Court Opinion

ID: 2959889
Source: CourtListenerOpinion
Date Created: 2015-09-17 17:36:29.441408+00
Date Added: 2024-06-11T12:26:36.149686
License: Public Domain

06-0300-cv
     Powell v. Omnicom

1                          UNITED STATES COURT OF APPEALS

2                              FOR THE SECOND CIRCUIT

3

4                                 August Term 2006

5     (Argued: February 8, 2007                  Decided: August 7, 2007)

6                               Docket No. 06-0300-cv

7    -------------------------------------------------------x

8    DOREEN POWELL,

9                             Plaintiff-Appellant,

10               -- v. --

11   OMNICOM, BBDO/PHD,

12                            Defendants-Appellees.

13   -------------------------------------------------------x

14   B e f o r e :       WINTER, WALKER, and SACK, Circuit Judges.
15

16         Appeal from a judgment of the United States District Court

17   for the Southern District of New York (William H. Pauley III,

18   Judge), denying plaintiff-appellant’s motion under Fed. R. Civ.

19   P. 60(b) to set aside a settlement agreement and reopen her civil

20   action.

21         AFFIRMED.

22                                      ELIZABETH A. MASON, New York, New
23                                      York, for Plaintiff-Appellant.

24                                      A. MICHAEL WEBER (Christina L.
25                                      Feege, on the brief), Littler
                                         -1-
1                                   Mendelson, P.C., New York, New
2                                   York, for Defendants-Appellees.

3    JOHN M. WALKER, JR., Circuit Judge:

4         In this appeal from a May 18, 2005, judgment of the district

5    court of the Southern District of New York (William H. Pauley

6    III, Judge), the question is whether plaintiff-appellant Doreen

7    Powell, who now has the legal equivalent of buyer’s remorse,

8    entered into a binding and enforceable settlement agreement with

9    defendants-appellees Omnicom and BBDO/PHD that concluded their

10   litigation.   For the following reasons, we hold that the

11   settlement agreement is fully enforceable and that the district

12   court properly denied Powell’s motion to reopen the case.

13                               BACKGROUND

14        Powell, a 52-year-old African American woman, began working

15   at BBDO, a subsidiary of Omnicom, in 1993.   After she was

16   promoted to vice president in 1994, she allegedly fell victim to

17   numerous discriminatory acts relating to promotions, performance

18   evaluations, pay, choice of accounts, and assignment of

19   subordinates.   Despite her complaints to management, Powell says

20   nothing was done.

21        On September 26, 2002, BBDO fired Powell, asserting that it

22   was because of her lack of seniority and failure to bill enough

23   business.   Powell claims that these reasons were pretextual

24   because BBDO did not terminate many white employees who had less

25   seniority and billed less business.   She also claims that BBDO

                                     -2-
1    retaliated against her by falsely reporting to the Department of

2    Labor that she had been discharged for misconduct.

3         On February 3, 2004, Powell sued BBDO and Omnicom under

4    Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et

5    seq.; the Age Discrimination in Employment Act of 1967 (“ADEA”),

6    29 U.S.C. § 621 et seq.; and various New York State and New York

7    City law violations.   On June 23, 2004, after several hours of

8    negotiation, Powell, who was represented by counsel, and Omnicom

9    agreed to an in-court settlement before Magistrate Judge James C.

10   Francis, IV.   Omnicom’s counsel recited the terms of the

11   settlement on the record:

12        •    Neither party would admit any wrongdoing

13        •    BBDO would pay Powell $35,000, from which no taxes

14             would be withheld

15        •    BBDO would write “a mutually agreed upon positive

16             reference regarding Ms. Powell’s employment with BBDO

17             Detroit”

18        •    BBDO would represent in writing to the Department of

19             Labor that it made an error in stating that Powell was

20             terminated for misconduct

21        •    BBDO and Omnicom could still sue Powell for

22             “malfeasance and other intentional conduct”

23        •    Neither party would disparage the other

24        •    Powell would never apply for employment with the

25             defendants
                                     -3-
1         •      Powell would represent that she had no other claims

2                pending against the defendants other than the federal

3                claims being settled

4         •      The agreement would remain confidential

5    The magistrate judge then asked Powell if the terms of the

6    agreement were acceptable to her and whether “on the basis of

7    agreeing to those terms that this case will be terminated with

8    prejudice and cannot be reopened.”       Powell responded

9    affirmatively on the record to both questions.

