You be the judge: Can this employer enforce its general release?

October 31, 2012
By Eric B. Meyer on October 31, 2012 7:00 AM | | Comments
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Alright folks. Kindly remove your lawyer and HR hats for a moment and don the judicial robe and gavel.

Your Honor, what you must decide, based on the facts that I will lay out below for you after the jump, is whether the release that the Plaintiff-employee signed is enforceable, such that she is precluded from pursuing discrimination claims against her former employer, the Defendant. 

Click through if you're up to the task...

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Here are the facts:

  1. Plaintiff, a blue-collar worker who had worked for Defendant for several years, claims that her supervisor subjected her to unlawful discrimination. Plaintiff further alleges that Defendant failed to take any action when she complained. Accordingly, the Plaintiff had no choice but to resign.

  2. Plaintiff claims that she spoke with Defendant's Vice President of Human Resources and was told that if she signed a release waiving potential claims, Defendant would not contest Plaintiff's application for unemployment-compensation benefits.

  3. Defendant prepared and provided Plaintiff with a general Release that specifically included all claims of discrimination. The Release also contained the following certification: "EMPLOYEE certifies that she has read the terms of the Agreement and Release, that she understands its terms and effects and is executing it of her own volition. Neither the EMPLOYER nor its agents, representatives, or attorneys have made any representations to her about this Agreement and Release other than those contained herein." The Release further provides that plaintiff "has been advised to consult with an attorney prior to executing this Agreement and Release and has either done so or has freely chosen not to do so."

  4. Defendant's VP of Human Resources specifically instructed Plaintiff to take the Release home for review and legal consultation.

  5. Prior to signing the Release, Plaintiff telephoned a lawyer who told her not to sign the Release and not to resign.

  6. Still, Plaintiff returned to work the next day and indicated to Defendant's VP of Human Resources that she wanted to sign. Upon being reassured that Defendant would not contest Plaintiff's application for unemployment-compensation benefits, Plaintiff signed.

Here's the law:

You must consider seven factors when deciding whether the release is enforceable (no one factor is dispositive; rather, you must balance all of them):

  1. the clarity and specificity of the release language;

  2. the plaintiff's education and business experience;

  3. the amount of time the plaintiff had to deliberate about the  release before signing it;

  4. whether the plaintiff knew or should have known her rights upon execution of the release;

  5. whether the plaintiff was encouraged to seek, or in fact received benefit of counsel;

  6. whether there was an opportunity for negotiation of the terms of the agreement; and

  7. whether the consideration given in exchange for the waiver and accepted by the plaintiff exceeded the benefits to which she was already entitled by contract or law.

So, Your Honor, how do you decide this case? Is the Release enforceable such that Plaintiff is precluded from pursuing claims of discrimination? Let me know in the comments below. (I'll post the answer tomorrow).

Update: The answer is "no." The case is Monk v. Hirsch Industries, LLC (and the analysis begins on page 5 of the opinion).