## Facts

- Jacobs (employee) filed an age-discrimination charge with the Equal Employment Opportunity Commission (EEOC) against the New York Financial Center Hotel (hotel).
- The parties participated in a mediation session intended to resolve the EEOC charge.
- After approximately five hours of mediation, the parties reached an agreement: the hotel would pay Jacobs $65,000 and provide a letter of recommendation, and Jacobs would withdraw his EEOC complaint.
- Several days later, Jacobs’s attorney informed the hotel’s attorney that Jacobs was rejecting the agreement and wanted additional money.
- The parties attempted to renegotiate but did not reach a new agreement.
- Jacobs then filed suit against the hotel asserting age-discrimination claims.
- The hotel moved to dismiss, arguing that the mediation produced a binding settlement and that Jacobs had had substantial time before the mediation to consider settlement.
- Jacobs argued that any waiver of his Age Discrimination in Employment Act (ADEA) rights was invalid because it was not “knowing and voluntary” under the Older Workers Benefit Protection Act (OWBPA), 29 U.S.C. § 626(f).

## Issues

1. Whether the mediation agreement constituted an enforceable settlement contract that barred Jacobs’s later age-discrimination suit.
2. Whether Jacobs’s waiver of ADEA claims in the mediated settlement was “knowing and voluntary” as required by the OWBPA.

## Decision

- The court enforced the mediation settlement and granted the hotel’s motion to dismiss the later-filed suit.
- The court treated Jacobs’s post-mediation attempt to reject the deal and seek more money as a change of position that did not undo a completed settlement.
- The court concluded that the waiver of ADEA claims connected to the settlement was valid under the OWBPA’s “knowing and voluntary” standard on the circumstances presented.

## Legal Principles

- Settlement agreements are enforced when the parties reach mutual assent on the material terms and exchange consideration; a later attempt to renegotiate does not, by itself, negate contract formation.
- A release of ADEA claims is enforceable only if it is “knowing and voluntary” and satisfies the statutory requirements set out in 29 U.S.C. § 626(f) (OWBPA).
- In evaluating whether an ADEA waiver is knowing and voluntary, courts consider objective circumstances of the agreement process, including clarity of the terms, the setting in which the agreement was reached (such as a structured mediation), and whether the employee had meaningful opportunity to consider the settlement and consult counsel.

## Conclusion

Jacobs v. New York Financial Center Hotel enforced a settlement reached in EEOC mediation resolving an age-discrimination charge, holding that the agreement was binding despite the employee’s later attempt to withdraw and that the ADEA waiver satisfied OWBPA’s knowing-and-voluntary requirement, requiring dismissal of the subsequent lawsuit.


Jacobs v. New York Financial Center Hotel, 1997 WL 375737 (1997)