10        On June 29, 2004, the district court issued an order stating

11   that it had been informed that “this action has been or will be

12   settled.”    It ordered the action discontinued without prejudice

13   to restore “if the application to restore the action is made

14   within thirty (30) days of the date of this Order.”

15        The parties attempted to reduce their agreement to writing,

16   but Powell refused to sign.    On July 22, 2004, the district court

17   received a letter from Powell’s counsel asking that the case be

18   restored to the calendar.    Counsel also requested that they be

19   relieved from representation due to “irreconcilable differences”

20   with Powell.    Rather than restore the case to the calendar, the

21   district court ordered the parties to appear at a conference on

22   August 13, 2004.

23        At the conference, Powell accused her counsel of

24   misrepresenting that the $35,000 settlement would be tax-free and

25   pressuring her into accepting.     Her counsel denied any
                                        -4-
1    misconduct.   She also claimed that Omnicom’s reference letter was

2    unsatisfactory because it only stated that her performance at

3    BBDO was “satisfactory”; she wanted it to say that her

4    performance was “exemplary.”   Powell’s counsel said that Omnicom

5    was “really working to try to refine the language to please Ms.

6    Powell” and had offered to state that her performance was “fully

7    satisfactory.”

8         Finding that Powell seemed to be “a sophisticated and

9    knowledgeable business woman,” the district court concluded that

10   the settlement was enforceable.    It gave Powell the choice of

11   taking exception to the ruling and proceeding with the case or,

12   alternatively, working out the settlement’s details.    Powell

13   chose the first option, and the district court relieved her

14   counsel.

15        On March 11, 2005, Powell submitted affidavits pro se in

16   support of a motion to vacate and set aside the settlement and

17   restore the case to the calendar.    The district court construed

18   the affidavits as a motion to reopen under Fed. R. Civ. P. 60(b)

19   and denied the motion, finding that Powell “knowingly and

20   voluntarily entered into an in-court settlement agreement.”

21   Powell timely appealed.

22                               DISCUSSION

23        Because Powell’s case had already been closed, the district

24   court did not abuse its discretion in construing her March 11

25   motion as a Rule 60(b) motion.     See Lawrence v. Wink (In re
                                       -5-
1    Lawrence), 293 F.3d 615, 623 (2d Cir. 2002).    We review the

2    denial of a Rule 60(b) motion for abuse of discretion.     Rodriguez

3    v. Mitchell, 252 F.3d 191, 200 (2d Cir. 2001); see also Fennell

4    v. TLB Kent Co., 865 F.2d 498, 503 (2d Cir. 1989) (Feinberg, J.,

5    concurring) (involving decisions to restore a case to the

6    calendar).    We review the district court’s factual findings,

7    including whether a settlement agreement exists and whether the

8    parties assented to it, for clear error.    Omega Eng’g, Inc. v.

9    Omega, S.A., 432 F.3d 437, 443 (2d Cir. 2005).

10        A settlement agreement is a contract that is interpreted

11   according to general principles of contract law.    Id.   Once

12   entered into, the contract is binding and conclusive.     Janneh v.

13   GAF Corp., 887 F.2d 432, 436 (2d Cir. 1989), abrogated on other

14   grounds by Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S.

15   863 (1994).    When a party makes a deliberate, strategic choice to

16   settle, a court cannot relieve him of that a choice simply

17   because his assessment of the consequences was incorrect.        United

18   States v. Bank of N.Y., 14 F.3d 756, 759 (2d Cir. 1994).

19        Powell argues, however, that in these particular

20   circumstances, the agreement was not binding because (1) it was

21   never reduced to writing; (2) the parties never intended to be

22   bound absent a writing; (3) it was made in violation of the Older

23   Workers Benefit Protection Act (“OWBPA”), Pub. L. No. 101-433,

24   104 Stat. 978 (1990) (codified as 29 U.S.C. § 626(f)); and (4)

25   the district court’s July 1, 2004 order expressly gave her the
                                    -6-
1    right to have the case restored to the calendar if she moved for

2    such relief within 30 days of the issuance of the order.   We hold

3    that the settlement agreement is binding and enforceable; it

4    therefore concluded the litigation.

