Settlements and Releases


As a follow up to my post a few weeks ago on McLaren Macomb, the NLRB has issued new Guidance of which in-house counsel should take note.

  • The McLaren Macomb decision is retroactive. This means that any severance agreement entered into by an employee prior to February 21, 2023, which violates the McLaren Macomb decision, is now unlawful.
  • An unlawful severance agreement is a “continuing violation” of the Act, such that the six-month statute of limitations does not prohibit an employee from bringing a claim based upon a past severance agreement entered into over six months ago.
  • The decision applies to current and former non-supervisory employees, which means in-house counsel must consider whether past and current severance agreements are lawful.
  • Employees cannot waive their right to lawful confidentiality and/or non-disparagement clauses.
  • An employee need not execute a settlement agreement for there to be a violation; the Board will find a violation of the Act if an unlawful severance agreement is offered, which could result in equitable and economic remedies in favor of the impacted employee.
  • The McLaren Macomb decision impacts any employer communication to employees that tends to interfere, restrain, or coerce an employee’s Section 7 rights (i.e.,
… Keep reading


If your company, like many, includes “standard” confidentiality and non-disparagement provisions in its employee severance agreements, those agreements may contravene a recent NLRB decision, McLaren Macomb. In that matter, the NLRB considered the validity of severance agreements offered to 11 employees who were furloughed where such severance was conditioned on them agreeing to the following, seemingly innocuous, confidentiality and non-disclosure provisions:

Confidentiality Agreement. The Employee acknowledges that the terms of this Agreement are confidential and agrees not to disclose them to any third person, other than spouse . . . professional advisors . . . or unless legally compelled to do so . . . .

Non-Disclosure. At all times hereafter, the Employee promises and agrees not to disclose information, knowledge or materials of a confidential, privileged, or proprietary nature of which the Employee has or had knowledge of, or involvement with, by reason of the Employee’s employment. At all times hereafter, the Employee agrees not to make statements to Employer’s employees or to the general public which could disparage or harm the image of Employer, its parent and affiliated entities and their officers, directors, employees, agent and representatives.

Prior to McLaren Macomb, such provisions had … Keep reading


While I can’t remember anything specific from my 1-L Contracts class, I’m sure that is where I first was exposed to the concept that an integration clause could prevent a party to a written contract from claiming that other terms had been agreed to orally but, for some reason, had not been memorialized in the document. As the First Circuit recently discussed in Guldseth v. Family Medicine Associates, LLC, however, integration clauses can come in different shapes and sizes. As an initial matter, there is the question of whether the clause results in the contract being fully integrated or only partially integrated:

By fully integrated, we mean a statement which the parties have adopted as a complete and exclusive expression of their agreement. Compare that to [a] partially integrated agreement, which means the agreement is intended as a final expression of one or more terms, but not as the complete and exclusive expression of all terms to which the parties agreed. The degree of integration in turn dictates the degree to which earlier agreements are discharged by the later-formed agreement [and] whether an agreement is fully integrated is … an issue of fact.”

Indeed, because the scope … Keep reading


In some contracts, a party must meet its obligations by a certain date or forfeit its rights, and some of those contracts also include a “time is of the essence” clause. As most practitioners know, coupling a date for performance with a time is of the essence clause means that the deadline is inflexible. Having said that, there also are a number of cases where such hard deadlines were deemed to have modified by the conduct of the parties. See, e.g., McCarthy v. Tobin.  However, it is perilous to assume that your negotiations imply an extension when a time is of the essence clause is in play. Indeed, that is exactly what happened to the defendant in Reem Property, LLC v. Transfer Financial, LLC.

Reem Property was the high bidder in a foreclosure sale of real estate, and it entered into a Memorandum of Understanding with Transfer Financial to purchase that property. Pursuant to the MOS, Reem paid a $10,000 deposit. The time for closing was set for 12:00 p.m. on June 30, 2014, and time was of the essence. Before the closing, Reem’s counsel found that there was a problem with the newspaper advertisement … Keep reading


 

You have gone back and forth with an adversary via email several times and keep getting closer to a monetary settlement. Finally, the other side makes an offer that is over your bottom line, and you want to put the matter to rest. Should you accept? Maybe, but before you do, be sure that you have thought through all the non-monetary components of that offer. Failing to do so could end up binding you to an agreement that does not include provisions that are important to your client.

