Gormin v. Brown-Forman Corp.

963 F.2d 323, 1992 U.S. App. LEXIS 13379, 59 Empl. Prac. Dec. (CCH) 41,558, 59 Fair Empl. Prac. Cas. (BNA) 110, 1992 WL 112580
CourtCourt of Appeals for the Eleventh Circuit
DecidedJune 15, 1992
DocketNo. 91-3410
StatusPublished
Cited by13 cases

This text of 963 F.2d 323 (Gormin v. Brown-Forman Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Gormin v. Brown-Forman Corp., 963 F.2d 323, 1992 U.S. App. LEXIS 13379, 59 Empl. Prac. Dec. (CCH) 41,558, 59 Fair Empl. Prac. Cas. (BNA) 110, 1992 WL 112580 (11th Cir. 1992).

Opinion

ATKINS, Senior District Judge:

Brown-Forman Corporation appeals from a district court order holding that all releases of claims under the Age Discrimination and Employment Act, 29 U.S.C. §§ 621-34, are invalid unless they are supervised by a court or by the Equal Employment Opportunity Commission. For the reasons that follow, we REVERSE the district court’s order and REMAND for a determination of whether the release in this case was made knowingly and voluntarily.

I. BACKGROUND

Brown-Forman Corporation (Brown-For-man) is a Delaware corporation with its principal place of business in Kentucky. Founded in 1870, it produces and markets several products, including Jack Daniel’s, Southern Comfort, and Korbel champagnes.

In November 1986, Brown-Forman initiated a reorganization plan to eliminate overlapping positions within the company. Because the plan called for the termination of a number of its workers, Brown-Forman implemented special procedures to notify the affected employees and developed special benefit packages to assist them during their search for new jobs. In addition, Brown-Forman gave the terminated employees the option of accepting an extra benefits package in consideration for a complete release of any claims the employee might have against the company.

William B. Gormin was one of the employees who was terminated in November 1986. Gormin’s severance package was described in a three-page document dated November 10, 1986. In exchange for executing a release of any claims against the company, Brown-Forman offered Gormin payments of $56,003.00, plus other benefits. Under the heading “Severance,” the first sentence of the document stated that receipt of this amount was contingent upon execution of the release:

You will receive 61 weeks of severance pay at your current base salary rate, if you accept the terms and conditions described below under the heading “Complete Release.”

[325]*325The document concluded with a section entitled “COMPLETE RELEASE,” which provided as follows:

By law, you are entitled to certain compensation and benefits upon your termination of employment. These obligations will, of course, be satisfied by Brown-Forman. On the other hand, the offer of additional benefits, for example the severance pay, is consideration for your complete and total release of all claims of whatever nature you may have against Brown-Forman, its subsidiaries, divisions, officers, agents or assigns, now or in the future (‘Brown-Forman’). If you have any questions concerning your legal rights, you should consult with legal counsel. Your acceptance of the terms and conditions of severance contained in this three page document will constitute a binding agreement....
******
I have read the terms and conditions of my termination of employment and fully understand my signature is a voluntary release of any claims of whatever nature I have against Brown-Forman.

Gormin had approximately three weeks from the date he received notice of the termination of his employment to decide whether to accept the extra severance benefits. He dated his acceptance of the written offer on November 19, 1986.

On July 13, 1988, Gormin filed a complaint alleging that Brown-Forman discharged him in violation of the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-34 (ADEA). Jack A. Adams and a group of other individuals filed a similar complaint against Brown-Forman on August 25, 1989. On September 29, 1989, the Equal Employment Opportunity Commission (EEOC) filed a complaint alleging that Brown-Forman discharged approximately 104 employees in violation of the ADEA. The district court later consolidated the three cases.

On November 1, 1989, Brown-Forman filed a motion to dismiss and for summary judgment against Gormin based on Gormin’s November 19, 1986 severance agreement, which included the release of any claims against Brown-Forman. In an order entered July 11, 1990, 744 F.Supp. 1100, the district court held that neither Gormin nor any other person could release an ADEA claim unless a court or the EEOC supervised the release.1 This appeal followed.

II. DISCUSSION

A. Validity of Unsupervised Releases of ADEA Claims

The appellant argues that the district court erred in holding that all unsupervised releases of ADEA claims are void as a matter of law. The appellees argue that because the ADEA incorporates the Fair Labor Standards Act (FLSA),2 which prohibits certain unsupervised releases, Congress intended that ADEA claims may not be released without supervision by a court or agency. The appellees also rely on recent congressional activity to support their argument. As discussed below, a recent decision by the United States Supreme Court and decisions by all the courts of appeals that have addressed the issue support the appellant’s contention that ADEA claims may be released without supervision by the EEOC or by a court.

The United States Supreme Court recently stated that

nothing in the ADEA indicates that Congress intended that the EEOC be involved in all employment disputes. Such disputes can be settled, for example, without any EEOC involvement. See e.g., Coventry v. United States Steel [326]*326Corp., 856 F.2d 514, 522 (3d Cir.1988); Moore v. McGraw Edison Co., 804 F.2d 1026, 1033 (8th Cir.1986); Runyan v. National Cash Register Corp., 787 F.2d 1039, 1043 (6th Cir.) [en banc], cert. denied, 479 U.S. 850 [107 S.Ct. 178, 93 L.Ed.2d 114] (1986).

Gilmer v. Interstate/Johnson Lane Corp., — U.S. —, 111 S.Ct. 1647, 1653, 114 L.Ed.2d 26 (1991). The appellees argue that the foregoing observation, which was unnecessary to the Supreme Court’s holding that age discrimination claims are subject to binding arbitration agreements, is dictum and therefore not binding on this court. Nevertheless, the Supreme Court’s language is persuasive not only for what it says, but also because it favorably cites the decisions of other circuits which have upheld unsupervised waivers of ADEA rights.

The Sixth Circuit addressed the issue in Runyan v. National Cash Register Corp., 787 F.2d 1039 (6th Cir.1986). In Runyan, the court recognized that the ADEA incorporates the FLSA and that certain FSLA claims cannot be released without supervision. Id. at 1041-43. However, the court rejected the argument that, like FSLA claims, all ADEA claims must be supervised. Id. at 1043. According to the Sixth Circuit, unsupervised releases of ADEA claims are valid if they are made knowingly and voluntarily. Id. A number of circuits have adopted the Sixth Circuit’s reasoning in Runyan

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963 F.2d 323, 1992 U.S. App. LEXIS 13379, 59 Empl. Prac. Dec. (CCH) 41,558, 59 Fair Empl. Prac. Cas. (BNA) 110, 1992 WL 112580, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gormin-v-brown-forman-corp-ca11-1992.