I have litigated the question of accord and satisfaction, and it can be complicated because it all boils down to what the parties intended. One big factor not mentioned above is whether the "Paid in Full" notation was on the front of the check or the back, where the endorsement goes. It is more likely to be considered an "accord and satisfaction" (meaning you would win the lawsuit) if it it on the back, above the employee's endorsement. The answer to your question is likely to depend on the specific facts.
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