Budro v . BAE Systems, et a l . 07-CV-351-SM 04/16/08 UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Carol A . Budro, Plaintiff
v. Civil N o . 07-cv-351-SM Opinion N o . 2008 DNH 081 BAE Systems Information and Electronic Systems Integration, Inc., Defendant
O R D E R
Plaintiff, Carol Budro, alleges that defendant, BAE Systems,
violated the Age Discrimination in Employment Act (“ADEA”), 29
U.S.C. § 621 et seq., by denying her employment opportunities
within the company because of her age, and by terminating her
after she complained. Defendant moves for summary judgment on
grounds that plaintiff waived any claims she might have had when
she signed a release and accepted a supplemental severance
package. Plaintiff objects. For the following reasons,
defendant’s motion for summary judgment is granted.
Standard of Review
Summary judgment “should be rendered if the pleadings, the
discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.”
F E D . R . C I V . P . 56(c). In reviewing summary judgment, the record
and all reasonable inferences therefrom must be scrutinized in
the light most favorable to the non-moving party. Am. Airlines
v . Cardoza-Rodriguez, 133 F.3d 1 1 1 , 116 (1st Cir. 1998). The
non-moving party, however, cannot rest on unsworn allegations.
Id. The non-movant must establish a trialworthy issue of fact by
presenting competent evidence that would enable a jury to find in
its favor. Id.
Background
Plaintiff was employed by defendant from 1972 until she was
laid off on August 4 , 2006. She claims that her termination was
actually in retaliation for requesting an alternative dispute
resolution (“ADR”) review of a claim of age discrimination.
Defendant asserts that plaintiff was laid off, along with 150
other employees, as part of a group workforce reduction plan.
Prior to her termination, plaintiff worked with a team
setting up a test lab. Her primary role involved acquiring
materials and equipment. According to plaintiff, once the test
2 lab was complete, her managers told her that there were no
employment opportunities available in the company that required
her skill set. Plaintiff claims that two supervisors
respectively commented “when are you going to retire?” and “at
this point you should retire.” In response, plaintiff contacted
BAE Systems’s Human Resources Department and requested
alternative dispute resolution with regard to a claim of age
discrimination. Plaintiff’s request for an ADR proceeding was
still pending when she was laid off two months later.
On July 3 1 , 2006, the Monday before plaintiff’s termination,
Barbara McGuire, a BAE Systems’s Human Resource Manager,
presented plaintiff with a letter of termination, a document
titled “BAE Systems Special Severance Pay Plan for the 2005
Reorganization” (hereinafter “the Plan”), and a document titled
“General Release of Claims” (hereinafter “the Release”). The
Release offered plaintiff two options:
I can elect to a ) receive the basic Severance Benefit provided under the Plan and retain my right to pursue whatever claims, if any, I may have against the Company; OR b ) receive the basic Severance Benefit plus the Supplemental Severance Benefit described in the Plan, which is greater in value than any severance benefit to which I am otherwise entitled, and sign this Release.
3 (Def.’s Mot. Summ. J. (document n o . 1 2 ) , Ex. B , at 1.) The terms
of the Release required plaintiff to waive all claims she might
have against her employer, and it specifically referred to claims
arising under the ADEA. The Release did, however, allow
plaintiff to challenge its validity. Plaintiff had 45 days to
review the Release. She signed it on August 4 , 2006, and
returned it to a BAE Systems Human Resources Manager the
following day. Based upon her election and waiver, plaintiff
received $1,937.60 in basic severance pay and $27,126.40 in
supplemental severance pay.
On November 2 1 , 2006, plaintiff filed an age-discrimination
claim with the New Hampshire Commission for Human Rights
(“NHCHR”) and the federal Equal Employment Opportunity Commission
(“EEOC”). The NHCHR denied plaintiff’s claim, specifically
relying upon the signed Release as the reason for its denial.
The EEOC, in turn, upheld the NHCHR’s denial. Upon receiving the
denial notices, plaintiff promptly filed this suit.
Discussion
Defendant argues that the General Release of Claims form
signed by plaintiff bars this suit for age discrimination under
4 the ADEA. The ADEA, as amended by the Older Workers Benefit
Protection Act (“OWBPA”), allows an employee to waive all claims
of age discrimination if a release is “knowing and voluntary.”
