Rivera

I. FACTS AND PROCEEDINGS

In October 2002, Rivera filed a complaint against Baker alleging: (1) that he was subjected to a hostile work environ- ment as a result of discrimination based on his race and national origin; (2) that he was wrongfully terminated by Baker; and (3) that his employer subsequently provided unfa- vorable references, all in violation of 42 U.S.C. §§ 1981, 1983, 1985, 2000e-2, 2000e-3, and 2000e-16. The parties 16290 RIVERA v. BAKER WEST, INC. appeared before a magistrate judge for a settlement confer- ence and reached a settlement agreement. The executed settle- ment agreement provided in Section I that Baker would pay Rivera the “sum of forty thousand ($40,000) less all lawfully required withholdings.”

Baker issued Rivera a check in the amount of $25,140, retaining $14,860 as a “lawfully required withholding.” The amount withheld included $10,000 in federal income tax, $3,060 in Federal Insurance Contributions Act (“FICA”) tax, and $1,800 in state income tax. Baker then filed a motion for dismissal with prejudice because Rivera cashed the $25,140 settlement check but had not dismissed his claims. Rivera opposed the motion, arguing that the…