A Guide to Settlement for Unrepresented Complainants

What is Settlement?

Settlement is the voluntary and mutually beneficial resolution of litigation. Settlement is voluntary in the sense that neither party can be forced to participate in settlement discussions, or to accept a proposed settlement term or agreement. Settlement is mutually beneficial in the sense that both parties gain something from the outcome. The specific benefits of settlement will be explained in greater detail below.

Why Settle?

As explained above, settlement is mutually beneficial to the parties. Specifically, the complainant receives something of value (e.g., money; restoration of leave; a promotion; reinstatement to a prior position; a neutral job reference; etc.) and avoids the costs and stress associated with continued litigation. The agency likewise avoids the costs and stress associated with continued litigation, and gets to conclude what is likely a long-standing workplace dispute. In addition, settlement affords both parties the opportunity to avoid the inherent risks of litigation, the final outcome of which may or may not be desired. In this sense, settlement allows the parties greater control over the outcome of the litigation, even if that outcome is not exactly what the parties may have hoped for.

When is Settlement Appropriate?

In short, settlement is always appropriate. As long as both parties are willing to consider reasonable offers from the other party, and to put an end to the costly and stressful process of litigation, settlement efforts are strongly encouraged.

Who is Involved in the Settlement Process?

It depends. In addition to the complainant, the complainant’s attorney(s)/representative(s), and the agency attorney(s), the settlement process may include one or more agency managers with authority to negotiate on behalf of the agency. In addition, various other individuals may assist the parties in reaching an agreement. For settlement discussions facilitated by the EEOC, those individuals can include the EEOC Administrative Judge (AJ) assigned to the case; an AJ not assigned to the case; an EEOC mediator; or a private mediator who has volunteered to assist the EEOC—there is no cost associated with an EEOC-facilitated settlement discussion. Note that the parties are always welcome to hire or otherwise obtain the assistance of a private mediator of their own choosing; there may, however, be a cost associated with such an arrangement.

Are there Different Types of Settlement Processes?

Generally speaking, the EEOC uses two processes to facilitate the settlement of all federal sector cases: (1) informal settlement discussions, which are usually led or facilitated by the AJ assigned to the case; and (2) formal mediations, which may be led or facilitated by an AJ not assigned to the case, an EEOC mediator, or a volunteer mediator. Informal settlement discussions focus primarily on the terms of a proposed settlement agreement, with very limited discussion of the facts of the case and no discussion of the complainant’s likelihood of success on their claims. Mediations usually take one of two forms: (1) facilitative or (2) evaluative. Like informal settlement discussions, facilitative mediation focuses primarily on the terms of a proposed settlement agreement and the parties’ respective negotiating posture. Evaluative mediation, on the other hand, focuses much more on the facts of the case and the mediator’s sense of the complainant’s likelihood of success on the merits of their claims. Utilizing their expertise in the field of employment law, evaluative mediators offer the parties a unique perspective on the case, which has the potential to influence both parties’ positions and increase the likelihood of settlement.

How Should I Prepare for Settlement Discussions?

An open mind is the most important part of any successful settlement discussion. So in preparing for a settlement discussion, regardless of the type, you should carefully consider a wide variety of potential settlement terms and your willingness to accept them as part of a final agreement. Settlement necessarily involves compromise, as the complainant, in order to avoid the risk of an unfavorable judgment, must accept something less than whatever they hoped to obtain by way of a final judgment in their favor. The agency, meanwhile, in order to avoid the risk of an unfavorable judgment, must provide some remedies to the complainant despite its belief that no remedies are warranted. The likelihood of a successful settlement increases substantially with the parties’ willingness to “think outside the box” and consider a range of different settlement terms.

In addition to keeping an open mind, if you are participating in a formal, evaluative mediation session, you should refamiliarize yourself with the key facts of your case and be prepared to point to specific evidence in the record that supports your belief that discrimination occurred. Doing so will assist the mediator in their own assessment of the relative value of your case, and may, if appropriate, help them persuade the agency to increase the value of the agency’s proposed settlement terms. You should also be prepared to identify and present documentation or other evidence supporting your request for money damages or other relief.

Can Administrative Judges Deny Requests for Settlement Discussions?

No. The parties are always free to discuss settlement, with or without the AJ’s knowledge or consent. That said, because EEOC AJs maintain “full responsibility for the adjudication” of their cases, they may exercise their discretion to deny requests to postpone deadlines or otherwise stop the processing of a case due to ongoing settlement efforts or any other reason.

