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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 115464
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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In an EEOC age discrimination settlement, if both the

Customer Question

In an EEOC age discrimination settlement, if both the Confidential Settlement Agreement and Release and the Conciliation Agreement understate the settlement amount, and the former incorporates by reference the latter but the latter does not incorporate by reference the former, is the doctrine of incorporation by reference applicable, or are the two contracts null and void? If the doctrine applies, can Title 18 US Code Sec 1001 be used to void the contracts?
Submitted: 9 months ago.
Category: Legal
Expert:  Maverick replied 9 months ago.

1. What are the false statements that you are referring to that you believe would apply under Sec 1001?

2. Is there some dispute about what the settlement amount is?

It may be helpful for us to do a phone call on this. The added cost is $13.00. If you are interested, please accept the offer I send to you on this and then return here and type in your phone number so that I can call you.

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Customer: replied 8 months ago.
I'll spell out everything from the beginning. I filed a complaint with the EEOC against my former employer for age discrimination in the hiring process. The EEOC found in my favor , and a settlement was reached. The document with the Feds stated the full consideration, 100000 dollars. The company agreement incorporated the other agreement by reference. These were the advance copies my lawyer received. All language in both documents was standard boilerplate. When I went to sign the documents at the office of the lawyer I had retained, only the company's settlement was there. The line for the date left the day and year blank, but filled in the month with the wrong month. We drew a line through the month and wrote in the correct one, and the document was notarized. After this was sent back, the law office was later told by the company that there was a problem with the date and another copy would be sent. I and the attorney never read the new document, because we were not told it was an entirely new document. This was the one that contained a 10000 dollar settlement amount. The contract was rewritten to allow the payment to be treated as wages, even though it clearly should not have been. The company used the statute of limitations during the investigation to exclude all incidents in my complaint except for the last one, which took place 2 years after I no longer worked there. The confidentiality provisions were also rewritten to specifically include all events surrounding these shenanigans. The other document was sent to us about a week after this one was returned. Judging by the dates on the documents, the Feds received theirs in the same manner. The Fed document gave a 90000 dollar settlement amount. The company document incorporated by reference the Fed one, but not vice versa. I feel the Fed document is null and void because it intentionally misstated the settlement amount by 10000 dollars, and therefore cannot be incorporated by reference into the company' settlement agreement, rendering that one null and void. I also believe this false statement renders the Fed agreement null and void under public policy grounds since it violates the Federal legislation we previously discussed. Since the EEOC brought proceedings against the company on my behalf, the Fed agreement should receive primary consideration and is more important than the company one.. If you have any more questions, just let me know.
Expert:  Maverick replied 8 months ago.

It is clear that 18 USC Sec 1001 DOES apply to EEOC filings. For example, see law below:

TITLE 29, CHAPTER XIV CODE OF FEDERAL REGULATIONS

Subpart B--Employer Information Report

§1602.8 Penalty for making of willfully false statements on report

The making of willfully false statements on Report EEO-1 is a violation of the United States Code, Title 18, section 1001, and is punishable by fine or imprisonment as set forth therein.

That said, there is nothing in 1001 that provides for the voiding of contracts since it is a criminal statute. But, you may be able to use the concept of "unilateral mistake" as grounds for reforming the new contract to reflect the terms of the original version.

Pennsylvania follows the Restatement view concerning unilateral mistakes. According to the Section 153 of the RESTATEMENT (SECOND) OF CONTRACTS: Where a mistake of one party at the time a contract was made as to a basic assumption on which he made the contract has a material effect on the agreed exchange of performances that is adverse to him, the contract is voidable by him if he does not bear the risk of the mistake under the rule stated in § 154, and (a) the effect of the mistake is such that enforcement of the contract would be unconscionable, or (b) the other party had reason to know of the mistake or his fault caused the mistake.” RESTATEMENT (SECOND) OF CONTRACTS § 153 (1981).

See this case.

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Customer: replied 8 months ago.
I was hoping to void the Fed contract on public policy grounds since the statute was violated. I realized no criminal penalties would result here, since the statue of limitations would have lapsed anyway.. Under the doctrine of incorporation by reference, I hoped that the Fed contract would not be a valid and binding contract since the consideration was significantly misstated intentionally, and therefore, could not be incorporated by reference into the company settlement. Therefore, both would fail. I'm hoping to get these voided . If the Fed contract had incorporated by reference the company settlement, then I think both would have been valid, but it didn't. I believed incorporation by reference referred to legal documents, but these two wouldn't be legal because both consideration provisions are significantly incorrect. Initially, I had been responding directly to your e-mails, so my messages were not getting through. I didn't understand how things worked on this site.
Expert:  Maverick replied 8 months ago.

