Why “Gentlemen’s Agreements” Aren’t Enforceable Before The EEOC

By Deryn Sumner, April 19, 2017

In the January edition of this newsletter, I discussed the importance of ensuring that the terms of settlement are properly contained within the “four corners” of a settlement agreement and clearly understood by everyone involved. Just a few weeks ago, the EEOC’s Office of Federal Operations issued a decision illustrating why this is so important. In Retha W. v. Department of Agriculture, EEOC Appeal No. 0120151000 (March 24, 2017), the complainant filed an appeal from a Final Agency Decision finding no breach of a settlement agreement. The Commission affirmed the agency’s position that no breach occurred.  The Commission’s decision tells us that the settlement agreement contained two terms: that the agency would agree to pay the complainant $8,000 and in exchange, the complainant would agree to withdraw her EEO complaint. Seems like unless the agency just plum forgot to issue the payment or refused to do so, there would be no means for a breach, right?

Well, actually the complainant had a different understanding of what the agency was agreeing to do in resolution of the case.  Citing a “Gentlemen’s Agreement” that the complainant claims was “communicated with the involved parties, including Complainant, her representative, the Agency’s resolving official, and the state conservationist at the time the Settlement Agreement was signed,” the complainant asserted that the agency agreed to announce a GS-12 position for which the complainant would be considered for and listed on the referral list. When the agency never advertised such a position, the complainant alleged a breach of the agreement.

The agency reviewed the terms of the settlement agreement itself and found no reference to a term wherein the agency agreed to advertise a position or give the complainant consideration for any such position.  She got the payment of $8,000 she was due under the agreement, and that was it.  Although the agency admitted there being some discussion during settlement negotiations of a position potentially becoming available at some point in the future, there were no promises made and no such agreement was included in the settlement agreement.

In its decision, the Commission included its oft-cited precedent that settlement agreements are simply contracts between the parties, that the intent of the parties must be expressed within this contract, and that the meaning will be determined from the four corners of the agreement without looking to extrinsic evidence. Noting that the “Gentleman’s Agreement” was never reduced to writing (but not that the complainant was female), and that the complainant should have sought to have the term included if she wanted it as part of the settlement, the Commission found no breach of the agreement.  Sumner@FELTG.com.