20-3632-cv

Murphy v. Inst. of Int’l Educ.

United States Court of Appeals

For the Second Circuit

August Term 2021

Argued: December 8, 2021

Decided: April 26, 2022

No. 20-3632-cv

PHILANA MURPHY,

Plaintiff-Appellant,

v.

INSTITUTE OF INTERNATIONAL EDUCATION,

Defendant-Appellee.

Appeal from the United States District Court

for the Southern District of New York

No. 19-cv-1528, Andrew L. Carter, Judge.

Before: CARNEY, SULLIVAN, and MENASHI Circuit Judges.

Plaintiff Philana Murphy, proceeding pro se, sued her employer, the 

Institute of International Education, for discrimination in violation of federal, 

state, and local, employment law. The district court (Carter, J.) referred the matter 

to the Southern District of New York’s mediation program and appointed pro 

bono counsel for Murphy. At the conclusion of the mediation, the parties reached 
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an agreement to settle the case. The parties committed that agreement to writing, 

signed it, had their counsel sign it, and had the mediator sign it. In addition to 

setting forth the material terms of the settlement, the mediation agreement stated 

that a more formal settlement agreement would follow. The week after the 

mediation, Murphy contacted the district court seeking to revoke her acceptance 

of the mediation agreement and to continue the litigation. The Institute then 

moved to enforce the mediation agreement. The district court, over Murphy’s 

objection, enforced the mediation agreement and entered judgment in favor of the 

Institute.

On appeal, we must decide whether the mediation agreement was a 

preliminary agreement that bound the parties to its terms or merely an agreement 

to continue negotiating in good faith. Based on the text of the mediation 

agreement and its context, we conclude that the mediation agreement bound the 

parties to its terms. We also reject Murphy’s alternative argument that the 

agreement was voidable because she signed it under duress. We therefore 

AFFIRM the judgment of the district court.

AFFIRMED

G. OLIVER KOPPELL (Daniel F. Schreck, on the 

brief), Law Offices of G. Oliver Koppell & 

Associates, New York, NY, for PlaintiffAppellant.

DANIEL J. LAROSE (John P. Keil, on the brief), 

Collazo & Keil LLP, New York, NY, for 

Defendant-Appellee.

RICHARD J. SULLIVAN, Circuit Judge:

Plaintiff-Appellant Philana Murphy appeals a judgment of the district court 

(Carter, J.) enforcing the settlement agreement Murphy entered into with 

Defendant-Appellee the Institute of International Education (the “Institute”) 

following a mediation in the district court’s mediation program. On appeal, 
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Murphy argues that the mediation agreement is not a preliminary agreement that 

binds her to its terms. Because we hold that the terms of mediation agreements 

like this one are enforceable and that Murphy did not enter into the agreement 

under duress, we affirm the judgment of the district court.

I. BACKGROUND

In February 2019, Murphy, proceeding pro se, filed a complaint against her 

employer, the Institute, alleging unlawful employment discrimination in violation 

of federal, state, and local, employment law. Shortly thereafter, the district court 

referred the case to the Southern District of New York’s mediation program and 

appointed pro bono counsel to represent Murphy in that mediation. 

At the conclusion of the mediation, the parties advised the mediator that 

they had settled the dispute, and the parties executed a document that included 

the case caption and was titled “Mediation Agreement.” The body of the 

agreement begins with a pre-printed sentence: “IT IS HEREBY AGREED by and 

between the parties and/or their respective counsel that, following mediation, 

agreement has been reached on all issues.” App’x at 42. Below that sentence, the 

parties hand-wrote:

In exchange for a discontinuance with prejudice of the 

instant action and a general release for all claims that 
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have been brought or could have been brought by 

Plaintiff against Defendant (and any employees, agents 

or entities thereof), Defendant will furnish to Plaintiff:

(1) One year’s worth of salary as of 8/16/19

(2) Two months[’] worth of COBRA premium 

contributions; and 

(3) Regular pay and benefit[s] until August 23, 

2019.

A full settlement agreement w/ applicable releases will 

follow.

Id. The parties and their attorneys signed the mediation agreement, as did the 

mediator. In light of the agreement, the district court entered an order dismissing 

the case the following week. 

