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SETTLEMENT
AGREEMENT BETWEEN THE AMERICAN INSTITUTE OF PHYSICS AND JEFF SCHMIDT
THIS SETTLEMENT
AGREEMENT (“Agreement”) is made and entered into as of February 20, 2006,
by and between the American Institute of Physics (“AIP”) and Jeff Schmidt
(“Schmidt”).
WHEREAS AIP employed
Schmidt at Physics Today magazine from March 17, 1981, through May 31,
2000;
WHEREAS AIP and
Schmidt disagree as to why AIP terminated Schmidt’s employment;
WHEREAS Schmidt has
criticized AIP on his website, http://disciplinedminds.com;
WHEREAS Schmidt has
instituted legal proceedings against AIP in Case No. 04-CV-3774 in the United
States District Court for the District of Maryland (“Legal Action”);
WHEREAS AIP has denied
and continues to deny each and every allegation raised in the Legal Action,
and in any other administrative proceeding commenced by or on behalf of
Schmidt and in any other document or statement whatsoever;
WHEREAS AIP and
Schmidt (collectively, “the parties”) wish to resolve this matter in accord
with their negotiations held in Washington, D.C., on July 19-20, 2005, and
February 2, 2006; and
WHEREAS AIP and
Schmidt have now agreed to settle fully and finally all differences between
them, including, but not limited to, all those claims that Schmidt has
asserted in the Legal Action;
NOW, THEREFORE, in
consideration of the mutual promises, covenants, agreements, and other
undertakings set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are acknowledged, the parties mutually
agree as follows:
I. DEFINITIONS
1. “Effective Date” means the date set
forth on the first page of this Agreement.
2. “AIP” shall be defined to include the
American Institute of Physics, Inc., (“AIP, Inc.”) and all currently or
formerly affiliated persons or entities including, but not limited to, any
present or former parent corporations, subsidiaries, divisions, affiliated
entities or employee benefit plans, their executors, officers, partners,
directors assigns or agents.
3. “Schmidt” shall be defined as Jeff
Schmidt.
II. AIP’S AND SCHMIDT’S OBLIGATIONS
1. AIP, Inc. shall pay to Schmidt within
fifteen (15) business days after the Effective Date of this Agreement, in
full satisfaction of all of Schmidt’s causes of action and claims for
damages, including his costs and attorneys’ fees, if any, the sum of [REDACTED] (“the Payment”), by means of certified check payable to
Howrey LLP, for which the appropriate 1099 form(s) will be issued; provided
however that upon timely notice to AIP, Inc. prior to such payment, payment
may be made to such other entities as Schmidt or his counsel may direct.
2. The Payment represents partial
consideration for a complete settlement, release and waiver of all claims of
each and any kind, including, but not limited to, claims of or for alleged
lost wages, benefits or other compensation, mental, physical or other
personal injuries, pain and suffering, attorney’s fees, costs and any other
relief that Schmidt may have in the Legal Action or any other proceeding
against AIP, Inc.; and,
3. In the event that any federal, state
and local taxing authority or court determines that taxes, interest and/or
penalties are due and owing as a result of the Payment, said taxes, interest
and/or penalties shall be the sole obligation and liability of Schmidt, who
agrees to hold harmless and to indemnify AIP, Inc. from any tax-related
liability. Schmidt shall be
responsible for the calculation, reporting and payment of any and all taxes
that might arise in connection with this payment and AIP, Inc. shall not be
liable for any taxes that might accrue or arise in connection with this
payment. Schmidt shall not seek
additional monies from AIP, Inc. for any taxes or other monies that may be
due or for any other reason whatsoever; and,
4. Nothing in this Agreement or the
furnishing of the consideration provided for herein shall be deemed or
construed at any time or for any purpose as an admission by AIP, Inc. of any
liability or unlawful conduct of any kind.
5. AIP, Inc. agrees that within fifteen
(15) business days of the Effective Date of this Agreement, AIP, Inc. shall
provide to Schmidt, through his counsel, a letter reinstating Schmidt to his
position as a Senior Associate Editor at Physics Today magazine, in
the form of Exhibit A.
