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United States District Court, Southern District of New York

May 28, 2003


The opinion of the court was delivered by: John Martin, District Judge.


Marti Vazquez ("Plaintiff") brought this action against Salomon Smith Barney ("Smith Barney") alleging that Smith Barney breached a negotiated settlement agreement the parties had executed with the Equal Employment Opportunity Commission ("EEOC") after Plaintiff had brought charges of race and sex discrimination against Smith Barney. In January 2002, the Court denied in part Smith Barney's motion to dismiss finding that the Plaintiff had sufficiently alleged a claim for breach of contract and that the breach of contract was based on Plaintiff's race in violation of 42 U.S.C. § 1981. Smith Barney now moves for summary judgment on the § 1981 claim and for partial summary judgment on the contract claim to limit Plaintiff's recovery to nominal damages.


In October 2000, Smith Barney, Plaintiff, and the EEOC entered into a negotiated settlement agreement concerning charges of sex and race discrimination and retaliation in violation of Title VII of the Civil Rights Act of 1964. In addition to monetary payments from Smith Barney to Plaintiff, Smith Barney agreed to require her supervisor, Alan Parsowith, a Smith Barney vice president, to undergo individual coaching on employee management and supervision. Smith Barney was responsible for monitoring the effectiveness of this program.

Although the settlement agreement required Parsowith to participate in coaching sessions relating to his managerial skills "for a minimum of one hour every week for a minimum of six months," it is conceded that Parsowith did not participate in one hour sessions once a week for six months. Rather, the person retained to coach Parsowith determined that the coaching sessions would be more effective if they were longer than one hour. Thus, although Parsowith received in excess of twenty-six hours of coaching over a six month period, he did not have a one hour session every week.

Smith Barney concedes that the question whether the substitution of longer but less frequent coaching sessions for the one hour per week session was a material breach of the settlement agreement presents an issue of fact which cannot be resolved on summary judgment. The parties also agree that a jury must decide whether the settlement agreement contemplated that Parsowith was to receive training with respect to gender and race discrimination. Smith Barney argues, however, that even if it breached the settlement agreement, there is no evidence that the breach was motivated by Plaintiff's race and, therefore, it is entitled to summary judgment dismissing Plaintiff's § 1981 claim. It also seeks a ruling that Plaintiff is entitled only to nominal damages on her breach of contract claim.


Plaintiff's § 1981 claim is premised on the assertion that Smith Barney has previously entered into and complied with EEOC-negotiated settlement agreements concerning sex discrimination with white individuals, but refused to comply with this settlement agreement because of Plaintiff's race. Smith Barney asserts that it has always complied with settlements it negotiated in employment discrimination cases and that, if there was a breach of its agreement with Plaintiff, there is no evidence that the breach was motivated by Plaintiff's sex or race.

Plaintiff contends that there is evidence that in three instances Smith Barney did not comply with settlement agreements it reached with minorities. However, the record does not support Plaintiff's claim.

Only one of the cited instances involved an agreement that required employee training. To support her claim that Smith Barney did not monitor this training as it agreed to do, Plaintiff cites the testimony of an in-house attorney at Smith Barney that she could not specifically recall that Smith Barney complied with certain of the contract's terms. (Pl. Opp at 7, citing Pl. Rule 56.1 Statement ¶¶ 69-71). However, this failure to recollect specific events that had occurred more than five years earlier is not affirmative proof that the events did not occur, particularly where the witness testified to her general recollection that Smith Barney fully complied with the agreement. (Whitman Decl. Exh. 4, Mintz Dep. at 26-28, 35-38, 41-44, 47-54, 58, 72-76).

The record relating to the other two settlement agreements with minorities to which Plaintiff refers is also insufficient to establish that Smith Barney materially breached its settlement agreements with either of these two former employees. (Def. Reply at 3-5; Pl. Opp. at 8).

Nor is there admissible evidence that anyone at Smith Barney who was responsible for the implementation of the settlement agreement with Plaintiff was motivated by racial animus. The conclusory allegation that one of these individuals discriminated against blacks without reference to any specific act of racial discrimination is not sufficient to prove that this individual intentionally discriminated against Plaintiff. (Def. Reply at 6; Okoronwko Aff. Exh. Y, ¶ 10).

