealth of Massachusetts. This Agreement may not be
changed orally, but only by agreement in writing signed by the party against whom enforcement
of any waiver, change, modification or discharge is sought.
18. The parties attest that no other representations were made regarding this
Agreement other than those contained herein.
19. EMPLOYEE enters into this Agreement knowingly and voluntarily, and
acknowledges that he has read and understands the language of this Agreement. EMPLOYEE
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further acknowledges that he was given an opportunity to consider this Agreement and advised
to consult an attorney.
EMPLOYEE may take up to 21 days from __________, 19__ to consider, sign and return
this Agreement. In addition, EMPLOYEE may revoke the Agreement after signing and
returning it, but only by delivering a signed revocation notice to EMPLOYER, Attn.:
______________, _________, within seven days of EMPLOYEE signing and returning this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement and General Release
to be duly executed.
EMPLOYER
By _______________________ _______________Date
EMPLOYEE
_________________________ _______________Date
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EXHIBIT C
SEPARATION OF EMPLOYMENTAGREEMENT AND GENERAL RELEASE
This Separation of Employment Agreement and General Release (the
"Agreement"), is between ___________ a ____________ corporation ("Employer"), and
______________, of __________, __________, ("Employee") and is effective the ___ day of
_____, 199_.
WHEREAS, Employee has been employed by Employer in a full-time capacity
since __________ as its ____________________; and
WHEREAS, the parties hereto mutually desire to alter the terms of Employee's
employment relationship with Employer, to set forth their agreements with respect to the
prospective termination of Employee's employment, to assure the continued service of Employee
as a part-time employee over the next year, until Employee's resignation, upon the terms and
conditions hereinafter set forth, and to amicably resolve any and all issues and disputes relating
to the foregoing;
NOW, THEREFORE , in consideration of the covenants, conditions, representations and
acknowledgements contained herein, and in reliance upon the agreements and releases of each of
the parties as set forth herein, the parties, intending to be legally bound, agree as follows:
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1. Terms of Part-time Employment Relationship.
Employee agrees that beginning on ____________ __, 199_, he will become a part-time
employee of Employer, holding the position of ______________, and, in that capacity, will
perform such duties handling ___________________________________ as may be assigned
from time to time by the President of Employer and/or Employer's Board of Directors. From
_______________ __, 199_ through __________________ _, 199_, unless terminated under
paragraph 8, Employee will work _____ hours and shall be compensated at the annual rate of
$____________, subject to applicable federal, state, and local tax withholding and other
deductions required by law or authorized by Employee. During this period of time, he will
continue to receive the following employee benefits: medical and dental insurance, life
insurance, group long term disability insurance, 401(k) plan, bonus (in accordance with the terms
and conditions of Employer's corporate executive bonus plan), company car, and payment of
club and professional dues and subscriptions.
2. Termination of Employment and Officer Positions. Unless terminated earlier
pursuant to paragraph 6 of this Agreement, Employee agrees that his employment with Employer
will be terminated effective _____________ _, 199_, and he agrees to resign as of that date from
all positions that he then holds with Employer. Employee also agrees to resign from his current
officer positions of __________________________________, effective ____________ _, 199_.
3. General Release. In consideration of the promises and agreements of Employer set
forth in this Agreement, Employee, intending to be legally bound, for himself and his heirs,
executors and administrators, hereby releases and discharges Employer and its parents,
subsidiaries, affiliates, and its and their officers, directors, shareholders, employees, agents,
successors, assigns, heirs, executors, and administrators (hereinafter referred to collectively as
"Releasees") from any and all causes of action, suits, debts, claims and demands whatsoever, in
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law or in equity, which he ever had, now has, or may have in the future against Releasees by
reason of any matter, cause or thing whatsoever, including without limitation, any claims arising
from or relating in any way to his employment relationship, the alteration of the terms of his
employment relationship, or the prospective termination of his employment relationship with
Employer, including claims arising under the New Jersey Law Against Discrimination, N.J.S.A.
10:5-1 et seq.; Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §2000e et seq.;
the Age Discrimination in Employment Act, 29 U.S.C. §621 et seq.; the Americans With
Disabilities Act, 42 U.S.C. §12101; the Employee Retirement Income Security Act, 29 U.S.C.