Lane v. Powell started as a wrongful death and personal injury action that became particularly nasty during the litigation. Certain lawyers, expert witnesses and other non-parties were accused of defamation and criminal witness tampering. Eventually, summary judgment limited the claims in the case, and the remaining parties engaged in serious settlement negotiations. After several emails between counsel closed the gap, the following exchange took place:

  • First, Defendants’ counsel wrote: “I’ve got $120,000 for all claims and nowhere else to go for more.”
  • Two days later, Plaintiffs’ counsel responded: “$120,000 is accepted. …The releases will include the 93A case, but no confidentiality.”
  • Twelve minutes later, Defendants’ counsel answered: “Excellent, that’s great.
… Keep reading


In another post, I discussed how an email can satisfy the signature requirements of the Statute of Frauds. Nevertheless, an email is not always sufficient. Indeed, as the plaintiff in Terry v. Vinfen recently learned, sometimes you just have to do things the old fashioned way, and send a letter.

In June of 2019, Richard Terry filed a lawsuit against Vinfen and one of its employees. Not long thereafter, the parties engaged in mediation, which resulted in a settlement. After verbally acknowledging that settlement on the record, a written settlement agreement was prepared and executed by all parties on October 10, 2019. In order to comply with the Older Workers Benefit Protection Act, the settlement agreement specifically provided that Terry:

May revoke [the Settlement] Agreement within seven (7) days after he signs it, by delivering a letter in hand or first class mail (postage prepaid), to Jaclyn Kugell, Morgan, Brown & Joy, LLP, 200 State Street, Boston, MA 02109. This [agreement] shall be of no force and effect unless Mr. Terry … does not revoke this [agreement] within the seven (7) day period outlined [in the previous sentence].

On October 13, 2019, Terry emailed Attorney Kugell, stating: … Keep reading


As I discussed in a blog post several years ago, even an informal email can constitute acceptance of a contractual offer. Moreover, just a few months ago, Judge Timothy Hillman took this principle one step further by ruling, in Witt v. American Airlines, that an exchange of emails can form a binding settlement agreement, even if the parties have not agreed to all of the terms of that settlement.

In 2014, Diane Witt sued American Airlines for injuries she claimed to have sustained while on a flight. After litigating that case for more than three years, the parties finally engaged in serious settlement discussions. Ultimately, American Airlines’ counsel sent the following email to Witt’s counsel:

I have been informed $15,000 is firm (together with acceptable release) and that the settlement must happen promptly before more costs are incurred. This really needs to get done this week and certainly before any further hearing for the experts have to spend any more time preparing for deposition.

Witt’s counsel eventually responded: “Thanks for getting back to me. Ms. Witt accepts the settlement offer of $15,000. Please send the proposed release when you can.”

Less than one month later, however, Witt’s counsel … Keep reading


As I have written before, the Massachusetts Weekly Payment of Wages Act obligates employers to pay all earned wages to employees in a timely fashion. The Wage Act also specifies that the “president and treasurer of a corporation and any officers or agents having the management of such corporation” are personally liable for violations. In Segal v. Genitrix, LLC, et al., the Massachusetts Supreme Judicial Court, interpreting the phrase “agent having the management of the corporation” for the first time since it was added to the Wage Act in 1935, ruled that, as long as board members and investors acted in their ordinary capacities, they were not such agents and could not personally be liable for violations.

In Segal, the former president and chief executive officer of Genitrix, asserted that two former board members of the company, H. Fisk Johnson III and Stephen Rose, should be individually liable for wages that Segal claimed he was owed for services he performed for the company. Neither Johnson nor Rose was the president, treasurer, or any other officer of Genitrix. The Appeals Court, relying on Cook v. Patient Edu, ruled that Segal might have viable claims against Johnson and … Keep reading


It’s human nature to engage in an emotional exhale after reaching an agreement in principle to settle a long-standing or hard-fought dispute. While doing so is all well and good, it is critical that you don’t let that deter you from exercising extreme focus on documenting that settlement in a carefully crafted agreement. Indeed, as the plaintiff in Zvi Construction v. Levy found out a few weeks ago, failing to do so can leave your client in a position where it is unable to obtain the fruits that it rightfully deserves.… Keep reading

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