United States District Court, N.D. Illinois, Eastern Division
October 21, 2005.
PAZ ENCOMIENDA, Plaintiff,
ANTHONY J. PRINCIPI, Secretary of the Department of Veterans Affairs, Defendant.
The opinion of the court was delivered by: MATTHEW KENNELLY, District Judge
MEMORANDUM OPINION AND ORDER
Paz Encomienda, a pro se plaintiff, has sued Anthony J.
Principi, the Secretary of the Department of Veterans Affairs,
for employment discrimination under Title VII of the Civil Rights
Act of 1964, 42 U.S.C. § 2000e-16. Principi has moved for summary
judgment. For the following reasons, the Court grants the motion.
Encomienda had worked as a nurse in the Department of Veterans
Affairs for more than twenty years when, in October 1994, she
filed a complaint with the Equal Employment Opportunity
Commission claiming employment discrimination. The EEOC accepted
the complaint for investigation (the outcome of which is unclear
based on the parties' submissions), and shortly afterwards,
Encomienda went on unpaid leave for a period of years, not
returning to the Department until February 2000. She filed
another EEOC complaint in June 2001, and the case was referred to
an administrative law judge who attempted to broker a settlement.
The parties, represented by counsel, met with the ALJ on March
26, 2003 and eventually worked out a deal. Encomienda agreed to apply for early
retirement, which would become effective on May 3, 2003, and the
Department agreed to pay her the requisite early retirement
benefits as well as restore, by April 19, 2003, any sick leave
she had used between October 1, 1995 and February 28, 2000. The
settlement agreement also provided that if Encomienda believed
that the Department had not satisfied its side of the bargain,
she should notify the Department's Deputy Assistant Secretary for
Equal Opportunity within thirty days of the date of the alleged
violation and request that the agreement be implemented.
Alternatively, she could request that her EEOC complaint be
reinstated. Thereafter, Encomienda could appeal to the EEOC under
29 C.F.R. § 1614.504 if she believed that the Department had not
fully implemented the settlement agreement.
Encomienda says that on the day the settlement was signed, she
was forced to remain at the EEOC office for more than six hours
without food or water; she was not allowed to participate in the
settlement negotiations; she was pressured to sign the agreement
minutes before the office closed; her attorney made her believe
that the judge would sanction her unless she signed; and someone
(it is not clear exactly who) made her believe that she could not
leave the EEOC library unless she signed.
On May 1, 2003, Encomienda's attorney wrote a letter to the
Department's Director of the Office of Employment Discrimination,
complaining that Encomienda's sick leave had not been restored
and requesting that her EEOC complaint be reinstated at the point
at which processing had ceased. The next day, the Department
restored her sick leave, and her retirement status became
effective the day after. The Department's Office of Resolution
Management (ORM) then issued a July 2, 2003 decision in response
to her May 1 letter in which it concluded that the Department did not breach the settlement agreement
because it timely cured the "technical breach."
Encomienda appealed the ORM decision to the EEOC Office of
Federal Operations (OFO), which issued a decision dated July 20,
2004, holding that the Department was not in material breach of
the settlement agreement. The OFO decision advised Encomienda
that she could apply for reconsideration of the decision within
thirty days of receiving it or, alternatively, file a civil
action in a United States District Court within ninety days. On
September 9, she requested reconsideration, but the OFO dismissed
the request as untimely. Encomienda filed this lawsuit on
December 22, 2004.
Summary judgment is proper when there are no genuine issues of
material fact and the moving party is entitled to judgment as a
matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
(1986). In considering a motion for summary judgment, the Court
views the facts in the light most favorable to the non-moving
party and draws reasonable inferences in favor of that party.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). In
this motion for summary judgment, the Department does not attack
Encomienda's underlying Title VII claim. It relies instead on its
defense that the claim is barred by the settlement agreement. In
response, Encomienda argues that the settlement agreement is
At the outset, the Court considers whether Encomienda has
offered evidence from which a jury reasonably could find that the
Department's failure to restore her sick leave by April 19 was a
material breach of the settlement agreement. To determine whether
a breach is material, the Court first examines the extent to
which the injured party is deprived of a benefit obtained under the contract and can be compensated for the breach and,