§1001 et seq.; any common law contract or tort claims now or hereafter recognized and all
claims for counsel fees and costs, but excluding claims for breach of this Agreement.
4. Other Agreements Of Employer. In consideration of the undertakings of Employee
set forth herein, Employer agrees:
(a) to pay to Employee, by no later than _____________, 199_, any of
Employee's accrued but unused vacation benefits, including days accrued or accruable from
_________________ through _____________, with said benefits to be paid based upon an
annual salary of $___________;
(b) to extend all of Employee's non-qualified stock options, dated as of
________________, 199_, to _______________, 199_, with said options
to be exercisable by Employee or his estate during said time period;
(c) to provide Employee with life insurance benefits (only if insurable based on
commercially acceptable standards), and with medical and dental insurance benefits, for the
period from ____________, 199_ through _____________, 199_;
(d) to permit Employee to participate after ______________,199_, in Employer's
retiree health insurance plan, at his sole expense; and
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(e) set forth additional consideration in separate paragraphs.
5. Future Payments. Except as set forth specifically in or as contemplated by this
Agreement, it is expressly agreed and understood that Employer does not have, and will not
have, any obligation to provide Employee at any time in the future with any payments, benefits
or considerations.
6. Future Employment. Employee agrees and acknowledges that his continued
employment with Employer after ____________ __, 199_ shall be terminable at the will of
Employer with or without cause or notice. In the event that Employer terminates Employee's
employment prior to ______________, 199_, or in the event of Employee's death or disability
prior to _______________, 199_, it shall continue to pay Employee (or his estate) in accordance
with the provisions of paragraphs _, _, _, and _ above. Employee agrees that, after
______________ __, 199_, his employment relationship with Employer shall have been
permanently and irrevocably severed, that he will not thereafter seek future employment with
Employer, and that Employer shall have no obligation, contractual or otherwise, to rehire, recall,
or re-employ him thereafter.
7. Confidential Information. Employee acknowledges that in the course of his
employment by and service to Employer he has had, and will continue to have, access to
confidential information of Employer, including without limitation, financial statements, sales
figures, projections, estimates, promotions, contracts, pricing, purchasing methods and sources,
marketing and distribution methods, sales sheets, customer lists, literature, catalogues, designs,
specifications, bills of material, processes, software and all other information furnished by
Employer or acquired during the term of Employee's employment with Employer (hereinafter
"Confidential Information"). Employee acknowledges that such Confidential Information is a
valuable and unique asset of Employer and agrees that he will not disclose any such Confidential
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Information to any person for any reason whatsoever without the prior written authorization of
Employer unless such information is in the public domain through no fault of Employee, or
except as may be required by law. Employee also acknowledges that Employer may have
received, and may receive in the future, proprietary information from third parties ("Third-Party
Confidential Information") subject to the provisions of various confidentiality agreements, and
that Employee has had, and will have, access to such Third-Party Confidential Information.
Employee agrees that he will continue to be subject to the provisions of such confidentiality
agreements.
8. Agreement Confidential. Employee agrees that he has not communicated or
disclosed, and will not hereafter communicate or disclose, the terms of this Agreement to any
persons with the exception of members of his immediate family, his attorney and his tax
advisor(s), each of whom shall be informed of the confidential nature of this Agreement. Except
as may be necessary to carry out the terms of this Agreement, Employer will also keep the terms
of this Agreement confidential from third parties and from employees of Employer who do not
have a need to know of this Agreement. The parties will mutually agree on internal and external
announcements of the changes to take place ___________ __, 199_, and will make no other
general announcement regarding said changes.
9. Non-Disparagement. The parties agree that their professional and personal
reputations are important and should not be impaired by either party after this Agreement is
executed. Employee therefore agrees not to disparage the professional or personal reputation of
Employer, its officers, shareholders, directors, or management, and Employer agrees that it will
not disparage Employee's professional or personal reputation.
