In Williamson v. Boehringer-Ingelheim Pharmaceuticals (N.J. App. Div., March 12, 2012), the New Jersey appellate court advised mediating parties how to prevent successful post-mediation challenges to settlements reached in mediation. The court’s conclusion: don’t conclude the mediation without having the parties or their counsel draft and sign a document containing the essential terms of the settlement.

In the Williamson case, plaintiff filed suit against her employer alleging violations of the New Jersey Law Against Discrimination and the New Jersey Constitution, breach of the implied covenant of good faith, and wrongful discharge and hostile working environment. After almost two years of litigation, the parties participated in voluntary, private mediation, which lasted approximately nine hours. At the conclusion, the parties reached a settlement in which plaintiff would dismiss her complaint with prejudice in exchange for $125,000 plus the cost of six months of medical, dental and vision insurance. Plaintiff, the mediator, and an attorney for defendants signed a one-page document summarizing the terms of the settlement and agreed to sign a more detailed, final settlement agreement within one week of the date of the one-page agreement. Less than one week later, defendants forwarded to plaintiff’s counsel an eleven-page Agreement and Release. By email ten days later, plaintiff advised defendants that she was “declining settlement.”

Thereafter, defendants filed a motion to enforce the settlement and compel plaintiff to sign the eleven-page Agreement and Release. After a hearing, the court, concluding that a settlement had been reached, entered an order which enforced the mediated settlement agreement, compelled plaintiff to execute the Agreement and Release, dismissed plaintiff’s complaint with prejudice, and awarded attorneys fees to plaintiff’s counsel.

Plaintiff appealed, arguing that the trial court erred in enforcing the settlement without conducting a hearing and making findings of fact about what occurred at the mediation. Alternatively, plaintiff argued that, even if the court concluded that a settlement had been reached, the settlement should be limited to the terms set forth in the one-page document she signed in the mediation.

The appellate court affirmed the trial court’s decision in part, and vacated and remanded the decision in part. The court held that defendants proved that the parties, with the advice of counsel, reached a binding settlement in principle as to all the material terms following the lengthy mediation as reflected in the one-page document signed at the mediation. However, the court vacated the provision of the trial court’s order compelling plaintiff to sign the detailed Agreement and Release, finding that the trial court failed to determine whether each of the provisions of the eleven-page Agreement and Release encompassed or exceeded the scope of the parties’ one-page settlement agreement, The court also vacated that portion of the order awarding attorneys fees to plaintiff’s counsel and remanded the issue to the trial court, holding that the award of counsel fees exceeded the parameters of the one-page settlement agreement.

The Williamson case is attached here – Williamson v. Boehringer-Ingelheim Pharmaceuticals

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