6. Schmidt agrees that immediately
following receipt by his counsel of the letter of reinstatement referred to
in paragraph II (5) of this Agreement and no later than the end of the
business day on which said letter is received, he, through his counsel, shall
provide to counsel for AIP, Inc. a letter of voluntary resignation signed by Schmidt,
in the form of Exhibit B. AIP shall
thereafter treat Schmidt as it treats other employees who have voluntarily
resigned from employment. However,
Schmidt agrees not to seek future employment by AIP, Inc. The parties agree that Schmidt’s reinstatement
shall not entitle him to any employment or benefit rights incident to
reinstatement or to employment by AIP, Inc. beyond the moment of its
receipt. For purposes of benefit
calculations, Schmidt’s last day of employment by AIP, Inc. shall be
considered to be May 31, 2000.
7. AIP states as follows: Jeff Schmidt worked as a staff editor at Physics
Today magazine for 19 years. The
American Institute of Physics, Inc., which publishes the magazine, fired
Schmidt on May 31, 2000. Throughout
his 19 years of employment at Physics Today, Schmidt received annual
performance ratings that were, without exception, either “Meets job
requirements” or “Exceeds job requirements,” and his discharge was not
related to these ratings. Schmidt’s
employment was terminated because he claimed to have written a book on time
stolen from AIP. Schmidt received
much praise for his work from physicists and from his supervisors. AIP, Inc. agrees to provide an employment
reference for Schmidt consistent with these facts, in the form attached
hereto as Exhibit C.
8. [REDACTED]
9. Schmidt agrees that, within fifteen
(15) business days of the Effective Date of this Agreement, he will remove
from his website, http://disciplinedminds.com, documents concerning
the underlying litigation and Schmidt’s allegations of AIP, Inc.’s purported
wrongdoing. A complete list of all
documents to be removed from http://disciplinedminds.com is contained
in Exhibit D. Schmidt agrees that he
will not post these documents in the future on his or any other website or in
any other forum. Schmidt further
agrees that he will not cause or direct any other individual, group or entity
to post the documents listed in Exhibit D on any individual’s, group’s or
organization’s website or other forum.
10. The parties agree that, to the extent
that they cannot agree to a final version of Exhibit D as of the Effective
Date of the Agreement, they will submit all unresolved issues relating
thereto to binding arbitration by Mr. Harold Himmelman. The parties agree that counsel for AIP
shall submit a position paper relating to the outstanding issues to Mr.
Himmelman within seven (7) days.
Counsel for Schmidt shall submit a position paper within seven (7)
days of AIP’s submission.
III. DISCLOSURE AND RELATED PROVISIONS
1. AIP’s governing board members,
executives, officers, directors, managers and human resources department
personnel, and Schmidt agree to keep the terms of this Agreement
confidential, except as expressly permitted in this paragraph and elsewhere
in this Agreement. In no event shall
any party disclose the fact that there has been a settlement or any of the
terms of the Agreement until seventeen (17) business days after the Effective
Date of this Agreement. Each party may
disclose the terms of this Agreement to their immediate family members. The parties may disclose the terms of this
Agreement to their legal and/or financial advisors, or when otherwise
required by law; provided, however, that in the event that any such
information is disclosed, the parties agree that they will direct such person
to hold such information strictly confidential.
2. AIP and Schmidt understand and agree
that violation of this covenant of confidentiality will constitute a material
breach of this Agreement.
3. The parties agree that a public
version of this Agreement, in the form attached as Exhibit E, is not subject
to the confidentiality provision set forth in the Agreement.
4. Schmidt confirms that prior to
execution of this Agreement he did not discuss with or disclose to any third
party (with the exception of his attorneys, financial advisors or family
members) any terms of this Agreement.
IV. NON-DISPARAGEMENT
1. AIP’s governing board members,
executives, officers, directors, managers and human resources department
personnel, and Schmidt agree to refrain from disparaging this Agreement or
the other party on account of any event or circumstance relating to the Legal
Action occurring prior to the Effective Date of this Agreement. However, nothing in this Agreement is
meant to prevent Schmidt from quoting publicly from his book Disciplined
Minds. In addition, nothing in
this Agreement is meant to prevent AIP from criticizing Schmidt’s book Disciplined
Minds.
