DENNIS R WALSH, Complainant

TOM  A  ROTHE  S C, Respondent

An administrative law judge (ALJ) for the Equal Rights Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission makes the following:

That the administrative law judge's order is set aside and the matter is remanded for further proceedings.

Dated and mailed November 29, 2002
walshde . rrr : 164 : 9

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner

Laurie R. McCallum, Commissioner

In its petition for commission review the respondent argues that the order of dismissal has not provided it with the benefits for which it bargained during settlement negotiations, is based on an incomplete discussion by the parties of the terms which were to be more fully set forth in a written settlement agreement, and does not accurately reflect the terms of the settlement discussed by the parties at the hearing. The respondent maintains that the parties did not agree that, if they did not reach an agreement on the terms of a written agreement, an order of dismissal could be entered into based on a general discussion of terms at the hearing, and that the complainant's request for withdrawal was to be held pending execution of the written settlement agreement. The respondent also notes that the fact the settlement amount is set forth in the order deprives the parties of the confidentiality for which they had bargained.

The commission is unable to evaluate whether the terms of settlement as set forth in the administrative law judge's order accurately reflect the agreement of the parties at the hearing, since the settlement discussions in question took place off the record and are not subject to review by the commission. Moreover, even if the commission were able to evaluate the terms of the agreement, it would not consider it necessary or desirable to do so. The commission agrees with the respondent that setting forth the terms of a confidential settlement agreement in the administrative law judge's order or in a commission decision deprives the parties of the confidentiality for which they have bargained. Parties who enter into a confidential settlement agreement have a reasonable expectation that the terms of their agreement will not be made part of the public record. Further, the commission has no authority to enforce a private settlement between the parties, and its role in this matter is limited to a determination of whether or not a matter has been settled such that dismissal of the complaint would be warranted.

There are essentially two ways in which a settlement can result in the dismissal of a complaint. The first method is for the parties to put the terms of the settlement, one of which will presumably be the withdrawal of the complaint, into the record. The administrative law judge can then dismiss the complaint based upon the settlement agreement. The second method is for the parties to arrive at a confidential settlement that they do not want embodied in an order, after which the complainant submits a request to withdraw the complaint based upon having arrived at a confidential settlement. Where the parties seek dismissal of a complaint based upon a confidential settlement, the signed withdrawal form obviates the need for any discussion on the record of the terms of settlement.

The dismissal that was issued in this matter followed neither of the two courses outlined above. The parties negotiated a confidential settlement and, prior to the settlement being finalized, the complainant submitted a request to withdraw his complaint, with the understanding that the matter would be dismissed once the agreement was reduced to writing. The settlement was not reduced to writing, however, and the parties advised the administrative law judge that they were not able to agree on certain terms. Notwithstanding this, the administrative law judge dismissed the complaint based upon the terms of the settlement as he understood them, and upon the signed withdrawal form tendered by the complainant's attorney.

Although the parties indicated at the hearing that a settlement had been reached, it is clear that the matter was never finalized and that the parties are no longer in agreement as to its terms. It does not appear that the complainant has been paid any monies in furtherance of a settlement agreement or that any other terms of the purported agreement have been effectuated. Indeed, the only step that appears to have been taken in furtherance of the settlement is the complainant's submission of a signed "request to withdraw complaint" form to the administrative law judge at the hearing. Given the unique procedural posture of this case, a question arises as to how the withdrawal form should be treated.

The administrative code provides, as follows:

DWD § 218.03(7) WITHDRAWAL OF COMPLAINT. A complaint may be withdrawn at any time. A request for withdrawal shall be in writing and shall be signed by the complainant or by the complainant's duly authorized representative. Upon the filing of a request for withdrawal, the department shall dismiss the complaint by written order. Such dismissal shall be with prejudice unless otherwise expressly stated in the order.

The commission has held that, once the complainant or his or her representative has filed a written request to withdraw a complaint, the administrative law judge is obligated to dismiss the complaint. Lokken v. General Casualty of Wisconsin (LIRC, May 30, 2002); Gribbons v. Chart Industries Inc. (LIRC, March 26, 2002); Johannes v. County of Waushara Executive Committee Board of Supervisors (LIRC, November 1, 1993).

Given the above, filing a signed withdrawal form prior to having finalized a settlement agreement is tantamount to a seller turning over the title and keys to a car before the buyer has written the check. A complainant who does so takes the risk that the settlement will fall apart after he has already signed away his rights to pursue the matter. In this case, however, the commission is disinclined to order dismissal based upon the signed withdrawal form, since such a resolution is clearly contrary to the will of the parties and would run counter to the assurances given by the administrative law judge who presided over the settlement negotiations.

While the administrative rule cited above does not provide any exception to the requirement that the complaint be dismissed once a withdrawal form is tendered, there are circumstances in which the commission has concluded that no withdrawal was intended and has essentially treated the withdrawal form as not having been submitted. In Hatcher v. Larson (LIRC, Aug. 26, 1994), the commission set aside an administrative law judge's order dismissing a complaint where it concluded that the complainant's request for withdrawal was filed inadvertently and that he did not actually wish to withdraw his complaint. While, in the instant case, the withdrawal form was not signed inadvertently, in the sense that the complainant's attorney understood that it would ultimately result in the withdrawal of the complaint, there is reason to conclude that the complainant did not intend to file it when he did. At the hearing the administrative law judge made the following statement on the record:

"The parties have outlined the terms of the agreement to me and we have an understanding with respect to what the agreement is. They're going to reduce it to writing and get that completed before the end of the year. Mr. Healy will provide me with a letter once that's been done and I'll issue an order of dismissal based on the confidential settlement and withdrawal that's been provided to me in the file."

Thus, the administrative law judge led the complainant to believe that, although he had submitted a withdrawal form, the form would not be filed and the matter would not be dismissed until the settlement was reduced to writing. The assertion made by the respondent in its petition, that the complainant's request for withdrawal was to be held pending execution of the written settlement agreement, further demonstrates that this was, indeed, the understanding of the parties. Under these circumstances, the commission does not believe that the complainant intended to file a request to withdraw his complaint until after such time as the settlement was finalized, notwithstanding his attorney's signature on the withdrawal form and transmission of that form to the administrative law judge at the hearing.

Having concluded that, as of the filing of the petition for commission review, the parties had not settled the case, and that no withdrawal was intended, the commission decides that the dismissal of the complaint should be set aside and the matter remanded to the administrative law judge so that the hearing can be completed and a decision on the merits issued. In the event the parties are able to arrive at a mutually agreeable settlement prior to the hearing, a signed withdrawal form may be submitted. The filing of such a document will result in the immediate dismissal of the case, pursuant to Wis. Admin. Code DWD § 218.03(7).

cc: 
Attorney Howard T. Healy
Attorney William E. Hughes III

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