10. Non-Admission of Liability. The parties agree and acknowledge that this
Agreement is not and shall not be construed to be an admission of any violation of any federal,
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state or local statute or regulation, or of any duty owed to one party by the other, except as
contemplated by this Agreement, and that this Agreement has been entered into by the parties
solely for the purpose for providing a mutually agreeable conclusion of Employee's employment
relationship with Employer.
11. Governing Law. This Agreement shall be governed by and interpreted under the
laws of the State of ___________, without giving effect to the principles of conflicts of law
thereof.
12. Notices. All notices and other communications required or permitted hereunder or
necessary or convenient in connection herewith shall be in writing and marked confidential and
shall be deemed to have been given when hand delivered or mailed by registered or certified
mail, as follows (provided that notice of change of address shall be deemed given only when
received): If to the Company, to:
nameaddress
Attention: _____________, President and Chief Executive Officer
If to Employee, to:
nameaddress
or to such other names or addresses as Employer or Employee, as the case may be, shall
designate by notice to each other person entitled to receive notices in the manner specified
herein.
13. Contents of Agreement; Amendment and Assignment. This Agreement sets forth
the entire understanding between the parties hereto with respect to the subject matter hereof.
This Agreement may not be changed, modified, extended or terminated except upon written
amendment executed by Employee and executed on behalf of Employer by a duly authorized
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officer of Employer. Without limitation of the foregoing, Employee and Employer acknowledge
that one effect of this provision is that no oral modifications of any nature whatsoever to this
Agreement shall be permitted.
14. Covenants Not to Sue.
(a) Employee, in consideration of the promises and the covenants of Employer
set forth in this Agreement, agrees and covenants that, except as may be necessary to enforce this
Agreement or his Deferred Compensation or Stock Option Agreement, neither he, nor any
person, organization or other entity on his behalf, will file, charge, claim, sue or cause or permit
to be filed, charged, or claimed, any civil action or legal proceeding seeking personal monetary
or other relief for Employee (including any action for damages, injunctive, declaratory, monetary
or other relief) against Releasees involving any matter occurring at any time in the past up to and
including the date of this Agreement or involving any continuing effects of any acts or practices
which may have arisen or occurred prior to or on the date of this Agreement.
(b) Employer, for and in consideration of the promises and the covenants of
Employee set forth in this Agreement, agrees and covenants that, except as may be necessary to
enforce this Agreement, neither it, nor any person, organization or other entity on its behalf, will
make, file, charge, claim, sue or cause or permit to be filed, charged, or claimed, any claim or
civil action or legal proceeding (including any action for damages, injunctive, declaratory,
monetary or other relief) against Employee involving any matter occurring at any time in the past
up to and including the date of this Agreement or involving any continuing effects of any acts or
practices which may have arisen or occurred prior to or on the date of this Agreement.
15. Mutually Contingent Undertakings. The parties hereto acknowledge that the
undertakings of each of the parties herein are expressly contingent upon the fulfillment and
satisfaction of the obligations of the other party as set forth herein.
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16. Consultation With Legal Counsel; Revocation Period. Employee hereby certifies
that he has read the terms of this Agreement, that he has been advised by Employer to consult
with an attorney of his own choice prior to executing this Agreement, that he has had an
opportunity to do so, and that he understands this Agreement's terms and effects. Employee
further certifies that neither Employer nor its attorneys, agents, or representatives have made any
representations to him concerning the terms or effects of this Agreement other than those
contained herein. Employee further acknowledges that he has had the right to consider this
Agreement for a period of twenty-one (21) days prior to entering into this Agreement, and that
he has entered into this Agreement as of the effective date of his own free will. He also
understands that he has the right to revoke this Agreement for a period of seven (7) days
following the Agreement's execution by giving written notice to Employer in accordance with
the provisions of Section 12 herein. Employee further certifies that he has the intention of
releasing all claims recited herein in exchange for the consideration described herein, which he
acknowledges as adequate and satisfactory to him, and more than that to which he would be
entitled had he not entered into this Agreement.
17. Representation and Warranty. The Employer represents and warrants that it has
duly entered into this Agreement, that this Agreement has been authorized by the Board of
Directors, and is fully enforceable in accordance with its terms.