V. RELEASE AND DISMISSAL OF LAWSUIT
AND ALL CLAIMS OF ANY KIND
1. Schmidt hereby irrevocably and
unconditionally releases, acquits and forever discharges AIP, together with
all of its current and former officers, directors, employees, agents,
successors and assigns, from any and all complaints, demands, liabilities,
claims, damages, actions, causes of action, lawsuits and expenses, including
costs and attorneys’ fees, whether presently known or unknown, suspected or
unsuspected, specifically including, but not limited to, any alleged
violations of 42 U.S.C. (United States Code) Sections 1981, 1983, and 2000e et
seq., as well as any and all claims that were asserted or could have been
asserted in the Legal Action, any and all breaches of contract or of the
implied covenant of good faith and fair dealing, any detrimental reliance, as
well as any and all other claims of any nature arising out of Schmidt’s
employment by AIP or the termination of his employment by AIP, that Schmidt
now has, owns or holds, or that Schmidt at any time heretofore had, owned or
held against AIP. Schmidt
specifically confirms and covenants that any claim under the Age
Discrimination in Employment Act would be time barred.
2. Within fifteen (15) business days of
the Effective Date of this Agreement, Schmidt shall cause to be filed with
the United States District Court for the District of Maryland a stipulation
dismissing the Legal Action with prejudice.
3. AIP, Inc. hereby irrevocably and
unconditionally releases, acquits and forever discharges Schmidt from any and
all complaints, demands, liabilities, claims, damages, actions, causes of
action, lawsuits and expenses, including costs and attorneys’ fees, whether
presently known or unknown, suspected or unsuspected, that AIP, Inc. now has,
owns or holds, or that AIP, Inc. at any time heretofore had, owned or held
against Schmidt.
VI. DISPUTE RESOLUTION
1. The
parties shall use their best efforts to resolve by mutual agreement any
disputes, controversies or differences that may arise from, under, out of or
in connection with the Agreement. If
any such disputes, controversies or differences cannot be settled between the
parties, they shall be settled by final and binding arbitration to be
conducted by JAMS arbitration pursuant to the rules of the American Arbitration
Association. The parties agree that,
if he is available, Harold Himmelman, Esq. shall be selected to arbitrate any
dispute. Upon a finding that a party
breached this Agreement, the arbitrator may award actual damages plus
reasonable attorneys’ fees (up to $20,000 in damages and fees upon proof
acceptable to the arbitrator) to the prevailing party and no other relief,
provided, however, that there shall be no limit on damages that can be
awarded for violation of Section II ¶1.
The decision or award of the arbitration shall be final, and judgment
upon such decision or award may be entered in any competent court or
application may be made to any competent court for judicial acceptance of
such decision or award and an order of enforcement. In the event of any procedural matter not covered by the rules
of the American Arbitration Association, the procedural law of the state of
Maryland shall govern.
VII. MISCELLANEOUS MATTERS
1. The
parties acknowledge that this Agreement has been negotiated by the parties
and their counsel, and that in executing the Agreement, they have not relied
upon any representation or statement not contained herein, with regard to the
subject matter, basis or effect of the Agreement. This Agreement sets forth the entire agreement between the
parties, and fully supersedes all prior agreements or understandings between
the parties.
2. Schmidt has been given a reasonable
period of time to review this Agreement prior to the execution of this
Agreement.
3. At the time of considering and
executing this Agreement, Schmidt is competent to effect a knowing and
voluntary general and unlimited release of all claims, and to enter into this
Agreement. Schmidt is not a party to
any bankruptcy, lien, creditor-debtor or other proceeding that would impair
the right to settle all claims against AIP or to waive all claims that
Schmidt may have against AIP.
4. The provisions of this Agreement are
severable, and if any provision of it is found unenforceable, the other
provisions shall remain fully valid and enforceable.
5. This Agreement shall be interpreted
in accordance with the laws of the State of Maryland to create binding and
unlimited mutual general releases of all claims.
_______________________________, this _____
day of March, 2006.
Marc H. Brodsky
American Institute of Physics
_______________________________, this _____
day of March, 2006.
Jeff Schmidt
Acknowledging that this Agreement resolves all
claims for costs and attorneys’ fees on behalf of Schmidt, and attesting to
the authenticity of Schmidt’s signature:
_______________________________, this _____
day of March, 2006.
Patricia G. Butler
Erik T. Koons
Chad R. Murchison
Howrey, LLP
_______________________________, this ____ day
of March, 2006.
Warren Kaplan
Robert M. Bruskin
The Washington Lawyers’ Committee for Civil
Rights and Urban Affairs
Attesting to the authenticity of Brodsky’s
signature:
_______________________________, this ____ day
of March, 2006.
Wendy Mellk
Jackson Lewis
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