Martina Beverly sued her former employer, Abbott
Laboratories for employment discrimination and retaliation, raising ADA and
national origin claims. The parties agreed to private mediation.
During a private mediation, the parties signed a handwritten
agreement stating that Beverly demanded $210,000 and mediation costs in
exchange for dismissing the lawsuit. Abbott later accepted Beverly's demand and
circulated a more formal settlement proposal. After Beverly refused to execute
this draft proposal, Abbott moved to enforce the original handwritten
agreement.
Before the mediation, Abbott sent a 6 page typewritten
template as a proposed basis for settlement.
The mediation lasted 14 hours. Both sides were represented
by counsel. Near the end of the mediation, the parties and counsel signed a
HANDWRITTEN agreement which stated:
I Jon Klinghoffer will commit that my client will
communicate to its internal business client the fact that Abbott/AbbVie has offered $200,000 + Abbott/AbbVie pays cost
of mediation to resolve this matter and that Martina Beverly has demanded
$210,000 + Abbott/AbbVie pays cost of mediation to resolve this matter. Both
parties committ [sic] that their offer and demand will remain open until
Tuesday, July 22, 2014, 3:00 PM central.
The next day, Abbott's counsel emailed Beverly's counsel
stating, "My client has accepted Martina Beverly's demand to resolve her
claims in the above referenced matter for $210,000 plus the costs of yesterday's
mediation. I have attached a draft settlement agreement for your review."
Finished? No. Beverly declined to sign Abbott's document.
Abbott filed a motion to enforce the one paragraph
handwritten agreement. The court The district court granted Abbott's motion,
finding that the parties had entered into a binding settlement agreement that
included all material terms—specifically, the dismissal of the case in exchange
for $210,000 and mediation costs.
Plaintiff Beverly appealed. The 7th Circuit Court of Appeals
found that the handwritten agreement was sufficient to define the parties
intentions. The absence of other terms from the typewritten proposal (e.g.,
specifically, provisions relating to indemnification, future cooperation
between the parties, Beverly's future employment options with Abbott, the
precise allocation of settlement funds, and express language concerning release
and waiver) did not undermine the conclusion that the single handwritten
paragraph embodied all needed material terms.
So what should one do to avoid such post-mediation disputes?
I note that a simple sentence ("This is a partial agreement, not effective
until embodied in a final text") would have avoided the dispute. Perhaps
the 14 hours of mediation had so tired the participants that they were happy
they could agree at least on the dollar amount, and, for the moment, all the
rest didn't matter. Taking a few breaths
before leaving the room might have permitted them to reread the handwritten
paragraph to be sure it said what they meant.
The court suggests recording communications related to any
final agreements.
It bears mentioning that a transcript (or some other
recording) of the private mediation session here may have provided important
clarity regarding the parties' beliefs and intentions relating to the
handwritten agreement and the draft proposal. We encourage future litigants to
record any communications that directly relate to final settlement agreements.
Beverly v. Abbott Labs., 2016 U.S. App. LEXIS 4799 (7th Cir.,
Mar. 16, 2016).