Does the Administrative Judge Sign Off on the Settlement Agreement?

No. The EEOC is not a party to, and as a result the AJ neither signs nor approves, any settlement agreement entered into between the complainant and agency.

Are there any Legal Limitations on the Scope or Terms of a Settlement Agreement?

Yes. As a general matter, parties are free to agree to whatever terms they wish as part of a voluntary settlement agreement. There is, however, an important limitation: parties cannot agree to a waiver of the complainant’s right to challenge unlawful employment discrimination that occurs after the effective date of a settlement agreement. This is called a “prospective waiver of rights,” and the EEOC will consider it invalid and without any legal effect.

What Happens After a Settlement Agreement is Signed?

After the parties submit a signed settlement agreement to the AJ, the AJ will issue an order dismissing the case pursuant to the signed agreement, and the EEOC will take no further action.

What Happens if the Agency Fails to Comply with the Settlement Agreement?

EEOC regulations, at 29 C.F.R. § 1614.504(a), provide that “any settlement agreement knowingly and voluntarily agreed to by the parties, reached at any stage of the complaint process, shall be binding on both parties.” That same regulatory provision indicates that if a complainant believes an agency has failed to comply with its obligations under the agreement, the complainant

shall notify the[ir agency’s] EEO Director, in writing, of the alleged noncompliance within 30 days of when the complainant knew or should have known of the alleged noncompliance. The complainant may request that the terms of settlement agreement be specifically implemented or, alternatively, that the complaint be reinstated for further processing from the point processing ceased.

The regulations further provide, at 29 C.F.R. § 1614.504(b):

The agency shall resolve the matter and respond to the complainant, in writing. If the agency has not responded to the complainant, in writing, or if the complainant is not satisfied with the agency's attempt to resolve the matter, the complainant may appeal to the Commission[‘s Office of Federal Operations] for a determination as to whether the agency has complied with the terms of the settlement agreement or decision. The complainant may file such an appeal 35 days after he or she has served the agency with the allegations of noncompliance, but must file an appeal within 30 days of his or her receipt of an agency's determination. The complainant must serve a copy of the appeal on the agency and the agency may submit a response to the Commission within 30 days of receiving notice of the appeal.

I Have Alleged Age Discrimination--Does that Matter?

A unique process applies to the settlement of claims brought pursuant to the Age Discrimination in Employment Act (ADEA). The Older Workers Benefit Protection Act (OWBPA) imposes certain requirements on a complainant’s waiver of their right to pursue an ADEA claim due to settlement. More specifically, the OWBPA states that a complainant cannot waive an ADEA claim unless the waiver is “knowing and voluntary,” and then mandates that certain actions be taken before such a waiver will be considered valid. As explained by the EEOC’s Office of Federal Operations:

To meet the standards of the OWBPA, a waiver is not considered knowing and voluntary unless, at a minimum: (1) the waiver is clearly written from the viewpoint of the complainant; (2) the waiver specifically refers to rights or claims under the ADEA; (3) the complainant does not waive rights or claims arising following execution of the waiver; (4) valuable consideration is given in exchange for the waiver; (5) the Complainant is advised in writing to consult with an attorney prior to executing the agreement; and (6) the complainant is given a "reasonable" period of time in which to consider the agreement.i 

The minimum length of time that complainants must be given to consider a proposed settlement agreement before it will be deemed “reasonable” is 21 calendar days.ii In addition, complainants have the further right to revoke their waiver within 7 days after the date they signed the agreement.iii

Note that the OWBPA requirements outlined above apply only to ADEA claims. So in a case that involves ADEA claims and claims raised under another employment discrimination law, such as Title VII, an agency’s failure to take all of the required actions will not impact the validity of the complainant’s waiver of those claims. In that scenario, the non-ADEA claims will remain resolved pursuant to the settlement agreement, while the ADEA claims would be reinstated for further processing, as if the settlement never took place.iv

Learn more here about the EEOC’s federal sector case processing requirements, including information about the initial conference (A Guide to the Initial Conference for Unrepresented Complainants | U.S. Equal Employment Opportunity Commission), the discovery process (A Guide to the Discovery Process for Unrepresented Complainants), motions (A Guide to Motions for Unrepresented Complainants | U.S. Equal Employment Opportunity Commission), and the summary judgment process (A Guide to Summary Judgment for Unrepresented Complainants | U.S. Equal Employment Opportunity Commission):