UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF INDIANA 

HAMMOND DIVISION 

ERIC PHERNETTON, ) 

 ) 

 Plaintiff, ) 

 ) 

 v. ) Cause No. 2:13-cv-487 

 ) 

McDONALD’S, ) 

 ) 

 Defendant. ) 

OPINION AND ORDER 

 This matter is before the court on the Motion to Enforce Settlement Agreement [DE 86] 

filed by the plaintiff, Eric Phernetton, on April 13, 2015. For the following reasons, the motion 

is DENIED. 

Background 

 The plaintiff, Eric Phernetton, initiated this employment discrimination suit on December 

27, 2013. Before initiating this suit, Phernetton brought his claims to the EEOC. Through an 

EEOC investigator, Daphne Gilmore, and an EEOC mediator, Cathy Campbell, the parties 

engaged in settlement discussions. The parties never discussed settlement directly. 

 Phernetton has alleged that Gilmore contacted him on November 18, 2013 to inform him 

that the defendant, Lowell, Inc., incorrectly named as McDonald’s, offered to settle the case for 

$1,100. Phernetton indicated that he accepted the offer immediately without any conditions. 

However, Phernetton has claimed that Gilmore informed him the following week that Lowell 

had withdrawn its offer and would not make the $1,100 payment. Phernetton then received his 

right-to-sue letter and filed this action. However, Phernetton has stated that he would not have 

filed this action if Lowell had fulfilled the settlement agreement. Phernetton has served Lowell 
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with discovery requests that addressed the settlement offer and acceptance. Lowell objected to 

the discovery requests as irrelevant to the issues of this litigation. 

 Lowell agreed that the parties engaged in settlement discussions through EEOC 

representatives. However, it has claimed that the parties did not reach a settlement agreement. 

Rather, it stated that Phernetton made a monetary demand through Campbell to settle his claims 

on September 25, 2013. Approximately one month later, Jason D. Keck, an attorney for Lowell, 

informed Campbell that Lowell would settle the claims for a lower sum than Phernetton offered 

provided that Phernetton agreed to and signed a written agreement that included material nonnegotiable, non-monetary terms. 

 The non-monetary terms included an agreement not to seek reemployment, strict 

confidentiality with liquidated damage penalties for breach, non-disparagement, a general 

release, a representation that Phernetton not shift any costs of his claims to Medicare, and factual 

assertions regarding Phernetton’s receipt of wages. During the settlement negotiations, Keck 

indicated that a signed written agreement stating the material non-monetary terms was a 

condition precedent to any settlement agreement. Additionally, Keck has stated that the nonmonetary terms were as important, if not more, than the monetary terms because of Phernetton’s 

litigious history. 

 On November 19, 2013, Keck informed Gilmore that Lowell would pay Phernetton an 

agreed sum to release his claims upon his acceptance and execution of a written settlement 

agreement including the non-monetary terms. At that time, Keck had not drafted the written 

settlement agreement. Soon thereafter, Gilmore informed Keck that Phernetton had agreed to the 

monetary terms of the settlement offer but that the parties would need to work out any non-
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monetary terms themselves. She did not state that Phernetton had agreed to the non-monetary 

terms of the settlement agreement. 

 Keck then began preparing the written settlement agreement. However, he learned that 

Phernetton may have been notified of a Medicare lien, which would prevent direct payment. 

Keck then notified Gilmore of the lien and requested that she ask Phernetton for any 

documentation to substantiate whether a lien existed. Keck was not notified of any 

documentation. Therefore, he quit working on the settlement agreement and informed the EEOC 

that the parties could not settle the case. Phernetton then commenced this lawsuit approximately 

one month later. Keck has indicated that Phernetton did not seek enforcement of this alleged 

agreement until sixteen months after he initiated this lawsuit and seven months after his attorneys 

entered their appearances. 

Discussion 

 “The district court has inherent authority to enforce a settlement agreement reached in a 

case pending before it.” Allen v. Dana, 2011 WL 3163232, at *1 (N.D. Ind. July 26, 2011) 

(citing Carr v. Runyan, 89 F.3d 327, 331 (7th Cir. 1996). However, Phernetton has not alleged 

that the parties reached a settlement agreement once he commenced this suit. Rather, he has 

alleged that the parties reached a settlement agreement before he initiated this suit, during 

settlement discussions with an EEOC investigator and mediator. Because the parties are not 

diverse, Phernetton must attempt to enforce the settlement agreement in state court even though 

the alleged agreement settled federal claims. Lynch, Inc. v. SamataMason Inc., 279 F.3d 487, 

489 (7th Cir. 2002) (citing Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 381–82, 114 S. 

Ct. 1673, 1677, 128 L. Ed. 2d 391 (1994)). 
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 In Kokkonen, the Supreme Court indicated that federal courts do not have jurisdiction 

over a breach of contract suit that included the dismissal of a federal claim as part of the 

consideration. 

The suit involves a claim for breach of a contract, part of the 

consideration for which was dismissal of an earlier federal suit. 

No federal statute makes that connection . . . the basis for federalcourt jurisdiction over the contract dispute. The facts to be 

determined with regard to such alleged breaches of contract are 

quite separate from the facts to be determined in the principal suit, 

and automatic jurisdiction over such contracts is in no way 

essential to the conduct of federal-court business. 

Kokkonen, 511 U.S. at 381. Additionally, the Court noted that state courts enforce settlement 

agreements unless there was an independent basis for federal jurisdiction. Kokkonen, 511 U.S. 

at 382. Phernetton has not established an independent basis for federal jurisdiction in this matter. 

Therefore, this court does not have jurisdiction to enforce the alleged settlement agreement and 

will not decide this issue on its merits. 

 For the foregoing reasons, the Motion to Enforce Settlement Agreement [DE 86] is 

DENIED. 

 ENTERED this 27th day of May, 2015.

 /s/ Andrew P. Rodovich 

 United States Magistrate Judge