Again, for $13.00 more, I think it may be helpful for us to do a phone call given the amount of money at stake. Please look for a spot on your screen to accept that and then type in your phone number so I can call you....

Customer: replied 8 months ago.
I apologize for not getting back to you earlier. I poured boiling water on my hand while making a cup of tea. This put a couple of fingers out of commission. There is no dispute over the settlement amount. It was 100000 dollars. The first set of contracts correctly stated the amount in the Fed agreement and the company agreement incorporated it by reference. The company agreement was signed and notarized (the Fed agreement was never sent for signature). Then came the bait and switch. The company said there was a problem with the date (there wasn't) and said another copy would be sent. This one split the settlement amount over both documents (also not sent at the same time). This was a distraction from the real game. Under the terms of the rejected document I was liable for income taxes but not FICA. The second set rewrote the payment provisions in such a way the payment would be treated as wages. Since there was no problem with the date on the first one (We merely crossed out the incorrect month, which had been typed by them, although not the year, and wrote in the correct one), and a different contract was sent, I consider this to be no less than fraud which cost me 7000 dollars. I feel this contract is voidable by me, and both should also fail because neither meets the consideration requirement for a valid contract. If each had incorporated by reference the other, it would have been a different story, but this was not the case. You may feel no attorney would deliberately lie and cheat, but this company is different. Nobody looked at the fine print, including me and my attorney because we were not notified of any changes. I saw the settlement being split up, but didn't discover the other matter until I took the documents to a CPA this year after tax season.. Normally this is treated as other income, but he pointed out it could be taxed as wages because of the wording. This was not the case for the rejected document. I feel the company rejected the first contract I signed, the second set was signed under a lack of informed consent due to fraud, and the second set isn't drawn up properly. I'm sure there will be more questions, but eventually truth will prevail.
Expert:  Maverick replied 8 months ago.

Okay.

Customer: replied 8 months ago.
What does OK mean? If I am wrong about my arguments, please provide PA law citations.
Expert:  Maverick replied 8 months ago.

Maybe another expert can assist you better....

Expert:  Law Educator, Esq. replied 8 months ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
I am a DIFFERENT CONTRIBUTOR, as your previous contributor had to leave.
If the deal was for $100,000 and not $10,000, the employer changing any agreement to reflect less than the $100,000 or changing the terms of the original agreement would void the agreement under contract law as the agreement was not what the parties intended. Furthermore, if your attorney did not check the agreement, legally this could be deemed malpractice on your attorney's part and it would be in his best interests to resolve this matter and get the proper contract terms and amount reinstated. If you file to invalidate these new improper contracts and the EEOC or court rules against you, then your attorney could be sued here for malpractice as it was their legal duty to you to check the new agreement sent over and not just blanketly have you sign it making assumptions they were the same and your attorney could be liable for any damages that negligent conduct caused you to suffer.
Customer: replied 8 months ago.
I am trying to treat these contracts as null and void. I intend to violate the provisions of these agreements once I get the green light. The settlement amount was 100,000 dollars. The corporate attorney put 10,000 dollars on the settlement agreement and 90,000 dollars on the Fed agreement and incorporated it by reference to the settlement agreement. She did not incorporate by reference the settlement agreement to the Fed agreement. Therefore, I think neither meets the requirements of a valid contract because of poor construction. The payment terms were also rewritten to allow for payment of FICA taxes even though she knew these were not wages. I could probably claim lack of informed consent due to fraud. I'm just looking for defenses in a breach of contract suit if they come after me. If her incorporation by reference fails, I'm in the clear. My attorney didn't check the second set of agreements because he and she previously worked at the same firm , and he trusted her. That's no excuse, but I can always use him to get to her. I know you'll have questions. Thanks.
Expert:  Law Educator, Esq. replied 8 months ago.
Thank you for your reply.
You cannot just violate the agreements, there is an agreement in which there appears to be a typographical or "scrivener's" error which needs to be corrected. You cannot just walk away from the contract without first filing in court to get the contract corrected, you have to give them an opportunity to cure the defect, if you do not that would be the defense to your claim of breach.
Customer: replied 8 months ago.
These were not typos. These were intentional misrepresentations.
Expert:  Law Educator, Esq. replied 8 months ago.
Thank you for your reply.
If they intentionally changed the settlement then you can treat them as void, but you would need to still end up in court fighting to prove they are void, because you know the company is going to insist on trying to enforce them, so be prepared to head to court and present your evidence that you attempted to get them to correct it in good faith and they refused and as such that proves it was intentional and voided the agreement based on lack of meeting of the minds.