Madrid v. Phelps Dodge Corp.

Opinion

F I L E D United States Court of Appeals Tenth Circuit UNITED STATES CO URT O F APPEALS November 29, 2006 FO R TH E TENTH CIRCUIT Elisabeth A. Shumaker Clerk of Court

ED M U N D V . M A D RID ,

Plaintiff-Appellant,

v. No. 06-2106 (D.C. No. CIV-04-138 M V/AC T) PH ELPS D O D G E C OR PO RA TION; (D . N.M .) and CHINO MIN ES C OM PA N Y,

Defendants-Appellees.

OR D ER AND JUDGM ENT *

Before O ’B RIE N and BROR BY, Circuit Judges, and BRO W N, ** District Judge.

Plaintiff Edmund V. M adrid appeals from the district court’s grant of

summary judgment in favor of defendants. W e exercise jurisdiction under

28 U.S.C. § 1291 and affirm.

* After examining the briefs and appellate record, this panel has determined unanimously to grant the parties’ request for a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3. ** The H onorable W esley E. Brown, Senior District Judge, District of K ansas, sitting by designation. I. Background

From 1965 until 2002, M r. M adrid worked at defendant Chino M ines

Company in Hurley, New M exico. He was promoted to a supervisory position in

1972 and continued in that capacity for the remainder of his employment there.

Defendant Phelps Dodge Corporation owns and operates Chino M ines. In January

2002, Phelps Dodge implemented a reduction in force at Chino, which included

M r. M adrid, and offered an early-retirement benefit and severance package to

employees whose position had been eliminated (the 70/80 plan). The company

disagreed with M r. M adrid that he was eligible for the 70/80 plan because, in the

company’s view, his position had not been eliminated and his lay-off was

temporary. Instead, Phelps Dodge and Chino M ines offered a different package

to M r. M adrid in February 2002 consisting of enhanced unemployment benefits

and two retirement options. In order to receive that package, M r. M adrid was

required to sign an Agreement and General Release (Release) that included a

waiver of his claims against both companies, including claims arising out of his

employment or its termination, and a convenant not to sue.

M r. M adrid, who is Hispanic, refused to sign the Release and accept the

package “because he did not want to jeopardize his right and privilege to bring

suit against [defendants] for what he believed to be a discriminatory

reduction-in-force and severance process.” Aplt. Opening Br. at 7. He filed an

EEOC charge in M ay 2002 claiming that the refusal to offer the 70/80 plan to him

-2- was because he is Hispanic. The EEOC eventually issued him a right-to-sue letter

in September 2003.

M eanwhile, by letter dated November 8, 2002, John Fenn, President of

Chino M ines, informed M r. M adrid that he was now eligible for the 70/80

package because his job had finally been eliminated. The letter advised

M r. M adrid that he needed to schedule an appointment between November 18 and

November 27 to return to Chino M ines in order to be reinstated for one day and

receive his retirement package, which would include the Release that he would

have to sign. If those dates did not work for him, he was to call and see if Chino

M ines could select another date. M r. M adrid also received a letter dated

November 19, 2002, which indicates that it was accompanied by a copy of the

Release. The letter asked him to “return the completed forms no later than

November 27, 2002.” Aplt. A pp. at 312.

M r. M adrid went to Chino M ines on November 26, met with a human

resources employee, signed the five-page Release, and has been receiving benefits

under the 70/80 plan since December 2002. The Release he signed is five pages

long, 1 but the most relevant provision is paragraph nine, which reads in pertinent

part:

1 The record also contains a copy of the Release bearing only M r. M adrid’s signature that is dated November 19, 2002, see Aplee. App. at 12, indicating that he received it at least as early as that date. That copy is not signed by a representative of either defendant.

