Settlement offer? Track other side’s response

When an employee files an EEOC complaint or otherwise indicates that a lawsuit may be coming, it sometimes makes sense to settle out of court. If you decide to go that route, make careful notes on every step in the process. Document all phone conversations and preserve every email.

You want to be able to show the exact settlement terms you offered and when the employee accepted the offer. That’s because an agreement may be binding if the employee’s attorney clearly stated that the offer had been accepted.

Recent case: Anthony filed an EEOC race discrimination complaint against his employer.

Shortly afterward, Anthony and several other employees were terminated, ostensibly because of a necessary reduction in force. The company offered severance payments in exchange for a release of all liability.

However, it sweetened Anthony’s offer. He would get the same amount as the others, plus an extra payment to settle the EEOC suit. Through his attorney, he rejected the offer. Then the employer doubled the monetary offer, but asked for a waiver of all claims.

Anthony’s attorney sent two emails stating that Anthony “wants to sign … and release all claims.” However, he never did and instead hired a different attorney, who filed a federal lawsuit.

The employer asked the court to dismiss the lawsuit, arguing that it had been ready, willing and able to pay the amount the parties had agreed to in exchange for the release. It argued that the offer had already been accepted and was binding without Anthony’s signature. The court agreed. (Simon v. Barrett Steel Energy Products, SD TX, 2018)