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To end an employment lawsuit, or more often simply as part of a non-litigious parting, employers often offer a severance package part of which consists of various terms releasing all claims and covenanting not to sue, requiring confidentiality and cooperation in the case of future litigation, and so forth. Now, in a lawsuit against CVS, the Equal Employment Opportunity Commission is taking the position that many such clauses constitute “retaliation” for protected activity and are legally invalid. Jon Hyman of Ohio Employer’s Law Blog notes that the clauses under challenge are generic ones widely used in severance packages and explains why in his view the “case has the potential to be most significant piece of litigation the EEOC has filed in recent memory.” Daniel Schwartz at Connecticut Employment Law Blog also calls the suit “a big deal: “My gut tells me that the courts are not likely to view the government’s arguments with favor. … But for employers, that is of little solace.” More: Ameet Sachdev/Chicago Tribune (“the EEOC brought the suit even though CVS expressly protected employees’ rights under discrimination laws”), Joshua Feinstein, JD Supra (“the potential for havoc is great”), Hope Eastman/Paley Rothman (“a major shock to employers”)


“…Because it’s leverage in negotiating a more favorable sex-harassment settlement.” [Tim Noah] More: Ken at Popehat.


Roger Herrin of Harrisburg, Ill. has handed over 600,000 quarters, weighing nearly four tons, to his adversary in partial settlement of a legal dispute over the division of insurance proceeds. Describing himself as “very, very bitter,” Herrin said he wanted to “do it in pennies” but was unable. [Associated Press]


March 7 roundup

by Walter Olson on March 7, 2013

A California attorney reached a $350,000 settlement just before a jury returned with its verdict on his client’s suit. Turned out the jury had been prepared to award $9 million. The plaintiffs attorney, C. Michael Alder, who is president of the Consumer Attorneys of Los Angeles, then told a judge that his developmentally disabled and brain-damaged client (who had been severely injured after jumping out of an ambulance) had not properly authorized him to settle the case. Los Angeles County Superior Court Judge Michael Johnson granted a new trial. [The Recorder, ABA Journal, Judicial Hellholes and followup]


Settling a lawsuit filed by the Federal Trade Commission, the maker of the drink agrees to warn on its label that it really has quite a lot of alcohol in it and can get you tipsy without having to go back often for refills. As Elie Mystal notes, the “warning” might fit rather nicely into the beverage’s marketing strategy. Scott Greenfield has thought of a parallel case.

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September 16 roundup

by Walter Olson on September 16, 2011

  • House Judiciary holds hearing on asbestos-claim fraud and abuse, with Prof. Brickman headlining [Main Justice, Legal NewsLine, WSJ law blog, PoL, Brickman testimony]
  • Endangered species habitat in Nevada: “Elko County wants end to 15-year-old trout case” [AP]
  • “Why is the Eastern District of Texas home to so many patent trolls?” [Ted Frank/PoL, more] Tech giants say multi-defendant patent suits place them at disadvantage [WSJ Law Blog] Plus: “Patent company has big case, no office” [John O'Brien, Legal NewsLine]
  • Lawsuit settlement and the lizard brain [Popehat]
  • “U.S. Commission on Civil Rights Looks Into Eminent Domain Abuses” [Kanner, Somin] U.K.: “Squatters could be good for us all, says judge in empty homes ruling” [Telegraph]
  • Madison mob silences Roger Clegg at news conference where he releases new study of UW race bias [ABA Journal, Althouse]
  • Life in Australia: “Another motorized-beer-cooler DUI” [Lowering the Bar]


The Namby Pamby offers tips for settling low-value cases. Extensive use of Angry Birds is recommended.

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August 2 roundup

by Walter Olson on August 2, 2010

  • “Why Do Employers Use FICO Scores?” Maybe one reason is that government places off limits so many of the other ways they might evaluate job applicants [McArdle, Coyote]
  • Michael Fumento on $671 million verdict against nursing home in California [Forbes]
  • Ted Frank is looking for a pro bono economics expert [CCAF]
  • Lester Brickman, “Anatomy of an Aggregate Settlement: The Triumph of Temptation Over Ethics” [Phillips Petroleum explosion; SSRN via Legal Ethics Forum]
  • Ice cream trucks return to Niskayuna, N.Y. 34 years after a panic-occasioned ban [Free-Range Kids, Mangu-Ward]
  • Galloping trend toward “whistleblower” enactments: this time lawmakers are rushing one on oil workers [Smith/ShopFloor, more, earlier]
  • Class action lawsuit filed against Trident Xtra Care gum, marketed as good for one’s teeth [Hoffman/ConcurOp; compare Russell Jackson on Wrigley's settlement of a class action over Eclipse chewing gum]
  • EEOC officials urge employers to ban foul language and swearing in workplace [seven years ago at Overlawyered]


By tortuous steps, the dispute continues to advance in a New Jersey courtroom over whether, as part of a settlement of discrimination claims by some of its employees, Prudential made a side payment to the law firm representing the workers, and if so whether that was proper. Both the giant insurer and the law firm, Leeds Morelli & Brown, have disputed the clients’ accounts and denied wrongdoing. [Newark Star-Ledger via ABA Journal, earlier]

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I got an email asking me what happened to the case in the following post:

While his wife, Jeanette Passalaqua, was giving birth, Steven fainted in the delivery room, fracturing his skull and dying two days later. This is, says the family, the fault of Kaiser Foundation Hospitals and Southern California Permanente Medical Group Inc. “‘This avoidable tragedy was a direct result of Kaiser’s ordinary negligence in failing to exercise reasonable care to prevent foreseeable injuries to Steven,’ according to the suit, which was filed last week in San Bernardino County Superior Court.” So if your maternity ward is rubber-padded next time you go there, you know why.