29 U.S.C. § 626(f)(1). Under the statute:
An individual may not waive any right or claim . . . unless the waiver is knowing and voluntary. [A] waiver may not be considered knowing and voluntary unless at a minimum- (A) the waiver is part of an agreement between the individual and the employer that is written in a manner calculated to be understood by such individual, or by the average individual eligible to participate;
(B) the waiver specifically refers to rights or claims arising under this chapter;
(C) the individual does not waive rights or claims that may arise after the date the waiver is executed;
(D) the individual waives rights or claims only in exchange for consideration in addition to anything of value to which the individual already is entitled;
(E) the individual is advised in writing to consult with an attorney prior to executing the agreement;
(F)(i) the individual is given a period of at least 21 days within which to consider the agreement; or
(ii) if a waiver is requested in connection with an exit incentive or other employment termination program offered to a group or class of employees, the individual is given a period of at least 45 days within which to consider the agreement;
5 (G) the agreement provides that for a period of at least 7 days following the execution of such agreement, the individual may revoke the agreement, and the agreement shall not become effective or enforceable until the revocation period has expired;
(H) if a waiver is requested in connection with an exit incentive or other employment termination program offered to a group or class of employees, the employer (at the commencement of the period specified in subparagraph (F)) informs the individual in writing in a manner calculated to be understood by the average individual eligible to participate, as to- (i) any class, unit, or group of individuals covered by such program, any eligibility factors for such program, and any time limits applicable to such program; and
(ii) the job titles and ages of all individuals eligible or selected for the program, and the ages of all individuals in the same job classification or organizational unit who are not eligible or selected for the program.
Id. § 626(f)(1).
The employer maintains the burden to prove that a release
meets each requirement. Id. § 626(f)(3). If one requirement is
missing, the release is void as to all ADEA claims. Oubre v .
Entergy Operations, Inc., 522 U.S. 4 2 2 , 426-27 (1998).
Accordingly, to be entitled to summary judgment, defendant must
“demonstrate that there [is] no issue of material fact as to
6 whether the [release] complied with each of the section 626(f)
requirements.” Am. Airlines, 133 F.3d at 117.
Plaintiff argues that the Release does not bar her claim for
retaliation. While she does not offer any specifics she does
draw the court’s attention to Faris v . Williams WPC-I, Inc., 332
F.3d 316 (5th Cir. 2003), in support of her argument.
In Faris, the plaintiff claimed that the defendant
retaliated against her for enforcing her rights under the Family
and Medical Leave Act (“FMLA”). The plaintiff argued that the
release she signed upon termination was unenforceable because it
violated federal regulations precluding employees from waiving
substantive rights under the FMLA. The court, agreeing with the
defendants, held that while the plaintiff could not effectively
waive her substantive rights under FMLA, she could waive any
claims she might have for retaliation based upon her exercise of
those rights. Faris, 332 F.3d at 321. Because plaintiff
knowingly executed a release waiving her retaliation claim, her
suit was barred. Id. at 322. To support its reasoning, the
court compared releases under the FMLA to releases under the
ADEA. Because a release of claims brought under the ADEA is
7 valid and not in violation of public policy, a release of FMLA
claims was also thought valid. Id. at 321. The decision in
Faris is not helpful to plaintiff.
Plaintiff signed a Release in which she waived all claims
she may have had against defendant, except for claims challenging
the validity of the Release itself. The only question remaining
is whether defendant has carried its burden to show that the
Release satisfied all of the section 626(f) requirements.
Subsection ( A ) . To meet the requirements of subsection ( A ) ,
the agreement must be between the individual and the employer and
be “written in a manner calculated to be understood.” 29 U.S.C.
§ 626(f)(1)(A). A release is “written in a manner calculated to
be understood” if it is “drafted in plain language geared to the
level of understanding of the . . . individuals eligible to
participate.” 29 C.F.R. § 1625.22(b)(3). The release should
avoid technical jargon and long, complex sentences. Id. §
1625.22(b)(4).
