Dillard v. Starcon Intern., Inc.

• Decision Date: 18 April 2007
• Docket Number: No. 05-4790.,05-4790.
• Citation: 483 F.3d 502
• Parties: James DILLARD, Plaintiff-Appellant, v. STARCON INTERNATIONAL, INCORPORATED, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

483 F.3d 502

James DILLARD, Plaintiff-Appellant, v. STARCON INTERNATIONAL, INCORPORATED, Defendant-Appellee.

No. 05-4790.

United States Court of Appeals, Seventh Circuit.

Argued September 22, 2006.

Decided April 18, 2007.

Sallie G. Smylie, Brian P. Kavanaugh (argued), Kirkland & Ellis, Chicago, IL, for Plaintiff-Appellant.

Frederick L. Schwartz, Melodie K. Craft (argued), Littler Mendelson, Chicago, IL, for Defendant-Appellee.

Before EASTERBROOK, Chief Judge, and KANNE and SYKES, Circuit Judges.

SYKES, Circuit Judge.

James Dillard sued his former employer, Starcon International, Inc., for racial discrimination. With the discovery deadline looming and scheduled depositions on the horizon, Starcon initiated settlement discussions. These talks produced oral agreement on key terms, including a cash payment and reinstatement. New points of contention arose, however, when Starcon provided Dillard with a proposed written agreement. Dillard objected to certain provisions Starcon now sought to introduce that had not been previously discussed. Starcon thought these new disputes did not undo the oral agreement the parties had already hammered out and moved to enforce the oral settlement. Dillard denied that any final agreement had been reached because the parties had not ironed out several points first raised in the written agreement. The presiding magistrate judge granted Starcon's motion, concluding that the parties had achieved a meeting of the minds on the material terms of the settlement. Dillard appeals and we affirm.

I. Background

Dillard began working for Starcon, an Illinois-based mechanical contracting company, as a "B-Mechanic Apprentice" in 1996. Over the next several years, he worked in several positions at various work sites and eventually obtained "B-Welder" status. In July of 2003 at a Citgo Refinery site in Illinois, Dillard made a welding error by using the wrong welding rod on a pipe. When Dillard notified Starcon of his mistake, the company initiated disciplinary and remedial actions. Starcon removed Dillard from the job site and revoked his B-Welder certification. Starcon also proposed a plan whereby Dillard would be assigned to a different job site, placed under the supervision of a mentor, and tested in the future to reacquire his B-Welder status. When Dillard refused to be demoted and comply with this corrective plan, Starcon terminated his employment.

Dillard filed a charge of discrimination with the Illinois Department of Human Rights. He alleged he had been the target of racial insults by coworkers and supervisors, beginning in 2000 while he was at an Exxon Mobil site and continuing through his transfer in 2002 to the Citgo Refinery site. He alleged that when he complained to his supervisors, he was told he would be laid off if he pressed the matter. He also claimed Starcon assigned him work inferior to his training. After the Equal Employment Opportunity Commission ("EEOC") issued a right-to-sue notice, Dillard filed suit against Starcon in federal court, bringing claims for hostile work environment, retaliation, retaliatory discharge, and racial discrimination.¹ The district court transferred Dillard's case to a magistrate judge.

On March 17, 2005, with discovery soon to close, Starcon's attorney initiated settlement discussions. Starcon first offered Dillard $40,000 and reinstatement as a B-Welder if he passed the requisite welder's test. In return Starcon asked Dillard to dismiss his suit and release any claims against Starcon. Because it did not want to waste time or money unnecessarily taking depositions scheduled for the following week, Starcon asked Dillard for a response to its offer no later than March 21, 2005.²

One day later, on March 18, 2005, Dillard countered by asking for $75,000 cash, C-Welder pay while he was training for his B-Welder test, two opportunities to pass the B-Welder test, one month of training for the B-Welder test, and employment at a Chicago-area work site. Later that same day, Starcon responded with an offer of $45,000, A-Mechanic pay during Dillard's training period (because the C-Welder position no longer existed), payment for training as long as Dillard maintained a B average in his course, and reinstatement at least initially at a Chicago-area site as long as work existed there (with flexibility to be assigned to other locations in the future). Though there is a discrepancy in the record on this point, Starcon also apparently agreed to give Dillard two chances to pass the B-Welder test. That same day, Dillard's counsel informed Starcon that its terms were acceptable—except Dillard wanted a $65,000 cash payment.³ Starcon answered by upping its cash payment offer, now proposing a $50,000 payment. Again, Starcon gave Dillard until March 21, 2005, to take or leave this final offer.