Finally, the fact that the person responsible for arranging training for Parsowith did not construe the settlement agreement as requiring that he receive training specifically directed to race and gender discrimination is not evidence that he acted with a discriminatory intent, since the settlement agreement did not expressly require training related to race and sex discrimination. (Whitman Decl. Exh. 9 ¶ 7(a); Whitman Decl. Exh. 2, Vazquez Dep. at 182-183).

Since Plaintiff has failed to produce any admissible evidence that Smith Barney's breach of the settlement agreement was racially motivated, her claim under § 1981 must be dismissed.

With respect to the contract claim, Plaintiff points to no specific economic loss that she suffered as a result of the alleged breach of the agreement. Since the Court ruled in its previous opinion that punitive damages are not available in a breach of contract action, Plaintiff's only damage claim is for nominal damages.

Smith Barney also seeks a ruling that the Plaintiff is not entitled to attorney's fees on her breach of contract claim. It argues that, since there was no finding by the EEOC or the Court that Smith Barney discriminated against Plaintiff, the mere fact that it may have breached the settlement agreement does not provide a basis for awarding attorney's fees. It is well settled, however, that an action to enforce a settlement agreement entered into to resolve a charge of employment discrimination that has been filed with the EEOC is brought directly under Title VII. See, e.g., Snider v. Circle K Corp., 923 F.2d 1404, 1407-08 (10th Cir. 1991); Eatmon v. Bristol Steel & Iron Works, Inc., 769 F.2d 1503, 1513 (11th Cir. 1985); EEOC v. Henry Beck Co., 729 F.2d 301, 305-06 (4th Cir. 1984); EEOC v. Safeway Stores, Inc., 714 F.2d 567, 571-72 (5th Cir. 1983), cert. denied, 467 U.S. 1204 (1984); EEOC v. Liberty Trucking Co., 695 F.2d 1038, 1040 (7th Cir. 1982); Montalvo v. U.S.P.S., 887 F. Supp. 63, 65 (E.D.N.Y. 1995), aff'd, No. 95 Civ. 6251, 1996 WL 935448, *1 (2d Cir. Apr. 19, 1996); Evans v. Waldorf-Astoria Corp., 827 F. Supp. 911, 914 n. 1 (E.D.N.Y. 1993), aff'd, 33 F.3d 49 (2d Cir. 1994).

If an action for the breach of an EEOC settlement agreement is brought directly under Title VII, it follows that a Plaintiff who is successful in such an action is entitled to recover attorney's fees. See Christiansburg Garment Co. v. E.E.O.C., 434 U.S. 412, 417, 98 S.Ct. 694, 698 (1978) ("[U]nder § 706(k) of Title VII a prevailing plaintiff ordinarily is to be awarded attorney's fees in all but special circumstances").

Smith Barney cites E.E.O.C. v. Henry Beck Co., 729 F.2d 301, 306 (4th Cir. 1984) for the proposition that attorney's fees should not be awarded because there was no determination by the EEOC that Smith Barney had violated Plaintiff's Title VII rights prior to the time the parties entered into the settlement agreement. However, in the Henry Beck case, the Court noted that the EEOC's function as a conciliator "is central to Title VII's statutory scheme." Id. Thus, even though there has been no finding of a violation of Title VII, a plaintiff who successfully prosecutes a claim that the defendant breached a settlement agreement vindicates an important part of Title VII's statutory scheme and should be awarded attorney's fees. However, the Supreme Court has held that where a Plaintiff recovers only nominal damages, attorney's fees should not be awarded. Farrar v. Hobby, 506 U.S. 103, 116, 113 S.Ct. 566, 575 (1922).

Smith Barney also seeks a ruling that Plaintiff is not entitled to specific performance of the settlement agreement. However, the question whether specific performance should be awarded can best be determined after a full record is developed at trial and after it is decided whether Smith Barney was obligated to provide Parsowith with training concerning sex and race discrimination.


For the foregoing reasons, Smith Barney's motion for summary judgment dismissing Plaintiff's § 1981 claim and her claim for punitive damages is granted. In all other respects, the motion is denied.



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