So I looked it up in the San Bernardino County Superior Court docket database: the case settled almost immediately. The docket does not report the amount of the settlement, which could conceivably have been for a token amount, but one can infer that there was some substantial money involved, because the settlement required proof of the purchase of annuities for the two plaintiff minors, which normally wouldn’t be worth the transactions costs if the sums were tiny. But that inference may be incorrect. If ever I find myself in San Bernardino, maybe I’ll check the paper record to see if there’s more public detail.


Guest Post by Victoria Pynchon

This just in from my IP ADR Blog colleague Mike Young of Alston + Bird

I wish I was clever enough to make this stuff up, but I’m not.  Only reality can be this bizarre.

A sexual harassment defendant settles the case for $1.3 million.  Not satisfied with the usual “no admission of liability” clause found in most settlement agreements, Mr. Harasser insists on an adjudication of NON-liability as a condition to paying the $1.3 million.

Here’s how the parties work it:

As part of the settlement, the harassment dispute will be “arbitrated” based on stipulated facts.  The defendant will have sole discretion in the selection of the “arbitrator” and will pay the entire fee.  The stipulated facts are, essentially, “defendant is innocent and plaintiff is wrong.”

Not only does the settlement agreement set forth the stipulated facts for the “arbitration,” it also dictates the arbitration award, word for word (essentially “the defendant is innocent and the plaintiff is wrong), and then spells out the press release that will follow the “arbitration,” that the defendant was totally vindicated in the lawsuit by a defense award (leaving out, of course, the part about paying $1.3 million to the plaintiff).

With me so far?

A fake arbitration to be followed by a false press release…and then the defendant pays the $1.3 million.

This is pulling a fast one on the public and a perversion of the justice system since the fake arbitration award would inevitably be followed by an uncontested entry of judgment based on the arbitral award.

Were I the defendant, I would be pretty careful to select an arbitrator who I knew would go along with this, like my [hypothetical] sociopathic uncle.  I certainly wouldn’t select a former judge and one of the State’s top private jurists.

But, what do I know.  In this case, the defendant with the unilateral right to select the arbitrator for this “arbitration” selected a former San Francisco judge sitting on the prominent JAMS panel, Daniel Weinstein.

To no one’s surprise except maybe the defendant, the plaintiff didn’t show up for the “arbitration.”  Why should she?  Based on the stipulated facts, she already “lost” the “arbitration.”  For reasons that are not fully explained in the subsequent legal opinion, but probably because Weinstein is smart and ethical enough to know a rat when he sees one running across his conference room table, Weinstein refused to participate in the sham proceeding.

As the defendant, what would you do now? I’d probably pay the $1.3 million and call it a day. Because the case had not been dismissed, the court called the parties in to see what was going on.  The plaintiff said she wanted to enforce the settlement.  The defendant said the plaintiff breached the settlement agreement by not showing up to the “arbitration,” and that the settlement agreement had a real arbitration provision so that any dispute over the agreement had to be arbitrated (the old fashioned way).  The trial court read the settlement agreement for the first time, and then denied the defendant’s motion to compel arbitration.

Now would be a good time to pay up and move on.  There’s been no publicity and no public disclosure of this bizarre effort to fool the press and public with a sham arbitration proceeding.  But no.  This defendant decided to appeal the denial of the motion to compel arbitration, making everything public.

Sure enough, the appellate court issued an opinion, not officially published but available on the web for the world to see at, in which this entire fake arbitration process is shared with readers like you and me.

Here you have an effort to create a false record for the purpose of issuing  a misleading press release to fool the public into believing the defendant was exonerated. It’s certainly fraud but is it actionable by anyone? And because the attempt was foiled by this new Darwin Awards winner, no harm was ever done.

We praise the ethical decision of JAMS neutral Daniel Weinstein in refusing to join in this attempt to use JAMS, and eventually the Courts, to perpetrate a public fraud.  Is there any question that an arbitrator who would go along with this sham would be violating his/her professional responsibilities (not to mention undermining JAMS’ sterling reputation)?

But where is the judicial outrage?  In the appellate court opinion, none of the justices took the defendant to task.   There is no indication that the trial court was shocked or concerned by the possibility that it was overseeing a settlement whose goal was to defraud the public.

The “A” in ADR does not mean “A”nything goes in the pursuit of expedited calendars.  It is alternative, not anarchic.

[editor's note: see also Nov. 16 (American Apparel's view of episode)]