Acun v. Merrill Lynch, Pierce, Fenner and Smith

Background

Soner Acun, identified in the opinion as proceeding without a lawyer, sued Merrill Lynch under Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination, and the Family and Medical Leave Act, which protects certain employment leave rights. He alleged discrimination based on race, religion, and national origin, along with retaliation for complaining about discrimination and taking leave under the Family and Medical Leave Act.

On February 1, 2019, the parties attended a settlement conference before Magistrate Judge Sarah Netburn. Acun had pro bono counsel for the limited purpose of settlement matters. During the conference, the parties stated the material settlement terms on the record. Acun said that he understood and accepted those terms and understood that he was entering a binding and enforceable oral agreement. Merrill Lynch’s representative also stated the company’s authority and intent to be bound. Magistrate Judge Netburn directed the parties to put the agreement into a written document.

The parties negotiated several drafts but could not finalize the writing. Acun later asked to reinstate the case, and Merrill Lynch moved to enforce the oral settlement and dismiss the complaint.

Court’s review of the recommendation

Magistrate Judge Netburn recommended granting Merrill Lynch’s motion and dismissing Acun’s claims. Acun filed timely objections. Judge Daniels reviewed the portions to which Acun objected and concluded that the objections largely repeated his earlier arguments. The court therefore reviewed those objections for clear error, adopted the Report and Recommendation in full, and overruled the objections.

Enforceability of the oral settlement

The court applied four factors from Winston v. Mediafare Entertainment Corp. to determine whether the parties intended to be bound without signing a written agreement: whether they reserved the right not to be bound without a writing; whether they partly performed; whether they agreed on all material terms; and whether the agreement was the type usually put in writing.

The court found that the first factor favored enforcement because neither party reserved the right not to be bound without a written agreement. The court also found that directing the parties to prepare a written document, and later adding a merger clause to a proposed draft, did not by themselves show that the parties had not already agreed orally.

The second factor slightly favored enforcement. After the conference, Merrill Lynch sent draft agreements, the lawyers discussed them, and Acun provided revisions. The court noted, however, that neither party took affirmative action required by the settlement other than stopping the litigation.

The third factor strongly favored enforcement because both parties confirmed on the record that Magistrate Judge Netburn’s statement included all material terms and that they understood and accepted those terms. The fourth factor also favored enforcement because the proposed agreement was largely made up of standard settlement language and was not unusually complex.

Disposition

The court held that the parties intended to be bound by the oral settlement reached on February 1, 2019. It granted Merrill Lynch’s motion to enforce the settlement. Earlier in the decision, the court stated that Acun’s claims were dismissed. The opinion does not state whether that dismissal was with or without prejudice, and it does not disclose the confidential settlement terms.