18. Transition Period. The parties will use their best efforts to assure an orderly,
effective transition between the date of the signing of this Agreement and the effective date.
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IN WITNESS WHEREOF , and intending to be legally bound hereby, the parties hereto
have executed the foregoing Separation of Employment Agreement and General Release this
______ day of ____________, 199_.
__________________________ __________________________Witness Employee
Employer
__________________________ By:________________________Witness
Title:_____________________
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EXHIBIT D
SEVERANCE AGREEMENTLetter Form
_____________, 1999
Re: Severance Agreement
Dear _____________:
This letter sets forth the terms under which the (“_______"),will provide you with severance benefits upon and following the termination of youremployment on ____________, 1999 (“Termination Date”):
1. On or before the Termination Date, you will submit a letter of resignation dated______________, 1999, and effective as of the Termination Date, in the form attached hereto asAppendix A. Your employment by _______ shall cease as of the close of business on theTermination Date. On or before the termination date, _______ will pay you for all wages owedand unused vacation accrued through the Termination Date.
2. You shall receive the following payments and benefits:
(a) _______ shall pay to you your regular base salary (with applicablewithholding and deductions), at the regular base rate in effect as of theTermination Date, through ______________. These payments shall bemade on ________ regular paydays in accordance with ________ regularpayroll practices.
(b) Your family coverage under the present _______ -provided medical planwill continue beyond the Termination Date in accordance with theMassachusetts Small Group Health Insurance Law, M.G.L. ch. 176J, § 9.
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_____ shall pay the entire premium for the first twelve months of suchcontinuation coverage. At the conclusion of this three-month period, youwill be responsible for paying the entire premium for any furthercontinuation coverage provided for under Massachusetts law.
(c) You will be permitted to continue occupancy of the premises located at__________________, as a tenant at will, at the rent of $_______ permonth, through _____________. You will vacate the premises no laterthan _____ p.m. on ______________, and you will remove your personalproperty from the premises at that date and time.
3. On or before the Termination Date, you shall return to _______ all keys, officeequipment, documents, written materials, electronic information, and other _______ property inyour possession, other than those relating to the premises at ___________________.
4. In consideration of the terms hereof, you have agreed to and do waive any claimsyou have for employment or reemployment by _______ in the future, and you have furtheragreed to and do release and forever discharge _______, its officers, directors, members,employees, and agents from any and all claims and causes of action known or unknown, arisingout of or relating to your employment by _______ or the termination thereof, including, but notlimited to, intentional or negligent infliction of emotional distress, wrongful discharge, breach ofcontract, tort, the Civil Rights Acts, Employee Retirement Income Security Act, or any otherfederal, state, or local legislation or common law relating to employment or discrimination inemployment, or otherwise. This release does not include your right to enforce the terms of thisagreement.
5. The parties agree to maintain the terms of this agreement as confidentialinformation, subject to disclosure only pursuant to the requirements of law, and provided furtherthat you may inform your immediate family and legal and financial advisors of its terms on thebasis that they shall similarly maintain the confidentiality of its terms.
6. This agreement sets forth the entire understanding of the parties and supersedesany and all prior agreements, oral or written, relating to your employment by _______ or thetermination thereof. This agreement may not be modified except by a writing, signed by you andby the President of _______. This agreement shall be binding upon your heirs and personalrepresentatives, and the successors and assigns of _______.
7. You acknowledge that before entering into this agreement you have had theopportunity to consult with any attorney or other advisor of your choice and that you have beenadvised to do so. You further acknowledge that you have entered into this agreement of yourown free will, and that no promises or representations have been made to you by any person toinduce you to enter into this agreement other than the express terms set forth herein. You furtheracknowledge that you have read this agreement and understand all of its terms.
If the foregoing is acceptable to you, please sign the enclosed copy of this agreement andreturn it to me. You may take up to 21 days from today to consider, sign and return thisagreement.
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Very truly yours,
By:
Accepted and Agreed:
Date Signed and Returned
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EXHIBIT E
COMMONWEALTH OF MASSACHUSETTSCOMMISSION AGAINST DISCRIMINATION
________________________,Complainant,
v.
