Settlement makes up a major part of federal employment law practice. In fact, most disputes in our field settle – whether they initiate as grievances, EEO complaints or as appeals of agency disciplinary action – before they ever get to hearing.
Settlement happens. A lot. Yet somehow, this is a topic that doesn’t get a lot of love in the training world. Many of us think we know how to settle, but few of us are actually ever trained in the skills required to negotiate settlement agreements. Settlement Skills is certainly not a mandatory class in law school, and no agency or union that we know of requires its reps to complete training in settlement negotiations or ADR.
There are several considerations to make when determining whether your case is one that’s prime for a settlement offer.
First, both sides have to be willing to settle. If you approach the employee (or, for employee reps, if you approach the agency) and they are not willing to discuss settlement, you’re probably done right there. You can always ask again, and as most of you know, the AJs at MSPB and EEOC are going to ask about the possibility of settlement at just about every phase of the process, but if one side says no, you can’t force settlement on them.
Second, you should consider the conditions that will be included in the settlement agreement. Will there be an admission of fault or liability? Is an apology required? Will there be a reference clause or a confidentiality clause? No two settlements are exactly alike, and some fairly creative arrangements might be upheld. One of my favorite settlement stories occurred in David Hasselhoff’s 2008 divorce settlement: he got to keep total possession of the nickname “Hoff” and the catchphrase “Don’t Hassle the Hoff.”
Third, there must be valid consideration. For those of you who didn’t go to law school (or for those of you who remain scarred from Contracts), consideration is a bargained-for exchange and in the context of settlement it means that each party has to do something to its detriment as part of the agreement – something that it isn’t already obligated to do. Valid consideration might be something like the reassignment of a supervisor, or allowing an employee to swap work shifts. An agency offering to treat a complainant with “dignity and respect,” and “not to retaliate,” however, is not valid consideration; the EEOC said the agency was already supposed to be doing that for all employees. Dubois v. Social Security Administration, EEOC Request No. 05950808 (1997).
Fourth (and last for today), the agreement must be enforceable. The agreement must be signed by someone with the authority to make the decisions held therein, and the agency and employee must have the ability to comply with the terms. Included in the enforceability requirement is a “meeting of the minds” where all parties involved know what they’re agreeing to. Without that, the settlement agreement is not valid.
Just last week I was talking with an agency representative who is a former prosecutor, and she said, “Settlement just doesn’t feel right. It’s like saying the employee did nothing wrong and the agency is at fault.” That’s a common misconception, but it’s not actually grounded in truth; settlement has no direct tie to liability or admissions of wrongdoing. Even if it goes against your gut to consider settlement, keep in mind it’s not just about “guilt and innocence.” Plus, even when an agency wins an appeal, it’s going to cost the agency. A successful defense averages about $100,000 at MSPB. We’re not sure how much is costs for an agency to win at EEOC, but a number of those complaints are unresolved for years, so we know it’s not cheap.
As a result of interest in this topic, we at FELTG are creating a brand new open enrollment program on Settlement, Mediation, ADR and other ways to resolve disputes without litigation. The program will be held in Washington, DC October 31 – November 4, and we’ll have details for you, including an official program name, very soon. Hopkins@FELTG.com