-3- Employee agrees not to bring any suit or claim against the Company or any of its related entities or individuals with respect to any matter, including those related to his employment with the Company or his separation from that employment. Therefore, Employee . . . forever releases the Company . . . from any and all claims, demands, liabilities, obligations, suits, charges, actions, and causes of action, whether known or unknown, past or present, accrued or not accrued, as of the date Employee signs this Agreement. The items released include, but are not limited to, matters relating to or arising out of his employment or separation from employment. Some examples of items released are claims under federal, state, or local laws, such as the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, [and] the Employee Retirement Income Security Act of 1974 . . . . This provision, of course, does not affect Employee’s rights, if any, to benefits under the Company’s benefit plans in accordance with the terms of those plans, or to make a complaint to any state or federal agency with respect to issues related to his employment with the Company.

Id. at 309.

M r. M adrid initiated the action underlying this appeal in December 2003,

several months after receiving the EEOC’s right-to-sue letter and more than a

year after signing the Release. In his second amended complaint, the operative

pleading in this case, he alleged that defendants engaged in a variety of

discriminatory and retaliatory acts, including certain job actions and their refusal

to give him the 70/80 plan. He also alleged that the discrimination was because

he is Hispanic and the retaliation was because he had complained of unlawful

treatment. He asserted claims under the Employee Retirement Income Security

Act, 29 U.S.C. §§ 1001-1461 (ERISA ), and Title VII of the Civil Rights Act of

1964, 42 U.S.C. §§ 2000e to 2000e-17 (Title VII). He also brought state-law

-4- claims for negligent misrepresentation, intentional misrepresentation, and breach

of contract. The parties stipulated to the dismissal of the state-law claims, and

defendants filed two motions for summary judgment, one on the ERISA claim and

one on the Title VII claim, each of which incorporated an earlier motion for

summary judgment that was based on the Release. The district court granted the

motions on the ground that the Release was valid and dismissed the claims and

action with prejudice. This appeal followed.

II. Standard of Review

“W e review the district court’s grant of summary judgment de novo,

applying the same legal standard used by the district court.” Hutchinson v. Pfeil,

105 F.3d 562, 564 (10th Cir. 1997). Summary judgment is appropriate “if the

pleadings, depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment as a matter of

law.” Fed. R. Civ. P. 56(c). W here, as here, a defendant seeks summary

judgment on the basis of an affirmative defense, the defendant

must demonstrate that no disputed material fact exists regarding the affirmative defense asserted. If the defendant meets this initial burden, the plaintiff must then demonstrate with specificity the existence of a disputed material fact. If the plaintiff fails to make such a showing, the affirmative defense bars his claim, and the defendant is then entitled to summary judgment as a matter of law.

-5- Hutchinson, 105 F.3d at 564 (citations omitted). “In determining whether the

defendant is entitled to summary judgment, we view all facts and reasonable

inferences therefrom in the light most favorable to the plaintiff.” Id.

III. Analysis

ERISA and Title VII claims may be waived by agreement but the waiver

must be knowing and voluntary. See Wright v. Sw. Bell Tel. Co., 925 F.2d 1288,

1291-93 (10th Cir. 1991) (holding that plaintiff knowingly and voluntarily waived

Title VII claims but not future ERISA claims). In determining w hether a release

is knowing and voluntary, a district court must consider the totality of the

circumstances, including seven factors:

(1) the clarity and specificity of the release language; (2) the plaintiff’s education and business experience; (3) the amount of time plaintiff had for deliberation about the release before signing it; (4) whether [p]laintiff knew or should have known his rights upon execution of the release; (5) w hether 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 employee exceeds the benefits to which the em ployee w as already entitled by contract or law.

Torrez v. Pub. Serv. Co. of N.M ., 908 F.2d 687, 689-90 (10th Cir. 1990)

(per curiam) (quotation omitted; alteration in original).

M r. M adrid raises four issues on appeal. First, he argues that he raised a

genuine issue of material fact concerning whether he knowingly and voluntarily

signed the Release. Second, he contends that the district court misallocated the

-6- burdens of proof and production that are established under 29 U.S.C. § 626(f),

which was promulgated by the Older W orkers Benefit Protection Act, Pub. L.

No. 101-433, Title II, § 201, 104 Stat. 978, 983-84 (1990) (OW BPA ). Third, he

claims that the district court did not afford him the benefit of all reasonable

inferences from the evidence and overlooked certain evidence. And fourth he

argues that the district court did not properly apply the waiver requirements of the

OW BPA to the provisions of the Release.