second, the extent to which the breaching party can cure the
failure and can be said to have acted in good faith. Restatement
(Second) of Contracts § 241. Moreover, in determining whether a
material breach relieves a non-breaching party's obligation to
perform, the Court considers "the extent to which the agreement
provides for performance without delay." Id. § 242(c); see
also Frank Felix Assocs., Ltd. v. Austin Drugs, Inc.,
111 F.3d 284, 291 (2d Cir. 1997).
In this case, Encomienda's sick leave was restored thirteen
days late and one day after she brought the issue to the
attention of the Department. She has presented no evidence that
she was injured by the Department's tardy performance, that the
Department failed to cure the breach or acted in bad faith, or
that the parties premised the agreement on performance without
delay. Consequently, no jury reasonably could find that the
Department's breach was material. See Frank Felix Assocs.,
Ltd., 111 F.3d at 291 (holding that party's return of a tape
drive twenty days late was not a material breach of a settlement
agreement); Malladi v. Brown, 987 F. Supp. 893, 906 (M.D. Ala.
1997) (holding that a seven month delay in payment of attorneys'
fees was not a material breach of a settlement agreement).
Encomienda next argues that the settlement agreement is
voidable because she signed it involuntarily principally
because her attorney coerced her signature. Ordinarily, the
validity and enforceability of a settlement agreement is governed
by general principles of contract law. See Fleming v. U.S.
Postal Serv., 27 F.3d 259, 260 (7th Cir. 1994). When it comes to
the settlement of Title VII claims, however, the Seventh Circuit
adds another layer to the common law, requiring that a waiver of
such a claim be knowing and voluntary. See Pierce v. Atchinson,
Topeka & Santa Fe Ry. Co., 65 F.3d 562, 571 (7th Cir. 1995)
(Pierce I); Riley v. American Family Mutual Ins. Co., 881 F.2d 368, 372 (7th Cir. 1989). This
requirement is "consistent with the strong congressional purpose
. . . to eradicate discrimination in employment." See Pierce I,
65 F.3d at 571.
Despite the heightened standard, the waiver of a Title VII
claim is presumptively voluntary where, as here, the waiving
party is represented by counsel who actively negotiates a
release. See Riley, 881 F.2d at 374. Under these circumstances,
"a plaintiff must be found to have executed the release of a
settlement voluntarily and knowingly, unless vitiating
circumstances such as fraud or duress existed to nullify
plaintiff's assent to the settlement." Id. To establish duress,
a plaintiff must demonstrate that a party to the transaction knew
of or was responsible for the threatening conduct. See In re
Mason, 300 B.R. 160, 167-68 (D. Conn. 2003); Evans v.
Waldorf-Astoria Corp., 827 F. Supp. 911, 914 (E.D.N.Y. 1993);
Restatement (Second) of Contracts § 175(2). Thus, if A induces B
by duress to enter a contract with C, and C promises to pay value
to B in good faith, the contract cannot be rescinded on grounds
of duress. See Restatement (Second) of Contracts § 175 at cmt.
As a result, Encomienda cannot rescind her contract based on
the acts of her attorney or anyone else unless she offers
evidence that the Department knew of the threatening conduct.
See Evans, 827 F. Supp. at 914 (holding in a Title VII case
that "[d]uress by other than the opposing party to a contract
cannot constitute compulsion sufficient to void the contract.");
cf. Fortino v. Quasar Co., 950 F.2d 389, 395 (7th Cir. 1991)
(holding that an attorney's misinformation is not enough to
vitiate a Title VII settlement); Riley, 881 F.2d at 372 (same);
Taylor v. Gordon Flesch Co., 793 F.2d 858, 864 (7th Cir. 1986)
Encomienda has offered no evidence that the Department was
responsible for or knew about the alleged duress. She claims that "there was heightened
pressure to sign"; that she "was made to believe that she could
not leave the [EEOC] Library without signing the settlement
agreement"; and that "she was without food and water" while in
the library. None of these allegations demonstrate that the
Department representatives participated in the alleged pressure.
Consequently, no jury reasonably could find that the release was
For the foregoing reasons, the Court grants Principi's motion
for summary judgment [docket no. 10]. The Clerk is directed to
enter judgment in favor of the defendant.
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