The US 3 rd Circuit Court of Appeals ruled that US Magistrate Judge G. Donald Haneke was wrong when he required that plaintiff Margaret Uprichard sign a “settlement and release agreement” which included confidentiality and nondisparagement requirements before getting a severance payment from her employer Pfizer Inc, the Legal Intelligencer reported.
The proposed release agreement also stated that if Uprichard violated either of the provisions, she would be required to repay to Pfizer, as “liquidated damages,” all the money paid to her in the arbitration award.
“A district court has inherent authority to ensure that prevailing parties are able to enforce prior judgments. … However, this authority cannot extend to the imposition of substantive conditions on enforcement not previously encompassed in the earlier judgment,” Circuit Judge Dolores Sloviter wrote in the ruling.
According to court papers, Uprichard was working for Warner-Lambert Co. as a director of clinical research when Warner-Lambert merged with Pfizer Inc. in early 2000. After the merger, Uprichard’s job title was changed to “local clinical leader.” Unhappy with the new job, Uprichard submitted a “constructive termination eligibility form,” claiming a substantive change in job duties, and a request for severance benefits under Warner-Lambert’s enhanced severance plan.
When the company refused, the dispute went to arbitration and a panel of three arbitrators ruled in favor of Uprichard, finding that she had suffered “constructive termination” and ordering Pfizer to pay her more than $244,000 in severance benefits.
After a long sequence of legal maneuvering, both sides agreed to have the issue heard by US Magistrate Judge Donald Haneke. Haneke ordered that Uprichard’s judgment be increased to more than $255,000, and imposed the requirement that Uprichard sign Pfizer’s settlement and release agreement as a condition to receiving her money judgment.
On appeal to the 3 rd Circuit, Uprichard’s lawyers argued that Haneke had exceeded his authority by adding new provisions to the existing judgment.
Now the 3rd Circuit has agreed, finding that the motion before Haneke was brought under Rule 60(a) of the Federal Rules of Civil Procedure which is designed only to allow courts to correct “clerical mistakes.” Adding pre-judgment interest is a typical task under Rule 60(a), the court said, but the rule does not empower a court “to impose additional substantive requirements.”
The latest appellate court opinion is here .