5         I.   Requirement of a Writing

6         Parties may enter into a binding contract orally, and the

7    intention to commit an agreement to writing, standing alone, will

8    not prevent contract formation.   Winston v. Mediafare Entm’t

9    Corp., 777 F.2d 78, 80 (2d Cir. 1985) (applying New York law).1

10   Consequently, a “voluntary, clear, explicit, and unqualified

11   stipulation of dismissal entered into by the parties in court and

12   on the record is enforceable even if the agreement is never

13   reduced to writing, signed, or filed.”2   Role v. Eureka Lodge No.

     1
       It is unclear whether the settlement of federal claims is
     governed by New York law or federal common law. The draft
     settlement agreement states that it is governed by New York law.
     The parties have not raised this issue and seem to agree, at
     least implicitly, that New York law applies. In Ciaramella v.
     Reader’s Digest Ass’n, 131 F.3d 320 (2d Cir. 1997), we declined
     to decide this question because New York law and federal common
     law were materially indistinguishable. Id. at 322; see also
     Monaghan v. SZS 33 Assocs., 73 F.3d 1276, 1283 n.3 (2d Cir. 1996)
     (“[T]he federal rule regarding oral stipulations does not differ
     significantly from the New York rule.”). The same is true here;
     therefore, we will apply New York and federal common law
     interchangeably.
     2
       Under New York law, the requirement that the settlement be on
     the record and in open court serves as a limited exception to the
     Statute of Frauds. Jacobs v. Jacobs, 645 N.Y.S.2d 342, 344-45
     (App. Div. 3d Dep’t 1996); see also N.Y. C.P.L.R. 2104 (“An
     agreement between parties or their attorneys relating to any
     matter in an action, other than one made between counsel in open
     court, is not binding upon a party unless it is in a writing
     subscribed by him or his attorney or reduced to the form of an
                                    -7-
1    434, I.A. of M & A.W. AFL-CIO, 402 F.3d 314, 318 (2d Cir. 2005)

2    (per curiam).     The settlement remains binding even if a party has

3    a change of heart between the time he agreed to the settlement

4    and the time those terms are reduced to writing.     Millgard Corp.

5    v. White Oak Corp., 224 F. Supp. 2d 425, 432 (D. Conn. 2002).

6    Here, Powell and Omnicom entered into a “voluntary, clear,

7    explicit, and unqualified” settlement on the record in open

8    court: Omnicom recited the terms of the agreement on the record,

9    and Powell expressly assented on the record to those terms and

10   the dismissal of the case.     Accordingly, the fact that the

11   settlement was never reduced to writing is insufficient to render

12   the settlement nonbinding.

13          II.   The Parties’ Intentions to be Bound Absent a Writing

14          Powell contends that the parties did not intend to be bound

15   by the settlement in the absence of a writing.     Parties who do

16   not intend to be bound until the agreement is reduced to a signed

17   writing are not bound until that time.     Ciaramella, 131 F.3d at

18   322.    Deciding whether the parties intended to be bound in the

19   absence of a writing requires us to consider (1) whether there

20   has been an express reservation of the right not to be bound in

21   the absence of a writing; (2) whether there has been partial

22   performance of the contract; (3) whether all of the terms of the

23   alleged contract have been agreed upon; and (4) whether the

     order and entered.”).
                                       -8-
1    agreement at issue is the type of contract that is usually

2    committed to writing.    Winston, 777 F.2d at 80; see also

3    Ciaramella, 131 F.3d at 323.    “No single factor is decisive, but

4    each provides significant guidance.”    Ciaramella, 131 F.3d at

5    323.    After considering these factors, we conclude that the

6    parties in this case intended to be bound notwithstanding the

7    absence of a writing.

