The Wages of Mediation Coercion in Title VII Cases
We've talked before about complaints that mediators sometimes use time- authority- and fear-pressure tactics to wrest agreement from the parties.
If a client can prove she was coerced into settling a Title VII case, the Federal District Court for the Northern District of California has a remedy for her -- rescission.
As reported last year by the National Arbitration Forum, the Court In Ryles v. Palace Hotel, rescinded a mediated settlement agreement as violative of federal law governing the release of Title VII claims. The release of such claims must be “voluntary, deliberate, and informed.”
As the National Arbitration Forum article explained
In applying that standard, courts must consider the “totality of the circumstances.” The factors to be considered include the clarity of the agreement, the claimant’s education and business experience, whether the atmosphere for the execution of the agreement was coercive, and whether the plaintiff had the benefit of counsel.
All but one of those factors favored enforcement. However, one of the factors – whether the atmosphere for the execution of the agreement was coercive – weighed heavily against enforcement because of the “intense pressure” applied by Ryles’ attorney. Based on that factor, the Court held that Ryles could rescind the settlement agreement.
In reaching its holding, the Court cited Ryles’ letter to the Court as bolstering her credibility. Moreover, the Court rejected Palace Hotel’s argument that California law required coercion by the other party to the contract, noting that the release of Title VII claims is governed by federal law.
More on mediation "duress" soon.