If you work in the arena of labor-employment relations or are a manager or supervisor, then you’ve likely had to negotiate a settlement with an employee who filed some sort of claim in connection with his or her employment. If the negotiations are successful, the terms are reduced to a written instrument. When the agreement is finally signed by both parties, it often brings a sense of relief to each side that the litigation has been resolved. But buyer beware. Even after years of litigation before the Merit Systems Protection Board and Equal Employment Opportunity Commission, agencies still enter into settlement agreements with employees that result in litigation over the intention of the parties and whether there has been compliance with its terms.
Last year, the MSPB published a study entitled: “Clean record settlement agreements and the law.” This study focused on settlements that used a promise of a clean record as its main term. There had been years of litigation over what constitutes a “clean record” and whether agencies in particular instances had complied with the promise contained in the clean record provision. If you are a proponent of this type of settlement term, then read this study. In addition to providing law and explanation on the clean record term, the study offers several general tips for drafting any settlement agreement.
With that in mind, I offer a few general tips for either settling party on some basic principles:
Be specific in the negotiations about each party’s true intentions for each term. Often a client tells me that they don’t want me to seek to clarify a term offered by the agency because my client wants to be able to argue down the road at implementation time a certain interpretation my client has in mind. That’s simply a bad idea. Rather, oObtain a clear understanding of what the agency is offering because later on you will not be able to trick the agency into doing something it did not intend to do in the first instance. If you don’t have a clear, precise understanding of what each term is designed to do, you don’t have a deal.
Write the terms in clear, precise language such that each party knows exactly what the party has agreed to do. That flows from the first step in ensuring you know precisely what has been offered by each side. The more precise the terms are in writing, the more likely the agreement will do what the parties intended.
If you represent the agency, then make it clear during negotiations which “boiler plate” terms you intend to include in the written instrument. In my experience, many agencies believe that the waiver and release of claims term and a confidentiality term are boiler plate. That means to them that it’s a standardized, technical, nonsubstantive term that does not require negotiations. I disagree. What claims an employee releases and whether the agreement will be subject to a nondisclosure is substantive and requires negotiation. Not doing so creates ill will and a sense of deceit when the parties are close to the finish line.
Set a deadline on the performance of each term. Often agencies draft settlements set no deadline for performance of a term. For example, when will the agency cancel the suspension and pay the back pay, issue a new performance rating or issue payment for the attorney’s fees? Without deadlines, there is no incentive or mechanism for agency compliance. Setting a deadline on agency compliance is in the agency’s interest. It ensures that someone will get the job done. Surely the agency wants to have compliance on its part to avoid secondary litigation. Likewise, any obligation on the employee should have a respective deadline.
One last word on deadlines: Make them reasonable. It shouldn’t take more than 30 or 45 days to get a personnel action cancelled or pay attorney’s fees. When agencies propose more, again I believe it’s a setup for nonperformance. Something will get lost during the lengthy delay.
The guiding principle here is clarity and precision both in your negotiations and settlement drafting.
Debra L. Roth is a partner at the law firm Shaw Bransford & Roth in Washington. She is general counsel to the Senior Executives Association and the Federal Managers Association, host of the “FEDtalk” program on Federal News Radio, and a regular contributor to Federal News Radio’s “Federal Drive” morning show. Email your legal questions to firstname.lastname@example.org. View her blog at blogs.federaltimes.com/federal-law.