THE APPARENT SETTLEMENT THAT WASN’T

In a recent en banc decision, the District of Columbia Court of Appeals found that the attorney representing the plaintiff in an employment case had the authority to negotiate on his client’s behalf but did not have the actual or apparent authority to enter into a final settlement agreement.

The simplified facts are these: Plaintiff was terminated and the attorney represented her in an administrative appeal before the EEOC and in a court action. In the lawsuit she was ordered to mediation before a magistrate judge who agreed she could appear by telephone. During the negotiations with the employer, her attorney called her a couple of times and brought new offers to the employer. At the end he spoke to her for about half an hour and came back into the room to shake hands. Her attorney drafted the final settlement document and Plaintiff refused to sign it. The court looked at both a lawyer’s ethical responsibilities and general agency law before concluding that the employer did not have reasonable grounds to believe Plaintiff’s attorney had even apparent authority (which the trial judge had found) to agree to the settlement.

The lesson here is that a party who does not appear in person at a mediation should be required to personally affirm consent to the settlement by telephone or in writing prior to the conclusion of the mediation. The case is worth reading all the way through the concurring opinion. Matkins v District of Columbia, 2004 WL 2471504(D.C.) Decided Nov. 4, 2004 (as yet not released for publication).

FMCS "ACCESS TO NEUTRAL" INITIATIVE TERMINATED FOR BUDGETARY REASONS 

WASHINGTON, DC– The Federal Mediation and Conciliation Service (FMCS) today announced that the development of the agency’s “Access to Neutrals” Initiative has been permanently discontinued because funds are not available to support the program.

In announcing a halt to the initiative, FMCS Director Peter J. Hurtgen said that because other organizations also maintain registries of neutrals, the program would have duplicated already existing services.

“For these reasons, it was decided that the Acces! s to Neutrals Initiative did not represent the best allocation of our limited resources,” Hurtgen said. “We found that we did not have the funds to develop it as we intended, and upon review, we saw that other organizations offered similar services.”

The FMCS Director praised the work of Peggy McNeive, Acting Director of the Access to Neutrals Initiative, in handling the public liaison for the initiative as well as its internal, agency development. In her role, McNeive reviewed comments received by the agency on the neutrals initiative from interested parties, and she convened a series of meetings with organizations to discuss proposed regulations and recommendations regarding the initiative. “Peggy provided the foundation that allowed us to evaluate the potential for the program,” Hurtgen said. “She did an outstanding job.”

FMCS had envisioned operating a registry of qualified professional neutrals that would have been available to the public to cond! uct workplace alternative dispute resolution (ADR) processes. The agency acted in March to place the initiative on “temporary hold” because of budgetary constraints that were perceived at that time.

The Federal Mediation and Conciliation Service, created in 1947, is an independent U.S. government agency whose mission is to preserve and promote labor-management peace and cooperation. Headquartered in Washington, DC, with 10 district offices and more than 70 field offices, the agency provides mediation and conflict resolution services to industry, government agencies and communities.

AMERICAN JOBS CREATION ACT of 2004

On October 22, 2004 the President of the United States signed the American Jobs Creation Act of 2004. Included in its many provisions is Section 703 regarding the tax treatment of costs and attorney fees in employment discrimination, retaliation, whistleblower and other employment cases, whether by settlement or judgment.

This section creates an above-the-line deduction for attorney fees and costs. Fees and costs will no longer be subject to the Alternative Minimum Tax or the “two percent of adjusted gross income” exclusion. There is a limit of the employee’s gross income for the taxable year.

The bill applies to a wide variety of civil rights and employment statutes, including Title VII, the ADA, the ADEA, the NLRA, the FLSA, the Rehabilitation Act, sec. 510 of ERISA, Title IX, the Employee Polygraph Protection Act, WARN, the FMLA, USERRA, Section 1981, 1983 and 1985, the Fair Housing Act of 1968, Federal whistleblower claims, and a catch-all clause: "Any provision of Federal, State, or local law, or common law claims permitted under Federal, state, or local law--(i) providing for the enforcement of civil rights, or (ii) regulating any aspect of the employment relationship. . . "

This provision is doubly prospective: "The amendments made by this section shall apply to fees and costs paid after the date of enactment of this Act with respect to any judgment or settlement occurring after such date."

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