8           First, neither party made any express reservation to be

9    bound only by a writing.    At the June 23, 2004 hearing, Omnicom’s

10   attorney stated without objection that the “parties have agreed

11   that the formal settlement documents will incorporate the

12   following terms and conditions,” suggesting that the settlement’s

13   reduction to writing was only a formality.

14          Second, there was partial performance of the settlement

15   agreement.    At the June 23, 2004 hearing, Omnicom agreed to draft

16   a reference letter for Powell; Omnicom drafted this letter, with

17   the only remaining detail being whether it would say that

18   Powell’s performance was “fully satisfactory” or “exemplary.”

19          Third, the parties agreed to all of the material terms of

20   the settlement agreement at the June 23, 2004 hearing.    Granted,

21   Powell later took issue with some of the language in the draft

22   agreement to which she had acceded at the June 23 hearing.      This

23   includes principally BBDO’s right to take legal action against

24   her for gross malfeasance or intentional misconduct, which

25   Omnicom ultimately removed.    We have held that even “minor” or
                                      -9-
1    “technical” changes arising from negotiations over the written

2    language of an agreement can weigh against a conclusion that the

3    parties intended to be bound absent a formal writing.   See

4    Winston, 777 F.2d at 82-83.   Such changes are relevant, however,

5    only if they show that there were points remaining to be

6    negotiated such that the parties would not wish to be bound until

7    they synthesized a writing “satisfactory to both sides in every

8    respect.”   See id.; see also R.G. Group, Inc. v. Horn & Hardart

9    Co., 751 F.2d 69, 76 (2d Cir. 1984) (“A . . . factor is whether

10   there was literally nothing left to negotiate or settle, so that

11   all that remained to be done was to sign what had already been

12   fully agreed to.”).   Here, Powell and Omnicom agreed at the June

13   23, 2004 hearing that BBDO reserved the right to sue Powell;

14   Powell’s subsequent disagreement with, and Omnicom’s eventual

15   release of, that right do not suggest that the point was left to

16   be negotiated after the hearing.

17        Powell argues that because the parties were unable to agree

18   on a mutually satisfactory reference letter and because Omnicom

19   has not removed the negative review from her personnel file, the

20   parties did not agree to all the terms of the settlement.     This

21   argument, however, misses the point: They are relevant to

22   performance of the settlement rather than assent to its terms.

23        Powell also refers to certain representations in the draft

24   agreement to which she never agreed in court.   These

25   representations relate principally to the statutory requirements
                                    -10-
1    for validly waiving rights under the ADEA (to be discussed

2    further, infra) to effectuate settlement.      See 29 U.S.C. §

3    626(f).    Because these representations simply follow the legal

4    preconditions for waiving rights under the ADEA, which was the

5    entire point of the settlement, we cannot view them as additional

6    terms subject to negotiation.

7         The fourth factor – whether this agreement is the kind that

8    would normally be reduced to writing - is a closer question.      We

9    have held that a settlement, whose terms were not announced in

10   open court, for $62,500 paid over several years “strongly

11   suggest[ed]” that the parties would intend to be bound only by a

12   writing.    Winston, 777 F.2d at 83.   Similarly, we have held that

13   a settlement, also not announced in open court, containing

14   perpetual rights similar to those in the settlement at issue

15   would normally be put in writing.      Ciaramella, 131 F.3d at 326.

16   That settlement, like this one, contained provisions concerning

17   how future requests for employee references would be handled,

18   prohibiting the plaintiff from reapplying for employment with the

19   defendant, and imposing confidentiality requirements.       Id.

20        Unlike in Winston and Ciaramella, however, the terms of this

21   agreement were announced on the record and assented to by the

22   plaintiff in open court.    In Ciaramella, we stated that

23   “[s]ettlements of any claim are generally required to be in

24   writing or, at a minimum, made on the record in open court.”       Id.

