The short answer is that it depends. Settlement agreements are generally enforceable if the terms of the agreement are clear and authorized by the litigants or parties to the litigation. In Gengaro v. City of New Haven (to be officially released December 29th), the Appellate Court had another opportunity to comment on the long standing law in Connecticut that "a compromise agreement . . . if free from fraud, mistake or undue influence . . . is conclusive between the parties."
In Gengaro, a trial court granted summary judgment in favor of the City concerning employment claims because Gengaro had signed a confidential settlement agreement prior to the lawsuit. Gengaro claimed he was forced to so sign the agreement because of threats of losing his job. He claimed undue influence to attempt to invalidate the settlement agreement. Gengaro claimed that he had serious financial and medical problems. Coupled with the threat of job loss, he claimed that he had no reasonable alternative but to agree to the settlement.
The trial court granted summary judgment finding insufficient issues of fact concerning undue influence. Essentially, the court concluded that the threat of losing his job was not sufficient for the exercise of undue influence. The Appellate Court agreed. For a good analysis of what employers should to to avoid these type of claims check of the Connecticut Employment Law Blog post on the case.
To establish undue influence in Connecticut, four elements must be established:
- a person is who is subject to influence
- an opportunity to exert undue influence
- a disposition to exert undue influence; and
- a result indicating undue influence
Relevant factors in the inquiry include age, physical and mental condition, whether the person had disinterested or legal advice, the consideration of value of the contracted for exchange, and active solicitations and persuasions by the other party.
In summary, undue influence is the exercise of control by one person over another in an attempt to destroy the person’s free agency and "constrain him to do something other than he would do under normal control…" Undue influence, if demonstrated, may invalidate a contract because the free assent of one party to the contract is lacking.
Settlements agreements are enforceable in court if the terms are clear and authorized by the parties. Attempting to invalidate the agreement by showing undue influence, fraud, or mistake are difficult claims to make. The take away here is to carefully review your settlement agreements with counsel because once you sign an agreement, it is likely to be enforced absent special factors.