Following the mediation, Murphy’s counsel and the Institute’s counsel 

negotiated a more comprehensive settlement agreement. The full agreement 

included several additional provisions, including the Institute’s disclaimer of any 

liability; Murphy’s agreement not to seek employment with the Institute or any of 

its affiliates; Murphy’s obligation to maintain confidentiality of the agreement’s 

terms, her acknowledgment that confidentiality “is a material term of the 

Agreement,” and her agreement to return 20% of the settlement amount if she 

were to violate the confidentiality provision; Murphy’s commitment not to 

disparage the Institute or its affiliates; the Institute’s agreement to provide a 

neutral reference; and Murphy’s agreement not to assist anyone else in pressing 
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claims against the Institute or its affiliates. App’x at 45–55. The full agreement 

also contains a number of general provisions addressing matters such as contract 

integration and interpretation. 

Three days after signing the mediation agreement, Murphy called the 

district court and expressed a desire to revoke the mediation agreement. Murphy 

was told to send an email to the court, which she did three days later. In that 

email, Murphy said that she was nervous and confused during the mediation and 

that she told her attorney that she was not comfortable signing the mediation 

agreement. She also said that she called her mother, and her mother told her not 

to sign the mediation agreement. Murphy wrote that her attorney advised her that 

mediation “was the nicer portion of [her] lawsuit” and that the mediator told her 

that if she continued, she “would be stuck in a room filled with white men that 

would question every aspect of [her] life for hours,” the thought of which Murphy 

found intimidating. App’x at 44. Murphy said that she then took ten minutes 

outside the room to clear her head and that when she came back, she asked if she 

could have until Monday to think over the mediation agreement. According to 

Murphy, she was told no and that the mediation agreement included the most 

compensation she would ever receive. Ultimately, Murphy said, she signed the 
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mediation agreement because she “was so sad and felt [she] had no choice but to 

sign.” Id.

After Murphy refused to sign the full agreement, the Institute filed a motion 

to enforce the mediation agreement, which the district court referred to Magistrate 

Judge Cave for Report and Recommendation. Over Murphy’s objections, the 

district court eventually adopted the Report and Recommendation to enforce the 

mediation agreement, and entered a judgment in favor of the Institute. Murphy 

timely appealed. 

II. DISCUSSION

We review the district court’s findings of fact for clear error and its 

conclusions of law de novo. Ciaramella v. Reader’s Dig. Ass'n, Inc., 131 F.3d 320, 322 

(2d Cir. 1997). “It is well established that settlement agreements are contracts and 

must therefore be construed according to general principles of contract law.” 

Collins v. Harrison-Bode, 303 F.3d 429, 433 (2d Cir. 2002) (internal quotation marks 

omitted). Whether a binding agreement exists is a question of law. See Vacold 

LLC v. Cerami, 545 F.3d 114, 123 (2d Cir. 2008).

A. The Mediation Agreement Bound the Parties to its Terms

In Teachers Insurance and Annuity Association of America v. Tribune Co., 670 F. 

Supp. 491 (S.D.N.Y. 1987), Judge Leval – then on the district court – described two 
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kinds of preliminary contracts that are recognized under New York law. The first 

(Type I) “occurs when the parties have reached complete agreement (including the 

agreement to be bound) on all the issues perceived to require negotiation.” Id. at 

498. This kind of agreement is preliminary “only in the sense that the parties desire 

a more elaborate formalization of the agreement,” which, although not necessary, 

is desirable. Id. The second (Type II) “is one that expresses mutual commitment 

to a contract on agreed major terms, while recognizing the existence of open terms 

that remain to be negotiated.” Id. In the second type of preliminary agreement, 

the parties “bind themselves to a concededly incomplete agreement in the sense 

that they accept a mutual commitment to negotiate together in good faith in an 

effort to reach final agreement within the scope that has been settled in the 

preliminary agreement.” Id. While a party cannot demand performance under a 

Type II agreement, a party may demand “that his counterparty negotiate the open 

terms in good faith toward a final contract incorporating the agreed terms.” Id. 

We subsequently adopted this framework for analyzing preliminary agreements 

in Arcadian Phosphates, Inc. v. Arcadian Corp., 884 F.2d 69, 71–73 (2d Cir. 1989), and 

we continue to apply this framework today, see Vacold, 545 F.3d at 124–29.
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Previously, we have referred to the four factors articulated in Winston v. 