25   (emphasis added).    The significance of announcing the terms of an
                                     -11-
1    agreement on the record in open court is to ensure that there are

2    at least “some formal entries . . . to memorialize the critical

3    litigation events,” Willgerodt v. Hohri, 953 F. Supp. 557, 560

4    (S.D.N.Y. 1997) (quoting Dolgin v. Dolgin (In re Dolgin Eldert

5    Corp.), 31 N.Y.2d 1, 10 (1972)), and to perform a “cautionary

6    function” whereby the parties’ acceptance is considered and

7    deliberate, see Tocker v. City of N.Y., 802 N.Y.S.2d 147, 148

8    (App. Div. 1st Dep’t 2005).   The in-court announcement here

9    functioned in a manner akin to that of a memorializing writing.

10   As a result, this factor, viewed in the light most favorable to

11   Powell, is neutral as to whether the parties intended to be bound

12   only by a writing.

13        Consequently, at least three of the four factors favor the

14   conclusion that the parties intended to be bound in the absence

15   of a writing.   We therefore conclude that Powell was bound by the

16   in-court, oral settlement.

17        III. Powell’s Rights Under the OWBPA

18        Powell next argues that the settlement is invalid under the

19   OWBPA because it did not meet the OWBPA’s timing requirements.

20   Her argument is without merit.3

     3
       Whether the OWBPA applies to settlements made in-court and on
     the record is an open question in this circuit. In the
     unpublished decision Manning v. N.Y. Univ., No. 98-Civ.-
     3300(NRB), 2001 WL 963982, at *11-16 (S.D.N.Y. Aug. 22, 2001),
     the Southern District of New York held that the OWBPA does not
     apply under those circumstances. On appeal, we expressly
     declined to decide the question. See Manning v. N.Y. Univ., 299
     F.3d 156, 164 (2d Cir. 2002) (per curiam). Because the parties
                                    -12-
1         To protect the rights and benefits of older workers,

2    Congress amended the ADEA in 1990 through the OWBPA by adding,

3    inter alia, 29 U.S.C. § 626(f), which regulates employee waivers

4    and releases under the ADEA.   Hodge v. N.Y. Coll. of Podiatric

5    Med., 157 F.3d 164, 166 (2d Cir. 1998); see also Oubre v. Entergy

6    Operations, Inc., 522 U.S. 422, 426-27 (1998).     Under the OWBPA,

7    an individual may waive his rights only if the waiver is “knowing

8    and voluntary.”   29 U.S.C. § 626(f)(1).    Section 626(f) provides

9    specific statutory requirements for a “knowing and voluntary”

10   waiver that the employer must meet in order for an employee to

11   waive his ADEA claims.   Tung v. Texaco Inc., 150 F.3d 206, 209

12   (2d Cir. 1998).   The failure to meet these requirements renders

13   the release unenforceable irrespective of general contract

14   principles.   See Oubre, 522 U.S. at 427.

15        Section 626(f)(1)’s requirements, which apply generally to

16   waivers of ADEA claims, include, inter alia, that the individual

17   be given “a period of at least 21 days within which to consider

18   the agreement” and “a period of at least 7 days following the

19   execution of such agreement . . . [to] revoke the agreement.”     29

20   U.S.C. § 626(f)(1)(F), (G).

21        Powell cannot rely on those timing requirements because

22   under § 626(f)(2), they do not apply to actions such as Powell’s

     assume that the OWBPA applies and we conclude that its
     requirements were met in any event, there is again no need for us
     to decide the question.
                                    -13-
1    that are filed in court and allege age discrimination under 29

2    U.S.C. § 623.    See also Hodge, 157 F.3d at 166-67.   Section

3    626(f)(2) instead requires that “the individual [be] given a

4    reasonable period of time within which to consider the settlement

5    agreement.”   The Equal Employment Opportunity Commission has

6    interpreted this requirement to mean “reasonable under all the

7    circumstances, including whether the individual is represented by

8    counsel or has the assistance of counsel.”    29 C.F.R. §

9    1625.22(g)(4).