The Release meets the subsection (A) requirements. It is a
written agreement, between plaintiff and defendant, and defines
8 the rights plaintiff waived and the rights plaintiff retained in
clear, straightforward language. It also avoids “technical
jargon” and correctly informed plaintiff of her options. The
“Claims Released” section, for example, states:
Subject only to the exceptions noted in the previous paragraph [the “Claims not Released” section], I agree to waive and fully release any and all claims of any nature whatsoever (known and unknown), promises, causes of action or similar rights of any type (“Claims”) that I may now have or have had with respect to any of the Released Parties listed below. These Claims released include, but are not limited t o , claims either in law or equity that in any way relate to my employment with the Company or the termination of that employment
(Def.’s Mot. Summ. J., Ex. B , at 1.) The section goes on to list
potential claims arising under anti-discrimination laws including
the ADEA, federal employment laws, such as the Americans with
Disabilities Act, and other federal, state, and local laws.
Other sections of the Release are similarly worded and convey in
clear terms both the rights plaintiff waived and those she
retained.
While plaintiff does not make a focused argument about
whether the Release meets the “manner calculated” requirement,
she draws the court’s attention to Thomforde v . IBM, 406 F.3d 500
9 (8th Cir. 2005), and Syverson v . IBM, 472 F.3d 1072 (9th Cir.
2007). Thomforde and Syverson, however, fail to support her
case. The issue in both Thomforde and Syverson was whether a
release met the “manner calculated” standard. The releases in
those cases included both a “release of claims” section and a
“covenant not to sue” section. In Thomforde, IBM argued that the
two sections were distinct and served difference purposes,
because one section was intended to release the employer from all
ADEA claims while the other section was intended to preserve the
employee’s right to challenge the release’s validity. Id. at
503-04. According to the court, however, “one plausible reading
of the document reveals that the employee releases IBM from all
ADEA claims and agrees not to institute a claim of any kind
against IBM, except that the employee may bring an action based
solely under the ADEA.” Id. at 503. Because employees were not
expected to have a “clear understanding of the legal difference
between a release and a covenant not to sue,” the court held that
the release failed the “manner calculated” standard. Id. at 503-
04. Syverson, decided two years later, heavily relied on
Thomforde and reached the same conclusion.
10 The Release in this case differs significantly from the
releases in Thomforde and Syverson because this Release does not
have separate “release” and “covenant” sections. Additionally,
this Release does not confuse an employee’s substantive right
under the ADEA to challenge the validity of the Release with
other causes of action under the ADEA that the employee may
waive. Thus, this Release satisfies the subsection (A)
requirements.
Subsection ( B ) . To satisfy subsection ( B ) , a release must
specifically refer to claims available under the ADEA. In the
“Claims Released” section of the Release, plaintiff waived claims
under “the Age Discrimination in Employment Act, as amended,
including, but not limited to the Older Worker Benefit Protection
Act.” (Def.’s Mot. Summ. J., Ex. B , at 1.) Thus, the Release
satisfies this requirement.
Plaintiff argues, however, that defendant incorrectly
treated her pending ADR proceeding as a “claim” she released
rather than a “benefit” she retained under the terms of the
agreement. Plaintiff is incorrect. In a section titled “Claims
not Released,” the Release provides:
11 By this agreement, I am not releasing claims for benefits I may have under the Company’s other benefit plans (such as the pension or medical plan), any rights to benefits under applicable workers’ compensation statutes or government-provided unemployment benefits, any claims arising under federal or state securities laws that I may have as a shareholder of the Company, or any rights to enforce this Release, or any claims relating to the validity of this Release under the Age Discrimination in Employment Act, as amended.
(Id.) The claims plaintiff did not waive are claims for benefits
under defendant’s benefit plans. The Plan documents plaintiff
received with her termination letter notified her that the
benefits she received by signing the Release were in addition to
other “benefits” such as paid time off, COBRA, and 401(k)
contributions. The right to an ADR proceeding with respect to
her retaliation claim was not included in the list of “benefits”
that plaintiff retained. Additionally, because an ADR proceeding
is a method of resolving a claim, as opposed to a benefit,
plaintiff waived the right to an ADR proceeding with respect to
her pending claim when she released defendant from all of her
ADEA claims. Thus, plaintiff did not retain a right to continue
her pursuit of an ADR proceeding after she signed the Release,
since nothing remained to be resolved.