Mediafare Entertainment Corp., 777 F.2d 78, 80–81 (2d Cir. 1985), when determining 

whether something constitutes a Type I agreement. See Adjustrite Sys., Inc. v. GAB 

Business Servs., Inc., 145 F.3d 543, 549 (2d Cir. 1998). And we have referred to a 

modified five-factor version of that test when considering whether something is a 

Type II agreement. See Arcadian, 884 F.2d at 72. But while we have said that “these 

factors help us identify categories of facts that are often useful in resolving 

disputes of this sort,” we have made it clear that “they do not provide us with a 

talismanic scorecard.” Vacold, 545 F.3d at 125. Indeed, from the start we have 

acknowledged that some of these factors may be disregarded when not relevant 

or helpful to our analysis. See Arcadian, 884 F.2d at 72 (“In applying the Tribune 

test to this case, we need look no further than the first factor.”); see also Vacold, 545 

F.3d at 124–25. In other words, while these factors may be helpful, “the ultimate 

issue, as always, is the intent of the parties: whether the parties intended to be 

bound, and if so, to what extent.” Vacold, 545 F.3d at 125 (internal quotation marks 

omitted). For that reason, while the “existence of open terms ‘is always a factor 

tending against the conclusion that the parties have reached a binding agreement,’ 

... if the parties intended to be bound despite the presence of open terms, ‘courts 
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should not frustrate their achieving that objective or disappoint legitimately 

bargained contract expectations.’” Id. at 128 (quoting Tribune, 670 F. Supp. at 499).

Here, we are confronted with a written agreement that has been executed. 

Unlike in Winston, where the key issue was “whether the parties intended to be 

bound,” Winston, 777 F.2d at 80, the question instead is what kind of agreement 

did the parties make. While we have a body of law distinguishing non-binding 

agreements from Type I agreements and non-binding agreements from Type II 

agreements, we have had fewer occasions to explain how courts should 

distinguish between Type I and Type II agreements when confronted with an 

agreement that is clearly binding in some sense. 

In differentiating between Type I and Type II agreements, we are mindful 

of the twin concerns Judge Leval articulated in Tribune. On the one hand, courts 

ought “to avoid trapping parties in surprise contractual obligations.” Tribune, 670 

F. Supp. at 497. On the other hand, “it is equally important that courts enforce and 

preserve agreements that were intended as binding, despite a need for further 

documentation or further negotiation.” Id. at 498. While “[t]here is a strong 

presumption against finding binding obligation in agreements which include 

open terms, call for future approvals[,] and expressly anticipate future preparation 
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and execution of contract documents,” Arcadian, 884 F.2d at 73 (quoting Tribune, 

670 F. Supp. at 499), that presumption can be overcome and “courts should not 

frustrate [parties] achieving [their] objective[s] or disappoint legitimately 

bargained contract expectations,” Vacold 545 F.3d at 128 (quoting Tribune, 670 

F. Supp. at 499). 

We start with the text of the agreement, which is the most important 

consideration when determining how the parties intended to be bound. See id. at 

125; Brown, 420 F.3d at 154; Arcadian, 884 F.2d at 72. The mediation agreement 

clearly states that “agreement has been reached on all issues,” which is strong 

language indicating this is a Type I agreement. App’x at 42. This is not a case in 

which the language of the agreement merely committed the parties to “work 

together in accordance with the terms and conditions outlined in” the agreement, 

which would be a Type II agreement to continue negotiating. Brown, 420 F.3d at 

158 (internal quotation marks omitted). And while this language was pre-printed, 

the parties could have crossed it out if they did not intend to acknowledge that 

agreement on all issues had been reached or they could have added language in 

the handwritten portion of the mediation agreement reserving the right not to be 

bound by the mediation agreement’s terms until the final agreement was drafted 
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and signed. See Tribune, 670 F. Supp. at 499. For example, the memorandum in 

Arcadian was not a Type I agreement because it explicitly referenced the possibility 

that the negotiations would fail and stated that a binding agreement would be 

completed at a future date. See Arcadian 884 F.2d at 72; see also Adjustrite, 145 F.3d 

at 550 (holding that an agreement was not a Type I agreement because it was 

“expressly contingent” on the execution of future contracts). Here, the language 

of the mediation agreement is unequivocal and so strongly indicates that this is a 

Type I agreement.

Similarly, the language of the mediation agreement reflects that the terms 

included in the agreement were the material terms. Although the mediation 

agreement clearly contemplates a final contract that “would include additional 

boilerplate,” that does not prevent us from finding a Type I agreement so long as 

the parties “foresaw no disputes relating to the boilerplate.” Vacold, 545 F.3d at 

129 (internal quotation marks omitted). A Type I agreement, by definition, 

contemplates a future formalization that will likely include some additional terms. 