10        Powell had a reasonable period of time to consider the

11   settlement.   She was represented by counsel when the parties

12   entered the settlement.   Further, Powell – a former corporate

13   vice president and sophisticated business woman – had nearly two

14   years between her termination and settlement negotiations to give

15   considered thought to how she wished to resolve this dispute.

16   Congress imposed statutory requirements for waiver to ensure that

17   “older workers are not coerced or manipulated into waiving their

18   rights to seek legal relief under the ADEA.”    Syverson v. Int’l

19   Bus. Machs. Corp., 472 F.3d 1072, 1075-76 (9th Cir. 2007)

20   (quoting S. Rep. No. 101-263, at 5 (1990)).    Recognizing that an

21   employee is vulnerable and at an informational disadvantage just

22   after he is terminated, the Senate report noted that an:

23        employee who is terminated needs time to recover from
24        the shock of losing a job, especially when that job was
25        held for a long period. The employee needs time to
26        learn about the conditions of termination, including
27        any benefits being offered by the employer. Time also
                                     -14-
1         is necessary to locate and consult with an attorney if
2         the employee wants to determine what legal rights may
3         exist.
4
5    S. Rep. No. 101-263 (1990), as reprinted in 1990 U.S.C.C.A.N.

6    1509, 1538-39.   After the passage of nearly two years, Powell

7    plainly was not under “shock” or time pressure to settle.     And

8    she advances no convincing arguments that she was.    Therefore,

9    while only a few hours elapsed between the beginning of

10   settlement negotiations and Powell’s assent to those terms in-

11   court, this period of time was reasonable under the

12   circumstances.

13        Powell does not advance any serious arguments that the other

14   requirements of § 626(f)(2) were not met.   The settlement

15   agreement is therefore enforceable notwithstanding the OWBPA.

16        IV.   District Court’s Refusal to Restore the Case

17        Powell’s final argument is that the district court erred by

18   refusing to restore her case to the calendar when she requested

19   on July 21, 2004 that it do so.   She focuses on the district

20   court’s June 29, 2004 order, which she claims gave her a 30-day

21   option to restore the case.   She argues that because she made her

22   request within the 30-day period, that order required the

23   district court to grant it.

24        We acknowledge that the district court’s order lacked

25   clarity as to whether Powell was bound by the in-court

26   settlement.   The order began by stating, “[i]t having been

27   reported to this Court that this action has been or will be
                                    -15-
1    settled.”   The latter clause suggests that the parties had not

2    settled the case.    Moreover, the language with respect to

3    restoring the action upon application suggests that the

4    settlement was not yet binding and that she would be able to

5    restore the action if she so chose.

6         Despite the order’s wording, the district court did not

7    abuse its discretion in denying Powell’s motion based upon its

8    investigation into the June 23, 2004 hearing.    The district court

9    did not simply ignore Powell’s request; it promptly convened a

10   conference to determine the settlement’s enforceability and

11   thoughtfully considered whether to restore the action to its

12   calendar.   Given the need for the district court to inquire into

13   the matter and the district court’s ability to reconsider any

14   previous indications of its intended rulings, we cannot say that

15   the district court abused its discretion in hearing from the

16   parties and, as shown above, properly concluding that the

17   settlement was binding.    See Fennell, 865 F.2d at 503 (Feinberg,

18   J., concurring).    Moreover, we have previously affirmed a

19   district court’s refusal to reinstate because of an enforceable

20   oral settlement after it dismissed the suit without prejudice to

21   reopen if the parties could not consummate settlement.      See Role,

22   402 F.3d at 318.    We also defer to the district court’s

23   reasonable and implicit interpretation of its own order that it

24   did not provide the parties with an unfettered option to reopen

25   the case.   Cf. Casse v. Key Bank Nat’l Ass’n (In re Casse), 198
                                     -16-
1   F.3d 327, 334 (2d Cir. 1999) (“[A]n appellate court reviewing

2   bankruptcy orders should defer to a district court’s

3   interpretation of its own order . . . .” (internal quotation

4   marks omitted)).

5                              CONCLUSION

6        For the foregoing reasons, the judgment of the district

7   court is AFFIRMED.

                                  -17-