United States District Court, D. Oregon
Michael H. Simon United States District Judge
States Magistrate Judge Stacie Beckerman issued Findings and
Recommendation (F&R) in this case on October 20, 2017.
ECF 20. Judge Beckerman recommended that Defendant's
motion to strike under Rule 12(f) of the Federal Rules of
Civil Procedure and motion to dismiss under Rule 12(b)(6) of
the Federal Rules of Civil Procedure (ECF 7) both be denied.
the Federal Magistrates Act (“Act”), the Court
may “accept, reject, or modify, in whole or in part,
the findings or recommendations made by the
magistrate.” 28 U.S.C. § 636(b)(1). If a party
files objections to a magistrate's findings and
recommendations, “the court shall make a de novo
determination of those portions of the report or specified
proposed findings or recommendations to which objection is
made.” Id.; Fed.R.Civ.P. 72(b)(3).
those portions of a magistrate's findings and
recommendations to which neither party has objected, the Act
does not prescribe any standard of review. See Thomas v.
Arn, 474 U.S. 140, 152 (1985) (“There is no
indication that Congress, in enacting [the Act], intended to
require a district judge to review a magistrate's report
to which no objections are filed.”); United States.
v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en
banc) (holding that the court must review de novo
magistrate's findings and recommendations if objection is
made, “but not otherwise”). Although in the
absence of objections no review is required, the Act
“does not preclude further review by the district
judge sua sponte . . . under a de novo or
any other standard.” Thomas, 474 U.S. at 154.
Indeed, the Advisory Committee Notes to Fed.R.Civ.P. 72(b)
recommend that “[w]hen no timely objection is filed,
” the Court review the magistrate's recommendations
for “clear error on the face of the record.”
timely filed an objection (ECF 22) to which Plaintiff
responded (ECF 23). Defendant objects primarily to the
portion of Judge Beckerman's recommendation finding that
Plaintiff has stated claims for a violation of Oregon
employment laws, despite having resigned under a workers
compensation settlement agreement, and that the settlement
agreement does not bar those claims. Defendant does not
object to Judge Beckerman's recommendation to deny the
motion to strike. The Court has reviewed the F&R de
novo and agrees with Judge Beckerman's reasoning and
Defendant argues that Plaintiff's resignation was part of
a bargained-for settlement exchange, and she must therefore
be held to the full body of that bargained-for agreement.
Defendant argues that any misrepresentation made to plaintiff
regarding the continued availability of employment is
immaterial to the enforceability of the settlement agreement.
This is not true. As Judge Beckerman's recommendation
notes, federal district courts have authority to set aside
agreements that were induced by the misrepresentations of a
party. See, e.g., Matsuura v. Alston Bird, 166 F.3d
1006, 1012 (9th Cir. 1999) (“[T]he defrauded party has
not freely bargained, but has been induced to settle by
affirmative misrepresentations by the other party. Enforcing
such a settlement would undermine the policy of encouraging
voluntary settlement of disputes”), opinion amended
on denial of reh'g, 179 F.3d 1131 (9th Cir. 1999).
Here, Plaintiff has alleged that Wal-Mart misled her into
accepting the settlement agreement, which required her
resignation, by falsely claiming that modified duty was no
longer available for her. As such, Plaintiff has adequately
alleged that she has “not freely bargained but has been
induced to settle by affirmative misrepresentation.”
Should she prove Defendant's wrongdoing, this Court has
authority to set aside the settlement agreement.
Defendant argues that the F&R preserves a cause of
action-namely, that an ill-gotten settlement may be
overturned if that settlement was procured by lies-that
plaintiff does not assert. The F&R does not maintain a
cause of action that is not asserted by the Plaintiff.
Rather, in explaining that the Court may set aside a
settlement predicated on misleading statements, Judge
Beckerman explains that the settlement does not stand in the
way of Plaintiff asserting her employment law claims.
Plaintiff alleges that Defendant retaliated against her, in
violation of ORS 659A.40, and constructively refused to
reinstate or reemploy her, in violation of ORS §
659A.043 and § 659A.046, by misleading Plaintiff into
resigning her position. Because Plaintiff has stated a prima
facie case that Defendant's alleged misleading inducement
of the settlement agreement violated Oregon employment law,
that settlement agreement does not bar plaintiff asserting
that claim. Defendant's objection to the F&R cites no
authority to the contrary.
Defendant argues that Plaintiff does not state a cognizable
adverse employment action. Defendant's argument is again
predicated on the notion that, because Plaintiff consented to
her resignation under the settlement agreement, she cannot
allege any adverse action on the part of the employer.
Plaintiff has alleged, however, that Defendant took adverse
action by making a false statement about the availability of
modified duty, which Plaintiff relied upon to settle her
case. Taking Plaintiff's allegations as true, she cannot
be said to have fully consented to her resignation because of
Defendant's adverse action. Rather, Plaintiff alleges
that those misrepresentations amounted to a constructive
discharge, which is sufficient to support a claim for
violation of Oregon employment laws. Defendant's
objection to the F&R cites no authority to the contrary.
Defendant argues that Plaintiff has alleged no promise made
by Defendant that would support her claim for promissory
estoppel. Defendants object to Judge Beckerman's finding
as “contemplat[ing] that a threat or a lie is also a
legally binding promise.” ECF 22 at 4. Judge Beckerman
accurately describes Oregon law as recognizing that
“employees foreseeably relied on their employers'
promises by taking or remaining on the job.” Kraft
v. Arden, 2008 WL 4866182, at *12 (D. Or. Nov. 7, 2008).
Black's Law Dictionary defines a promise as “[t]he
manifestation of an intention to act or refrain from acting
in a specified manner, conveyed in such a way that another is
justified in understanding that a commitment has been
made.” Black's Law Dictionary (10th ed. 2014). In
Neiss v. Ehlers, the Oregon Court of Appeals
recognized a claim for promissory estoppel where a plaintiff
moved to a new town based on a promise of a job in a new
practice. 135 Or.App. 218, 221 (1995). In Roeder v.
Pacificorp Fin. Servs., the court recognized a claim for
promissory estoppel where the plaintiff turned down a job
offer in order to remain employed with his current employer.
2006 WL 3085619 (D. Or. Oct. 27, 2006). Here, Plaintiff
alleges that Defendant manifested an intention to eliminate
Plaintiff's modified duty. Promising to an employee that
a specified kind of employment will no longer be available,
causing that employee to give up certain legal rights, is not
meaningfully different from promising to an employee that a
specified kind of employment will continue to be available.
Here, Plaintiff, as a current employee of Wal-Mart, took
action in reliance on Wal-Mart's representation that
modified duty would no longer be available to her. Such
allegations are sufficient to state a claim for promissory
Defendant argues that the appropriate remedy for
Plaintiff's fraudulent misrepresentation claim is to set
aside the settlement. Defendant's final argument amounts
to a restatement of its prior arguments: the settlement
agreement bars relief under employment laws, and the only
viable claim is Plaintiff's claim for fraudulent
misrepresentation, the remedy for which is setting aside the
settlement agreement. For the reasons given above, Plaintiff
has stated claims under Oregon's employment laws.
Plaintiff is not, therefore, limited to relief in the form of
rescission of her settlement agreement.
the Court ADOPTS Judge Beckerman's Findings and
Recommendation, ECF 20. Defendant's motion to dismiss and
motion to strike (ECF 7) are DENIED.