Powell v. Omnicom, No. 06-0300 (2d Cir. 2007)

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06-0300-cv Powell v. Omnicom 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 4 5 August Term 2006 (Argued: February 8, 2007 6 Decided: August 7, 2007) 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 15 B e f o r e : 16 WINTER, WALKER, and SACK, Circuit Judges. 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 23 ELIZABETH A. MASON, New York, New York, for Plaintiff-Appellant. 24 25 A. MICHAEL WEBER (Christina L. Feege, on the brief), Littler -1- 1 2 3 4 Mendelson, P.C., New York, New York, for Defendants-Appellees. JOHN M. WALKER, JR., Circuit Judge: 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. BACKGROUND 13 14 Powell, a 52-year-old African American woman, began working 15 at BBDO, a subsidiary of Omnicom, in 1993. 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. 20 nothing was done. 21 After she was Despite her complaints to management, Powell says 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. 24 because BBDO did not terminate many white employees who had less 25 seniority and billed less business. Powell claims that these reasons were pretextual -2- She also claims that BBDO 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. 8 negotiation, Powell, who was represented by counsel, and Omnicom 9 agreed to an in-court settlement before Magistrate Judge James C. On June 23, 2004, after several hours of 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 15 would be withheld ¢ 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 ¢ 22 BBDO and Omnicom could still sue Powell for 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. 9 affirmatively on the record to both questions. 10 Powell responded 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. 13 to restore if the application to restore the action is made 14 within thirty (30) days of the date of this Order. 15 It ordered the action discontinued without prejudice The parties attempted to reduce their agreement to writing, 16 but Powell refused to sign. 17 received a letter from Powell s counsel asking that the case be 18 restored to the calendar. 19 relieved from representation due to irreconcilable differences 20 with Powell. 21 district court ordered the parties to appear at a conference on 22 August 13, 2004. 23 On July 22, 2004, the district court Counsel also requested that they be Rather than restore the case to the calendar, the 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. 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. Powell s counsel said that Omnicom 8 Finding that Powell seemed to be a sophisticated and 9 knowledgeable business woman, the district court concluded that 10 the settlement was enforceable. 11 taking exception to the ruling and proceeding with the case or, 12 alternatively, working out the settlement s details. 13 chose the first option, and the district court relieved her 14 counsel. 15 It gave Powell the choice of Powell 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. 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 23 The district court construed DISCUSSION 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). 2 denial of a Rule 60(b) motion for abuse of discretion. 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). 7 including whether a settlement agreement exists and whether the 8 parties assented to it, for clear error. 9 Omega, S.A., 432 F.3d 437, 443 (2d Cir. 2005). 10 We review the Rodriguez We review the district court s factual findings, Omega Eng g, Inc. v. A settlement agreement is a contract that is interpreted 11 according to general principles of contract law. 12 entered into, the contract is binding and conclusive. 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). 16 settle, a court cannot relieve him of that a choice simply 17 because his assessment of the consequences was incorrect. 18 States v. Bank of N.Y., 14 F.3d 756, 759 (2d Cir. 1994). 19 Id. Once Janneh v. When a party makes a deliberate, strategic choice to United 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. 3 that the settlement agreement is binding and enforceable; it 4 therefore concluded the litigation. We hold 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. 9 Corp., 777 F.2d 78, 80 (2d Cir. 1985) (applying New York law).1 Winston v. Mediafare Entm t 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). 3 a change of heart between the time he agreed to the settlement 4 and the time those terms are reduced to writing. 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 The settlement remains binding even if a party has Millgard Corp. 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. 18 322. 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 Ciaramella, 131 F.3d at Deciding whether the parties intended to be bound in the order and entered. ). -8- 1 agreement at issue is the type of contract that is usually 2 committed to writing. 3 Ciaramella, 131 F.3d at 323. 4 each provides significant guidance. 5 323. 6 parties in this case intended to be bound notwithstanding the 7 absence of a writing. 8 9 Winston, 777 F.2d at 80; see also No single factor is decisive, but Ciaramella, 131 F.3d at After considering these factors, we conclude that the First, neither party made any express reservation to be 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. 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 At the June 23, 2004 hearing, Omnicom agreed to draft 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. 