________________________,Respondent.
Docket No. _____________
SETTLEMENT AGREEMENT
This Settlement Agreement is made by and between , (“the Company”), the Respondent in theabove-captioned action, and ______________, _______________________________,(“___________”), the Complainant in the above-captioned action. As used herein, “theCompany” shall also include its parent, affiliates, predecessors, successors, assigns, officers,directors, employees (including, but not limited to, _________________), shareholders, agents,attorneys, and other representatives; “________” shall also include her executors, heirs,administrators, assigns, agents, attorneys, and other representatives. As used herein, “the Parties”shall mean the Company and ________ together.
Recitations
a. __________ became an employee of the Company in __________, 19 __.
b. On or about __________, 19__, _________ commenced a disability leave of absencefrom which she has never returned. During this period, _______ has received disabilitybenefits from the Company, a long-term disability insurance policy, and Social Security.
c. On _________, 19__, ________ filed a charge with the Massachusetts CommissionAgainst Discrimination (MCAD No. ___________) and the Equal EmploymentOpportunity Commission (EEOC No. _________) alleging: two claims of sexualharassment in violation of M.G.L. ch. 151B and Title VII of the 1964 Civil Rights Act;unlawful retaliation in violation of M.G.L. ch. 151B and Title VII of the 1964 CivilRights Act; unlawful discrimination based on sex in violation of M.G.L. ch. 151B andTitle VII of the 1964 Civil Rights Act; and handicap discrimination in violation ofM.G.L. ch. 151B and the Americans With Disabilities Act.
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d. _______ and her physicians have claimed that the Company’s actions caused arecurrence and exacerbated the symptoms of her _________ disease, and caused her tobecome physically disabled from work.
e. On _________, 19__, the MCAD found that probable cause existed to credit theallegations and claims in the charge; and on _________, 19__, the MCAD dismissed asuntimely one of the claims of sexual harassment. A public hearing in the case wasscheduled to begin on _________, 19__.
f. In the course of the MCAD litigation, _______ sought to recover compensatory damagesfor her physical injuries and physical illness, as well as for emotional distress. She alsosought to recover her attorneys’ fees and costs.
g. The Company has denied the claims and allegations set forth in the charge, and hasfurther denied that its actions in any way caused or contributed to ________ allegedinjuries. The Company has also contended that it did not cause _________ to becomedisabled from work, and, alternatively, that there were intervening, superseding causes ofher disability.
h. The Parties have agreed to fully and finally resolve and settle any and all claims andcontroversies between them, including, but not limited to, all matters related to the above-referenced claims and civil litigation.
Agreement
In consideration of the mutual promises and covenants set forth herein, and without anyadmission or evidence of liability, the Parties agree as follows:
1. Following execution of this Settlement Agreement, the Parties, through their attorneys,shall execute and file with the Massachusetts Commission Against Discrimination (“theMCAD”) and the Equal Employment Opportunity Commission (“the EEOC”) a Letter ofWithdrawal with regard to all claims in MCAD Docket No. __________ and in EEOCDocket No. _________. This Letter of Withdrawal shall be in the form attached hereto asAppendix A.
2. Upon receipt of a fully executed copy of this Settlement Agreement, the Company shallpay to _______ the total amount of ________________________ Dollars($________), in full and final settlement of her claims in MCAD Docket No.___________ and EEOC Docket No. ___________, to be allocated as follows:
a. _____________________ Dollars ($__________) shall be damages received onaccount of _________'s alleged aggravation of his/her ________ disease andrelated illnesses and suffering.
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b. _____________________ Dollars ($___________) shall be damages received onaccount of ________'s alleged past and future medical expenses related to thealleged aggravation of his/her ______ disease and related illnesses and suffering.
c. Of the amounts specified in Sub-Paragraphs 2(a) and (b) above,______________________ Dollars ($__________) shall be for legal fees andexpenses attributable to the damages received on account of _________ allegedaggravation of his/her _______ disease and related illnesses and suffering.
d. _________________ Dollars ($_________) shall be damages received on accountof __________'s alleged lost wages.
e. Of the amount specified in Sub-Paragraph 2(d) above, ____________________________ Dollars ($_________) shall be for legal fees and expensesattributable to said damages attributable to the damages received on account of__________'s alleged lost wages.