The district court conducted a thorough and detailed analysis of the record

and concluded that each of the seven Torrez factors w ere clearly met. The court

further concluded that M r. M adrid had not raised a genuine issue of material fact

as to any of those factors. W e agree with the district court’s analysis and need

not repeat it here. Although we are not persuaded otherwise by any of

M r. M adrid’s appellate arguments concerning the Torrez factors, including his

assertion that the district court drew unreasonable inferences against him from

evidence that the court considered, we will address his contention that the district

court overlooked certain evidence. W e also will explain why the provisions of

the OW BPA do not apply here and why the district court did not place the burden

of proof on M r. M adrid.

A. The district court did not improperly overlook evidence

M r. M adrid argues that the district court overlooked the deposition

testimony of David Brooks, director of human resources at Phelps Dodge, and

-7- Deborah Ore, a Phelps Dodge human resources clerk. According to M r. M adrid,

M r. Brooks and M s. Ore stated that they could not understand the Release, and he

contends that as the company’s own human resources employees, their inability to

understand the Release supports his allegation that he did not understand it. But

M r. M adrid mischaracterizes their testimony. M r. Brooks stated that he had never

seen the Release M r. M adrid had signed and that he was not qualified to interpret

the language because it was drafted by the company’s legal department. Aplt.

App. at 314, Brooks Dep. at 74:16-22, 77:9-19. M s. Ore stated that if an

employee had questions about the meaning of the terms and provisions of the

Release, she would point the employee to the hum an resources manager because

she was not qualified to explain the meaning of those terms and provisions. Aplt.

App. at 316, Ore Dep. at 6:2-24. The testimony of M r. Brooks and M s. Ore does

not show that they could not understand the Release, but only that they were not

the ones to interpret the language on behalf of Phelps Dodge. Their testimony,

therefore, does not assist M r. M adrid in establishing a genuine issue of fact as to

whether or not he understood or should have understood the language of the

Release. Thus, the district court properly omitted discussion of their testimony

from its decision.

B. The O W BPA and the burden of proof

M r. M adrid argues that the district court erred by not applying two

provisions of the OW BPA . The first provides that “[a]n individual may not waive

-8- any right or claim under this chapter unless the waiver is knowing and

voluntary[,]” 29 U.S.C. § 626(f)(1) (emphasis added), and sets forth certain

minimum requirements for determining whether a waiver is knowing and

voluntary, see id. § 626(f)(1)(A )-(H ). The reference to “this chapter” in

§ 626(f)(1) means Chapter 14 of Title 29 of the United States Code, which

pertains to the Age Discrimination in Employment Act of 1967 (ADEA). The

plain language of the statute, therefore, indicates that the minimum requirements

for a valid waiver set forth in § 626(f)(1)(A)-(H) apply only to ADEA claims, not

to other federal claims such as ERISA or Title VII. Consequently, the fact that a

waiver is invalid as to an ADEA claim because it does not meet the minimum

requirements established by § 626(f)(1)(A )-(H ) does not affect its validity as to

other types of claims. See Tung v. Texaco, Inc., 150 F.3d 206, 208-09 (2d Cir.

1998) (holding waiver was knowing and voluntary as to Title VII claim but not,

under the OW BPA, as to AD EA claim). M r. M adrid did not assert any AD EA

claims. The provisions of § 626(f)(1)(A )-(H ), therefore, were not applicable to

the district court’s analysis of the validity of the Release as to M r. M adrid’s

ERISA and Title VII claims. None of the cases M r. M adrid cites on page

nineteen of his appellate brief support his contrary view.

The second provision of the OW BPA on which M r. M adrid bases an

argument provides, in relevant part, that “[i]n any dispute that may arise over

whether any of the requirements of [§ 626(f)(1)(A)-(H)] . . . have been met, the

-9- party asserting the validity of a waiver shall have the burden of proving in a court

of competent jurisdiction that a w aiver was knowing and voluntary pursuant to

[§ 626(f)(1)].” 29 U.S.C. § 626(f)(3). M r. M adrid contends that the district court

contravened this provision by placing the burden on him to prove that the Release

was invalid.