23 includes principally BBDO s right to take legal action against 24 her for gross malfeasance or intentional misconduct, which 25 Omnicom ultimately removed. This 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. 4 Winston, 777 F.2d at 82-83. 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. 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. ). 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 See Such changes are relevant, however, See id.; see also R.G. Group, Inc. v. Horn & Hardart Here, Powell and Omnicom agreed at the June 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. 21 argument, however, misses the point: They are relevant to 22 performance of the settlement rather than assent to its terms. 23 This Powell also refers to certain representations in the draft 24 agreement to which she never agreed in court. 25 representations relate principally to the statutory requirements -10- These 1 for validly waiving rights under the ADEA (to be discussed 2 further, infra) to effectuate settlement. 3 626(f). 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 See 29 U.S.C. § Because these representations simply follow the legal The fourth factor whether this agreement is the kind that 8 would normally be reduced to writing - is a closer question. 9 We 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. 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. 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. 20 Winston, 777 F.2d at 83. Similarly, we have held that Ciaramella, 131 F.3d at 326. Id. 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. 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. 25 (emphasis added). In Ciaramella, we stated that Id. 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). 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. The in-court announcement here 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. 16 in-court, oral settlement. We therefore conclude that Powell was bound by the 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. 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). 7 an individual may waive his rights only if the waiver is knowing 8 and voluntary. 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. 12 (2d Cir. 1998). 13 the release unenforceable irrespective of general contract 14 principles. 15 Hodge v. N.Y. Coll. of Podiatric 29 U.S.C. § 626(f)(1). Under the OWBPA, Section 626(f) provides Tung v. Texaco Inc., 150 F.3d 206, 209 The failure to meet these requirements renders See Oubre, 522 U.S. at 427. 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. 20 U.S.C. § 626(f)(1)(F), (G). 29 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. 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. 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. 9 1625.22(g)(4). 10 See also Hodge, 157 F.3d at 166-67. Section The Equal Employment Opportunity Commission has 29 C.F.R. § Powell had a reasonable period of time to consider the 11 settlement. 12 entered the settlement. 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. 19 Bus. Machs. Corp., 472 F.3d 1072, 1075-76 (9th Cir. 2007) 20 (quoting S. Rep. No. 101-263, at 5 (1990)). 21 employee is vulnerable and at an informational disadvantage just 22 after he is terminated, the Senate report noted that an: 23 24 25 26 27 She was represented by counsel when the parties Further, Powell a former corporate Syverson v. Int l Recognizing that an employee who is terminated needs time to recover from the shock of losing a job, especially when that job was held for a long period. The employee needs time to learn about the conditions of termination, including any benefits being offered by the employer. Time also -14- 1 2 3 4 5 is necessary to locate and consult with an attorney if the employee wants to determine what legal rights may exist. S. Rep. No. 101-263 (1990), as reprinted in 1990 U.S.C.C.A.N. 6 1509, 1538-39. 7 plainly was not under shock or time pressure to settle. 8 she advances no convincing arguments that she was. 9 while only a few hours elapsed between the beginning of After the passage of nearly two years, Powell And Therefore, 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. 20 court s June 29, 2004 order, which she claims gave her a 30-day 21 option to restore the case. 22 request within the 30-day period, that order required the 23 district court to grant it. 24 She focuses on the district She argues that because she made her We acknowledge that the district court s order lacked 25 clarity as to whether Powell was bound by the in-court 26 settlement. 27 reported to this Court that this action has been or will be -15- The order began by stating, [i]t having been 1 settled. 2 settled the case. 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 The latter clause suggests that the parties had not Moreover, the language with respect to 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. 9 did not simply ignore Powell s request; it promptly convened a The district court 10 conference to determine the settlement s enforceability and 11 thoughtfully considered whether to restore the action to its 12 calendar. 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. 18 J., concurring). 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. 22 402 F.3d at 318. 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. Given the need for the district court to inquire into See Fennell, 865 F.2d at 503 (Feinberg, Moreover, we have previously affirmed a See Role, We also defer to the district court s 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-

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