The above allocation represents the parties’ good faith efforts to properly characterize thesettlement amounts. The parties agree that _________ shall be responsible for thepayment of all applicable federal, state and local taxes on these payments, as well as anycosts, fines or penalties incurred as a result of the failure to pay such taxes. __________agrees to hold the Company harmless for any federal or state tax obligation in connectionwith this payment and to indemnify the Company for any taxes, costs, fines or penaltiesthat may be assessed as a result of these payments.
3. The settlement monies described in Paragraph 2 above shall be paid in the followingmanner: (i) a check for _______________ Dollars ($________) shall be made payable to______________, Esq.; (ii) a check for ___________________ Dollars ($___________)shall be made payable to ________________; and (iii) a check for _________________Dollars ($________), less applicable federal and state withholding, shall be made payableto ______________.
4. ___________ hereby remises, releases, and forever discharges the Company of and fromany and all manners of actions, causes of action, suits, debts, controversies, damages,judgments, claims, demands, and liabilities whatsoever, in law or in equity, of everyname and nature, which __________ now has or has ever had against the Company. Thisrelease specifically includes, but is not limited to, any matter or thing arising out of orconnected with MCAD Docket No. ____________ and EEOC Docket No. __________.This release shall include any claims for lost wages or benefits, compensatory damages,punitive damages, attorney’s fees, emotional distress damages, equitable relief, or anyother form of damages or relief. This release shall further include, without limitation, allcommon-law claims including claims in contract or tort, and all claims based upon anyallegation of unlawful employment discrimination under state or federal law.
5. _________ represents and agrees that her employment relationship with the Companyshall terminate with the execution of this Agreement, and that she will not be reemployedby the Company or apply for or otherwise seek employment with the Company at any
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time. The Company agrees that _________ will be considered as having voluntarily leftthe Company and not to have been terminated for poor work performance or any otherreason. The Company shall respond to any inquiries regarding _________’s employmentby providing only information as to _________’s job title, dates of employment, andsalary. This release shall not in any way affect _________’s rights or obligations as aparticipant in or beneficiary of the Company’s group long-term disability plan or theCompany’s health benefit plan for people on the Company’s long-term disability plan, asher rights are determined solely by the terms and conditions of these plans and policies asthey may be in effect from time-to-time.
6. It is understood and agreed that this Settlement Agreement is a compromise of disputedclaims. It is not to be construed as an admission of liability on the part of the Companythat any action it has taken was unlawful or wrongful, or that any action violated anyfederal, state, or local law, policy, rule, or regulation, and it is intended to finally resolveall claims and controversies made in or arising out of the litigation.
7. It is agreed that this document and any and all matters concerning this SettlementAgreement will be regarded as a confidential and privileged communication between theParties thereto and that _________ will not disseminate or release such matters bypublication of any sort, in any manner or means, to any person, other than his/herimmediate families, attorneys, and accountants; provided that this confidentialityprovision shall not be construed to prohibit any disclosure required by law and providedfurther that communications and disclosures made in response to specific inquiries by theMCAD or the EEOC shall not be prohibited.
8. The Parties agree that this Settlement Agreement contains the entire agreement betweenthe Parties, and that its terms are contractual and supersede all prior agreements andunderstandings, whether oral or written, between the Parties.
9. The Parties further agree that this Settlement Agreement shall be construed in accordancewith the laws of the Commonwealth of Massachusetts and that if any provision of thisAgreement shall for any reason be held invalid or unenforceable, such invalidity orunenforceability shall not affect any other provision of this Settlement Agreement, butthat it shall be construed as if the invalid or unenforceable provision had never beencontained in this Settlement Agreement.
10. This Settlement Agreement may not be changed orally, but only by agreement in writingsigned by the party against whom enforcement of any waiver, change, modification, ordischarge is sought.
11. _________ declares, represents, and agrees that she enters into this SettlementAgreement knowingly and voluntarily upon the advice of counsel. ________ furtheracknowledges that she has read and that she understands the language of this SettlementAgreement, and that she was given a reasonable period of time to consider the SettlementAgreement.
