I thought it might be interesting to post a real settlement offer that I made to the opposing party to settle an actual court case. Since this deals with real parties & litigation issues, I won’t include any information that could disclose the parties’ identities.

Nevertheless, despite confidentiality concerns, this post will give some insight into how attorneys deal with settlement negotiations. It’s purely intended as a way for business owners & operators to understand some of the “behind-the-scenes” aspects of court cases & litigation, & to hopefully stir up some discussion about the cost & value of dispute resolution. Also, this post isn’t intended to influence the outcome of any present or future cases. Consequently, I won’t publicly discuss whether our offer was accepted or whether the case is closed or pending.

It’s important to understand that in this particular case, thousands of dollars are at stake & we’re thousands of dollars apart in our settlement offers. Moreover, it’s crucial to recognize that with any case or negotiation, there’s no particular formula or methodology for determining:

  • how much to offer;
  • when to make an offer;
  • how long the offer will remain open (i.e., “on the table”); &
  • what strategic information to disclose to the other side.

In other words: Every case, attorney & party has its own idiosyncrasies that dictate the terms & conditions of a settlement offer & negotiations.

Here’s an offer we (my client & I) made to an opposing party in a wage, hour & overtime case :

We’re willing to settle for $5,000.  Here’s our rationale:

  • $2k for 20_ _ & $500 for 20_ _. This isn’t based on any logical conclusions about the hours claimed.  We can’t come up with any logical reconciliation of your version of what’s owed or worked versus our record of the hours worked (obviously, we’re contending we don’t owe Peter Parker anything). For whatever reasons, these inconsistencies are especially true for 20_ _. So, based on what we’ve been able to determine, $1,250 is reasonable considering that we don’t believe that Peter Parker is owed anything. This leaves $2,500 for attorneys’ fees & costs.
  • Attorneys’ fees are essentially all that’s at issue here. Otherwise, Peter Parker would have informally complained to J. Jonah Jameson about his wages or status or we would have received a demand  prior to the lawsuit. Instead, a lawsuit was immediately filed. So, in my opinion, without any attempt to informally resolve this matter prior to filing a lawsuit, you can’t claim any moral high ground. On the other hand, we’re willing to concede that we can’t claim the moral high ground either.
  • J. Jonah Jameson wants to go to trial. He’s disgusted with this process & feels that he’s owed some vindication. On the other hand, because I contend that neither party can claim the moral high ground, & because I contend that we have a 50/50 chance of winning at trial, he’s authorized me to make this offer.
  • Personally, I’m comfortable with putting J. Jonah Jameson on the witness stand. Even though he sometimes comes across as being abrasive, based on my impressions of Peter Parker, I think that J. Jonah Jameson will do fine in front of a jury, especially compared to Parker. This is one reason why I give us a 50/50 chance at trial.
  • J. Jonah Jameson & Peter Parker had a written agreement between them, & Peter Parker asked to be a contractor because, among other reasons, Parker didn’t want his soon to be ex-wife to be able to track his income. In other words, J. Jonah Jameson acted in “good faith.”
  • J. Jonah Jameson’s actions, based on his good faith beliefs & conduct might be enough to get 2009 eliminated via summary judgment (FLSA §255); i.e., JJJ’s conduct wasn’t willful.  So, at trial, we may only have to deal with 20_ _.
    • 20_ _ won’t be an issue due to JJJ’s revenues that year.
      • Explanation strictly for this post: The reference to revenues above refers to a gross revenues limitation that disqualifies a business from the federal Fair Labor Standards Act (FLSA).  
      • The reference to FLSA section 255 refers to the FLSA’s statute of limitations.
  • $5,000 limits our investment in this case to a reasonable amount of money, plus based on the circumstances, it gives both you & Parker a reasonable profit.
  • If you have any doubts about what we’re saying here, or if you believe that we’re just posturing, J. Jonah Jameson & I are willing to meet face-to-face, with both you & Parker, to explain our position. Obviously you’ll have the opportunity to do the same. This must be an off-the-record discussion.  We’re willing to discuss all matters related to Parker & J. Jonah Jameson’s relationship. We’ll be civil & courteous, but we’ll also be direct. Think of it like a mediation or conciliation with the outcome ($5,000) already decided & no 3rd party presence or intervention.

Sincerely,

Chuck Krugel