More discussion of the cash payment followed. On March 20, 2005, Dillard's counsel advised Starcon that Dillard would not accept less than $65,000. Later that day, Starcon acquiesced on this point. In a telephone call, Starcon's counsel confirmed the $65,000 payment and the other terms the parties had previously agreed to and offered to prepare a written draft of the agreement.

Up to this point, the parties had orally agreed to the following terms: (1) Dillard would release Starcon from liability; (2) Starcon would pay Dillard $65,000; (3) Starcon would reinstate Dillard as an A-Mechanic; (4) Starcon would give Dillard an opportunity to train and retest for B-Welder status; (5) Starcon would provide Dillard with B-Welder training and pay for this training if Dillard maintained a B average; (6) Dillard would have two opportunities to pass the B-Welder test; and (7) Dillard would be reinstated at a Chicago-area work site, though he would remain open to future transfers to other locations.

Between March 23, 2005, and March 31, 2005, the parties exchanged drafts of a written agreement. Each draft included various terms that the parties had not previously discussed. Starcon's first draft included provisions related to: a release of all Dillard's future claims against Starcon; a promise by Dillard not to partake in future investigations against Starcon; a damages provision if Dillard should breach the agreement; a confidentiality clause; a nondisparagement clause; designation of Dillard's employment as at-will; Dillard's adherence to all Starcon procedures and policies; and a reservation of rights by Starcon to discipline or lay off Dillard in the future.

Dillard found many of these new provisions objectionable. In particular, Dillard wanted the unilateral release, nondisparagement, and confidentiality provisions to be mutual. He rejected the provision specifying that his employment would be at-will and the provision regarding compliance with unspecified policies and procedures. In addition, Dillard would not agree to refrain from assisting in future investigations or to pay liquidated damages in the event of a breach of the agreement. Dillard also said he would not sign the document because it represented that he had been given twenty-one days to consider the settlement when no such time period had been provided.

Beyond noting these objections, Dillard proposed his own additions to Starcon's draft. Dillard wanted Starcon to reemploy him within seven days of receiving his cash payment, establish his rate of pay at the level of an A-Mechanic, give him credit for the time he was unemployed towards the calculation of his benefits and seniority, secure an Illinois work site unless no such jobs were available, increase his compensation when he passed the B-Welder test, secure the A-Mechanic position if he failed the B-Welder test at least two times, and make him terminable only for just cause.

The parties quibbled over these points and others. Starcon explained to Dillard that his request for termination only upon "just cause" was in conflict with the employment status of every other Starcon employee and indeed, with Dillard's own prior employment with the company. Starcon remained firm in its insistence that Dillard agree not to assist others in investigations of Starcon and accept a clause providing for a monetary penalty in the event of breach. And Starcon claimed it could not agree to reemploy Dillard within a determinate period of time given his demand for an A-Mechanic position in Illinois. Dillard, for his part, now requested a net settlement payment of $65,000. (Despite the explanations of his counsel, Dillard contended he did not understand that the original offer of a cash payment was a gross figure.)

At a settlement conference before the magistrate judge on May 25, 2005, Starcon asserted that the parties had reached an oral agreement on all material terms of the settlement and that the disputes over the terms of the written agreement were immaterial to the enforceability of the oral settlement. On June 15, 2005, Starcon filed a motion to enforce the oral settlement. The magistrate judge granted Starcon's motion, finding that the parties orally agreed to the following terms: (1) Starcon would pay Dillard $65,000; (2) Dillard would be reinstated as an A-Mechanic; (3) Starcon would pay for Dillard's B-Welder training provided he maintained a B average; (4) Starcon would give Dillard two opportunities to pass the B-Welder test; and (5) Dillard would be reinstated in the Chicago area for the time being.

The magistrate judge held that the parties had reached a meeting of the minds on all material terms of their agreement. The court pointed to objective, undisputed evidence to support this conclusion. For one thing, the parties' initial oral negotiations whittled matters down to the parties' dispute about the cash payment, which was finally settled at $65,000. At that point Dillard's counsel did not suggest that other important matters needed to be ironed out. The court also noted the looming March 21 deadline set by Starcon under which the negotiations were being...