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IN WITNESS WHEREOF, the Parties hereto have caused this Settlement Agreement tobe duly executed.
Date
By: Date
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Appendix A
[Date]
Massachusetts Commission Against DiscriminationOne Ashburton Place, Room 601Boston, MA 02108
Equal Employment Opportunity Commission10 Congress Street, Room 1001Boston, MA 02114
Re:
To Whom It May Concern:
Please withdraw my above-referenced charges of discrimination. With the advice ofcounsel, I have reached a good-faith settlement with the Respondent in the above-referencedmatters. This settlement is contingent upon the withdrawal of the above-referenced chargesagainst the Respondent.
Thank you.
Sincerely,
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EXHIBIT F
COMMONWEALTH OF MASSACHUSETTS
MIDDLESEX COUNTY, ss. SUPERIOR COURT DEPARTMENT
________________________,Plaintiff,
v.
________________________,Defendant.
C.A. No. __________
SETTLEMENT AGREEMENT
This Settlement Agreement is made by and between __________________,__________________________ (“______”), and ______________, ______________________________ (“_________”). As used herein, “______” shall also include its affiliates,predecessors, successors, assigns, officers, directors, shareholders, attorneys, and agents;“________” shall also include her executors, heirs, administrators, assigns, attorneys, agents, andother representatives. As used herein, “the parties” shall mean ________ and ________ together.
WHEREAS, the parties have voluntarily agreed that the above-captioned matter shouldbe resolved through settlement;
WHEREAS, _______ was terminated from her employment with _______ _______effective ________, 19__;
WHEREAS, on or about _________, 19__, ______ filed a charge alleging unlawfuldiscrimination based upon sex with the Massachusetts Commission Against Discrimination(MCAD No. __________) and the Equal Employment Opportunity Commission (EEOC No._________);
WHEREAS, on or about ________, 19__, the Massachusetts Commission AgainstDiscrimination issued a lack-of-probable-cause finding; and on or about ________ 19__, -_______ obtained a right-to-sue letter from the Equal Employment Opportunity Commissionwith regard to EEOC No. _________ for the purpose of filing a civil action in the same matter incourt;
WHEREAS, on or about __________ 19__, ______ filed a civil action in MassachusettsSuperior Court against _______, Civil Action No. _______, wherein she alleged the followingcauses of action against ______: (i) sex discrimination in violation of M.G.L. ch. 151B, (ii)
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violation of the Massachusetts Comparable Pay Act, M.G.L. ch. 149, § 105A–C, (iii) violation ofthe Massachusetts Equal Rights Act, M.G.L. ch. 93, § 102, and (iv) violation of the MaternityLeave Act, M.G.L. ch. 149, § 105D; and
WHEREAS, ______ and ______ now wish to fully and finally resolve and settle any andall claims and controversies between them, including, but not limited to, all matters related to theabove-referenced claims and civil litigation:
NOW, THEREFORE, in consideration of the mutual promises and covenants set forthherein, and without any admission or evidence of liability, _____ and ______ agree as follows:
1. Following execution of this Settlement Agreement, the parties, through their attorneys,shall execute and file with the Court a Stipulation of Dismissal with Prejudice andWithout Costs with regard to all claims in Civil Action No. ______. This Stipulation shallbe in the form attached hereto as Exhibit A.
2. Upon receipt of a fully executed copy of this Settlement Agreement, _______ shall pay to_______, by check payable to __________ and his/her attorney ____________, in theamount of ________________ dollars ($_______ ), for alleged compensatory damagesunder M.G.L. ch. 151B as set forth in his/her claims in MCAD No. ___________, EEOCNo. ___________, and Civil Action No. ________. ________ makes no representationabout the tax consequences of its payment to ______, and _______ agrees to hold ______harmless for any obligation in connection with this payment and to indemnify ______ forany costs, fines, or penalties that may be assessed as a result of this payment.