Like § 626(f)(1), however, § 626(f)(3) is inapplicable to the validity of the

Release as to M r. M adrid’s ERISA and Title VII claims. But this does not mean

that M r. M adrid had the burden of proof. As w e pointed out above, defendants

bore the ultimate burden of proof because they sought summary judgment based

on an affirmative defense. See Hutchinson, 105 F.3d at 564; see also Torrez,

908 F.2d at 690 (vacating grant of summary judgment in favor of employer on

release issue because employee had established genuine issue of material fact).

Despite the fact that the district court did not explicitly state the controlling

summary judgment standard or analyze each party’s burden sequentially, it is

clear that the court did not place the burden of proof on M r. M adrid. Rather, the

district court discussed the evidence that affirmatively supported defendants’

burden to show that there were no disputed issues of material fact on any of the

Torrez factors and explained why M r. M adrid’s contrary arguments did not

demonstrate the existence of a material fact.

The examples M r. M adrid quotes from the district court’s decision do not

lead to a different conclusion. Addressing an alleged ambiguity in the language

-10- of the Release that preserved his right to bring claims to an agency, M r. M adrid

quotes the court’s statement that “Plaintiff has not convinced the Court that the

right to file an agency complaint suggests an exception to Plaintiff’s agreement

not to bring any suit or claim against the Company.” Id. at 276 (quotation

omitted). Although the use of the word “convinced” suggests a requirement of

proof, the entirety of the court’s discussion indicates that the court found there to

be no disputable issue that the two types of claims were separate and that the

language of the release, as distinct from M r. M adrid’s understanding of it, was

clear and specific.

The other quotes to which M r. M adrid points provide no assistance to him.

In considering M r. M adrid’s argument that he did not understand the Release

because of his education and lack of legal training, the district court stated that

“[t]here is no indication in the record, and Plaintiff does not allege, that his

education and business experience are below average.” Id. This language is

taken nearly verbatim from one of this circuit’s cases concerning a knowing and

voluntary release. See Wright, 925 F.2d at 1292 (“There is no indication in the

record, and W right does not allege, his education and business experience are

below average.”). The reference to “below average” education and business

experience in Wright does not describe a burden of proof for an employee

opposing a motion for summary judgment that is based on a waiver agreement.

Instead, it is merely a means of stating that there is nothing in the employee’s

-11- background suggesting a limited ability to understand the Release. Here, the

district court also described M r. M adrid’s educational background, which

included a high school diploma and one-and-one-half years at W estern New

M exico University, as well as certification classes he had passed for his job at

Chino M ines and the fact that he held the position of Contract Supervisor when he

was laid off. Aplt. App. at 276. It is clear that the district court determined that

M r. M adrid’s ability to understand the Release, like the plaintiff’s in Wright, was

not unduly limited by his educational and business experience, and that the court

did require M r. M adrid to prove that that experience was below average.

W e further disagree with M r. M adrid that the district court required him to

show that defendants had set an “absolute deadline” for signing the Release in

order to show that he had insufficient time to consider and sign the Release. The

district court simply characterized the two letters he received in November 2002

as not setting an “absolute deadline.” See id. at 277. The important evidence the

district court considered was M r. M adrid’s testimony that he knew he had

forty-five days to consider and sign the Release. See id. at 276. The district

court even sustained an objection to a leading question that was asserted during

M r. M adrid’s deposition that elicited contrary testimony. Id. at 277. Thus, the

district court did not require M r. M adrid to prove that defendants had set an

absolute deadline in order to avoid summary judgment but instead concluded that

-12- his testimony clearly showed his understanding that he had time to think over his

decision to sign the Release if he wanted to do so.

M r. M adrid’s final point on the burden of proof concerns the OW BPA,

which we have concluded is not relevant in this case. Therefore, we do not

address that point.

IV. Conclusion

The judgment of the district court is AFFIRMED.

Entered for the Court

W esley E. Brown District Judge

-13-