Ensuring Enforceability of Separation and Release Agreements
The Sixth Circuit recently allowed an Equal Pay Act and Title VII pregnancy discrimination suit to proceed despite the fact that plaintiff signed an agreement releasing all claims and, did not turn back the severance payment given in consideration for the release. In McClellan v. Midwest Machining, Inc., the Court relied upon the United States Supreme Court’s analogous decisions in Hogue v. Southern R.R. Co. and Oubre v. Entergy Operations, Inc. to hold that a plaintiff is not required to tender back consideration received before filing suit under Title VII and the EPA.
The lawsuit was allowed to proceed, and enforcement of the release denied at this early stage, because plaintiff, who was pregnant at the time of termination, “was ‘blindsided’ by an unexpected meeting” to terminate her employment and felt “bullied” into signing the agreement. Plaintiff testified that the company’s president said she “needed to sign if [she] wanted any severance.” While plaintiff and the president reviewed the agreement together, plaintiff claimed she felt “pressured” into signing without a lawyer and later explained that she did not understand that the claims she released were discrimination claims. As such, it was possible for a jury to conclude that plaintiff’s execution of the release was not knowing and voluntary.
Ensuring that an employee enters into release agreements knowingly and voluntarily is of primary concern when presenting such agreements to employees. Using the Older Workers’ Benefit Protection Act language and format surely would help to show that the release was signed knowingly and voluntarily.