3. _______ hereby remises, releases, and forever discharges _______ of and from any andall manners of action and actions, cause and causes of action, suits, debts, controversies,damages, judgments, claims, demands, and liabilities whatsoever, in law or in equity, ofevery name and nature with respect to her employment or the termination of heremployment, which ______ now has or has ever had against ______. This releasespecifically includes, but is not limited to, any matter or thing arising out of or connectedwith MCAD No. __________, EEOC No. __________, and Civil Action No. _________,including, but not limited to, her claims under M.G.L. ch. 151B; M.G.L. ch. 149,§ 105A–C; M.G.L. ch. 93, § 102; and M.G.L. ch. 149, § 105D. This release shall includeany claims for compensatory damages, punitive damages, attorney’s fees, emotionaldistress damages, lost wages or benefits, equitable relief, or any other form of damages orrelief. This release shall further include, without limitation, all common-law claimsincluding claims in contract or tort, and including, but not limited to, wrongful discharge(including claims for constructive discharge), infliction of emotional distress, sexdiscrimination, and retaliatory discharge. _________ specifically releases and foreverdischarges ________ from any and all claims based upon any allegation of unlawfulemployment discrimination under state or federal law.
4. _______ represents and agrees that her employment with _______ terminated effective________; that she will not be reemployed by ______; and that she will not apply for orotherwise seek employment with ______ at any time.
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5. ______ represents and states that, other than the aforementioned charges, she has not andwill not file any complaints or charges against _______ with any local, state, or federalagency or court relative to any matter occurring prior to the execution of this Agreement,and _______ agrees that if any complaint or charge is filed on his/her behalf she will takeall reasonable steps necessary to effectuate the withdrawal of such complaint or charge.
6. It is understood and agreed that this Settlement Agreement is a compromise of disputedclaims. It is not to be construed as an admission of liability on the part of _______ thatany action it has taken was unlawful or wrongful, or that any action violated any federal,state, or local law, policy, rule, or regulation, and it is intended to finally resolve allclaims and controversies made in or arising out of the litigation.
7. It is agreed that this document and any and all matters concerning this SettlementAgreement will be regarded as a confidential and privileged communication between theparties thereto and that _______ will not disseminate or release such matters bypublication of any sort, in any manner or means, to any person, other than their attorneysand accountants; provided that this confidentiality provision shall not be construed toprohibit any disclosure required by law. Dissemination or release of any matter noted inthis document without the consent of the other party shall mean that the amounts payableunder Paragraph 2 above shall be returned to ________.
8. The parties agree that this Settlement Agreement contains the entire agreement betweenthe parties, and that its terms are contractual and supersede all prior agreements andunderstandings, whether oral or written, between the parties.
9. The parties further agree that this Settlement Agreement shall be construed in accordancewith the laws of the Commonwealth of Massachusetts and that if any provision of thisAgreement shall for any reason be held invalid or unenforceable, such invalidity orunenforceability shall not affect any other provision of this Settlement Agreement, butthat it shall be construed as if the invalid or unenforceable provision had never beencontained in this Settlement Agreement.
10. This Settlement Agreement may not be changed orally, but only by agreement in writingsigned by the party against whom enforcement of any waiver, change, modification, ordischarge is sought.
11. _________ declares, represents and agrees that she enters into this Settlement Agreementknowingly and voluntarily upon the advice of counsel. _______ further acknowledgesthat she has read and that she understands the language of this Settlement Agreement, andthat he/she was given a reasonable period of time to consider the Settlement Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Settlement Agreement to be dulyexecuted.
Date
By:
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Exhibit A
COMMONWEALTH OF MASSACHUSETTS
MIDDLESEX COUNTY, ss. SUPERIOR COURT DEPARTMENT
________________________,Plaintiff,
v.
________________________,Defendant.
C.A. No. __________
STIPULATION OF DISMISSAL WITH PREJUDICE AND WITHOUT COSTS
Pursuant to Rule 41(a)(1)(ii) of the Massachusetts Rules of Civil Procedure, Plaintiff
_____________ and Defendant ________________, hereby stipulate to the dismissal, with
prejudice and without costs, of all claims in the above-referenced case.
Attorney for Plaintiff Attorney for Defendant
Plaintiff
[Date]