12 Subsection ( C ) . To satisfy subsection ( C ) , an employee may
only release an employer from past and present claims. The
“Claims Released” section of the Release only released defendant
from claims “that [plaintiff] may now have or have had.” (Id.)
Because the Release only released past and present claims and not
future claims, the Release meets the subsection (C) requirement.
Subsection ( D ) . To satisfy subsection ( D ) , an employee must
receive consideration in exchange for releasing the employer from
past and present ADEA claims. The consideration must be in
addition to that which an employee is already entitled to
receive. The Release offered plaintiff two mutually exclusive
choices: (1) decline to sign the Release, receive the basic
severance package, and retain the right to pursue any claims
against defendant, or (2) sign the Release, receive the basic
severance package, and a substantial supplemental severance
package, and release defendant from all past and present claims.
Plaintiff signed the Release and received $27,126.40 in
supplemental severance pay that she was not otherwise entitled to
receive. Thus, the subsection (D) requirement is satisfied.
13 Subsection ( E ) . To satisfy subsection ( E ) , an employee must
be advised, in writing, to consult with an attorney prior to
signing a release. The Release advised plaintiff not once, but
twice, to consult with an attorney prior to signing. The first
sentence “advised [plaintiff] to take this Release of Claims
home, read i t , carefully consider and consult with an attorney
prior to signing it.” (Id.) Later in the Release, plaintiff
acknowledged, by signing, that she had been “advised to consult
with an attorney prior to singing this Release.” (Id. at 3.)
Therefore, the subsection (E) requirement is met.
Subsection ( F ) . To satisfy subsection ( F ) , which applies
because defendant requested the Release in this case in
connection with a group termination plan, an employee must have
been given 45 days to review and consider the Release before
signing. In the first paragraph, the Release notified plaintiff
that it was to be signed and returned to Human Resources by the
45th calendar day from the termination date. Additionally, the
Release later notified plaintiff that she could “take up to 45
days from [her] employment termination date to decide whether to
sign this Release.” (Id.) Therefore, the Release satisfies the
subsection (F) requirement.
14 Subsection ( G ) . To satisfy subsection ( G ) , an employee must
have been offered a period of seven days from the date of
execution to revoke a release. The Release twice notified
plaintiff of her right to revoke. By signing the Release,
plaintiff acknowledged that: (1) she understood that she could
“revoke this Release within seven (7) calendar days from the date
of signing,” and (2) she would receive supplemental severance pay
provided that she did not “revoke this Release within the seven-
day revocation period.” (Id.) Thus, the subsection (G)
requirement is satisfied.
Subsection ( H ) . To satisfy subsection ( H ) , which applies
because defendant requested the Release in connection with a
group termination plan, defendant had to inform those laid off
about: (1) the group of individuals covered by the plan along
with applicable eligibility factors and time limits; and (2) the
job titles and ages of all individuals selected for the plan
along with the ages of all individuals with the same job title
who were not selected for the plan. Defendant satisfied both of
those requirements. On July 3 1 , 2006, five days before
plaintiff’s termination date, plaintiff received a copy of the
Plan, a letter informing plaintiff of her termination, and the
15 General Release of Claims form. The Plan included the
information required by this subsection. It explained the
eligibility factors and time limits for the Plan and listed the
ages of each person selected for the plan along with the ages of
others in the same job title not selected for the plan. Because
plaintiff received the Plan with the General Release of Claims
form, defendant satisfied this requirement.
Conclusion
Plaintiff was offered a release form for execution that met
all of the requirements of 29 U.S.C. § 626(f). Plaintiff’s
execution of that release was knowing and voluntary. Plaintiff
released defendant from all claims she might have had under the
ADEA. Therefore, defendant’s summary judgment motion (document
n o . 12) is granted. Because this order disposes of plaintiff’s
case, defendant’s motion to strike (document N o . 9 ) is moot. The
Clerk of Court shall enter judgment in accordance with this order
and close this case.
16 SO ORDERED.
____________ Steven J. McAuliffe Chief Judge
April 1 6 , 2008
cc: Carol A . Budro, pro se Linda S . Johnson, Esq. Charla B . Stevens, Esq.