See Tribune, 670 F. Supp. at 498. But as long as “there were no issues outstanding 

that were perceived by the parties as requiring negotiation,” trivial open issues 

will not prevent the court from upholding a Type I agreement. Shann v. Dunk, 84 
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F.3d 73, 82 (2d Cir. 1996). In point of fact, parties can choose to be bound “despite 

the presence of open terms.” Vacold, 545 F.3d at 128. Here, Murphy received one 

year’s worth of salary, two months’ worth of COBRA premium contributions, and 

regular pay and benefits until August 23, 2019 “[i]n exchange” for settling her suit. 

App’x at 42. Both the language of the mediation agreement and the record indicate 

that these were the material terms that the parties needed to negotiate in the 

mediation. See Vacold, 545 F.3d at 128–29.

To be sure, the full agreement contained terms that were not in the 

mediation agreement, including a confidentiality provision identified as material. 

But there is no evidence – either in the text of the mediation agreement or the 

record – to suggest that those new terms were considered open issues in need of 

negotiation at the time the parties entered into the mediation agreement, which is 

the proper frame of reference. And a party cannot reopen a deal by proposing 

additional terms at a later date. Of course, Murphy cannot be bound by those 

additional terms because she never agreed to them. But she can be bound by the 

mediation agreement, which on its face is a paradigmatic Type I agreement, 
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binding with respect to its terms despite contemplating a later formalization. See 

Tribune, 670 F. Supp. at 498. 

The context of the district court’s mediation program further confirms that 

this was a Type I agreement. See Vacold, 545 F.3d at 127–28 (looking to the context 

of the negotiations). It is clear that everyone in the mediation understood the 

executed mediation agreement to bind the parties to its terms and not merely to 

set a framework for future negotiations. The parties and their attorneys signed the 

mediation agreement, as did the mediator. By her own admission, Murphy 

agonized over the mediation agreement, taking time to clear her head and to call 

her mother before signing it, indicating that she thought the mediation agreement 

would bind her and conclude the litigation. There is nothing in the record to 

suggest that Murphy or anyone else construed the mediation agreement to be just 

an invitation to further negotiation.

In sum, there can be no doubt that the parties here “intend[ed] to be bound” 

by the mediation agreement, id. at 125, and the fact that they may have anticipated 

“lawyers’ embellishments” in a final formal agreement, Shann, 84 F.3d at 78, in no 

way makes the mediation agreement unenforceable. To hold otherwise would 

defeat the very purpose of the mediation program and render the execution of 
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mediation agreements a hollow and pointless exercise. In all but the most unusual 

circumstances, mediation agreements that include express language indicating 

that the parties have reached agreement on all material terms are presumptively 

Type I agreements – unless the parties explicitly reserve the right not to be bound 

by the mediation agreement’s terms until a final agreement is drafted and signed.

B. Murphy Was Not Under Duress When She Signed the Mediation 

Agreement

As a secondary argument, Murphy contends that, due to the pressure placed 

on her by the mediator and her attorney, the mediation agreement is voidable 

because she signed it under duress. “In general, repudiation of an agreement on 

the ground that it was procured by duress requires a showing of both a wrongful 

threat and the effect of precluding the exercise of free will.” United States v. Twenty 

Miljam-350 IED Jammers, 669 F.3d 78, 88 (2d Cir. 2011) (internal quotation marks 

and alterations omitted). There is no evidence to support the contention that 

Murphy’s free will was overcome. To the contrary, Murphy was given the 

opportunity to step outside of the room and collect herself, and she was given the 

opportunity to call her mother to discuss her options. While her attorney and the 

mediator urged her to sign the mediation agreement, no one prevented her from 

leaving the mediation or continuing with the litigation. Moreover, we agree with 
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other courts to address this issue and the Restatement that a party seeking to void 

an agreement based on duress must show that the alleged coercive behavior 

originated with the defendant or was known to the defendant at the time the 

agreement was made. See Evans v. Waldorf-Astoria Corp., 827 F. Supp. 911, 914 

(E.D.N.Y. 1993), aff’d, 33 F.3d 49 (2d Cir. 1994); see also Restatement (Second) of 

Contracts § 175 (Am. Law Inst. 1981). In her declaration and in her email to the 

district court, Murphy does not describe any coercive behavior by the Institute 

during the mediation nor does she assert that the Institute knew of any coercive 

behavior at the time she and the Institute agreed to settle the case. Insofar as 

Murphy was put under any pressure to sign the mediation agreement, that 

pressure came from her counsel and the mediator, not the Institute or its attorneys. 

Accordingly, we reject Murphy’s argument that the mediation agreement is void 

because she signed it under duress.

III. CONCLUSION

For the foregoing reasons, we AFFIRM the judgment of the district court.