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Think the case is settled? Not until the employee signs on dotted line

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in Discrimination and Harassment,Human Resources

Sometimes, in the urge to quickly resolve an employment-related lawsuit, the employer, the employee and their lawyers agree on a settlement offer and assume the case is over.

Big mistake! The employer can’t forget about the case right away. In fact, a case is never truly settled until the employee who sued signs off on the agreement and cashes the check. And that may not always happen.

Recent case:
Lydia Magallanes sued Bell Telephone for disability and age discrimination. Once her attorney concluded that the case would be expensive and time-consuming—and after he had exhausted the $7,500 retainer Magallanes had paid—he urged her to settle the case. She refused, but he negotiated a $10,000 settlement anyway.

Magallanes refused to sign the agreement, but Bell Telephone convinced a court to enforce the agreement. She appealed and the 7th Circuit Court of Appeals sent the case back for trial. Another trial judge ordered the case settled, and she appealed again. This time the 7th Circuit wrote a scathing order saying it expected the case to go to a jury trial because there was no evidence that Magallanes had agreed to settle. (Magallanes v. Illinois Bell, No. 07-3028, 7th Cir., 2008)

Final note: Retain all documents associated with any litigation. You may need them far longer than you may think. Make sure you get everyone involved to summarize their version of events and collect copies of any notes and documents. If the case doesn’t settle, you will be prepared.

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