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82-FEB N.Y. St B.J. 32
New York State Bar Journal
February, 2010
Klein=1 Varon=2 Greenberg"3
Eve I. Joanna R. Keith
Copyright © 2010 by the New York State Bar Association; Eve I. Klein, Joanna R. Varon, Keith Gr
NAVIGATING THE MURKY WATERS OF EMPLOYMENT
ANDRELEASES
Lawsuits. Clients cannot bear to live with them and hope to live without them. In the context of
employer often seeks to prevent lingation by a former employee through the use of a waiver
suf&h-.t an employee agrees to waive and all claims against his or her seen-te-be
enns4A-+4en, any
release the employer from from the employ-mt or termination Within t
any liability arising
centract law issues, this arrangement appears relatively straightforward. Hmveyav, the myriad
regulating the workplace have produced an array of varying
limita±ians on an empleyac's ability
waiver of employ-en± law claims. This article surveys the sta-h-ds that must be met under the
statutes, as well as those under New York state cmplayment laws, to achieve a valid waiver and
litigation.
General Waiver and Release
If an employee who signs a waiver later files a lawsuit, the -pleyer would argue that the court
because the employee waived the right to sue. The employee would typically respond, however,
enforceable because it is legally invalid. Before addre=ing the employee's substantive claim,
determine whether the waiver is valid. As a general rule, "[t]he validity of waivers of discriminatian
principles."I
according to ordinary contract law Ordinary contract law principles *33 require that
-G-~able.2
valüñtary and supported by consideration in order to be Similarly, "the severability
dat-4=ad principles."3
should also be according to contract law As a federal district court has noted
a knowing and valüñtary waiver of the right to sue is not void solely because it also r
sic
provision] .... "You don't cut down the trunk of a tree because some of its branches are
presence of a sickly [provision] does not render [a] [r]elease i-voluntary, unknowing, or oth
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policy."
void as a matter of public
vol=t=y,"
A waiver of an =ployee's Title VII rights must be knowing and though a release form
veaiving" VII.12
speciFe claims [that] an employee is in order to waive rights under Title In dete--hing
entered a release knaveingly and voluntarily, a number of circuit courts use a totality-of-circ-.:ts.ñces
jurisdictions."
slightly among One iteration of the test considers:
(1) the employee's educaden and h=i== experience; (2) the employee's input in neg:E:±g
settl==t; (3) the clarity of the agreement; (4) the amount of time the employee had fo
signing the release; (5) whether the employee actually read the release and consid-al its
it; (6) whether the employee was represented by counsel or consulted with an attorney
consideration given in exchange for the waiver exceeded the benefits to which the em
entitled enntract or and whether the employee's release was induced i-prep
by law; (8) by
part."
defendant's
Courts have found waivers invalid, for example, where the plaintiff "was not clearly advised of his
was not given a £. .t amount of time to review the release ... was also deprived of a
[, and]
release.""
negotiate the terms of the
Certain circumstances and practices in the procurement of waivers and releases of Title VII cl
Where evidence of fraud or undue influence exist or where enforcement of the agreement m
may
interest, the courts will take a closer look behind the scenes of the waiver and release agv--
challenging a co-p':±:d waiver and release of a Title VII claim is substantial. If a party to the agv
the terms of the release, the party "must come ferveard with specific evidence sufficient to raise a
release."16
of the
Notably, a release of a Title VII claim may not require an cmployee to waive his or her right to
limit the employee's right to testify, assist or participate in an inverEgeEen, hearing or proceeding
FLSA
Generally, whether retrospective or praspective, an employee's rights under the Fair Labor S+--d--d
purposes'
be abridged contract or otherwise waived because this would the of the statute
by 'nullify
policies it was designed to Atate ""
Howev~·, the waiver provision of the FLSA, found in §
rule."
an exca;Een to this general The section states in relevant part:
=!rf--
The Secretary is authorized to supervise the payment of the unpaid wages or
compensation owing to any ~=pleyae or employees under section 206 or section 207
agreement of any =ployee to accept such payment shall upon payment in full constitute
employee of any right he may have under subsection (b) of this section to such unpaid
compensation damages.2°
unpaid overtime and an additie-.el equal amount as liquidated
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Division.22
cmplayers voluntarily to accept settlements supervised by the Wage and Hour
The statute speaks specifically to the supervision of pay-ent, that is, only once an ag-eement has
occur.25
has been made, does it appear that waiver can In other words, until the -pleyee accepts
effectunted.24
payment of back wages is tendered, no waiver of FLSA claims has been As the U
Northern District of Illinois recently noted, an -pleyœ can waive his or her right to participate
right.25
action, as separate and apart from the individual
Should an employer choose to pursue an appme-d se**‰=±3 the employer should contact the
Wage and Hour Division of the Employment Su±.-± AC-at±ien of the U.S. Department of
and speak with an assistant director, who can guide the employer through that office's process
Generally, the process will involve a short invesdgeden by the office in order to ensure that the
not deprive the employee of his or her rights under the FLSA. A prudent employer should conside
appmval of an FLSA settlement the the empley- invite more
pursuing by Department, may scruti
practices than it might otherwise receive or desire. Another option is that a waiver of FLSA right
litigation.26
court in the course of
NLRA
The National Labor Relations Board (NLRB) has long held that an employee cannot waive his or
(NLRA).27
labor practice charge under the National Labor Relations Act As a general matter, the NL
file an unfair labor practice charge if an cspicyer interferes with their rights to organize; to fo
orgi-.izatian; to bargain collectively through representatives of their choosing; or to engage in othe
the purpose of collective bargaining or other mutual aid or pceteden. Pro.isis..s of severance
employee's ability to file an unfair labor practice charge to enforce such rights will be deemed unlawfu
ADEA
1990,28 Discr½
With the passage of the Older Workers Benefit Protection Act (OWBPA) of the Age
Act (ADEA) underwent substantial revisions to its waiver provisions relative to the other federal
The OWBPA outlines with the c=d4'-¬ for a waiver of ADEA rights and the man
specificity
process should proceed. It is important to note that a release of ADEA claims is not effective unless
statute."29
the
voluntary³°
The OWBPA requires an employee waiver to be kaGv.ing and in order to be valid, and
requirement.51
levels of cempE-ce with that The OWBPA "explicitly places the burden on the party
voluntary."'S2
a waiver to demonstrate that the waiver was 'knowing and The waiver must be
involvedSS
understood by the employee or, if multiple employees are signatory to the waiver, so
the average individual eligible to
participate."S' Furh-- the waiver must refer
"by specifically
ADEA;³5 rights.36
under the it cannot waive Add the in exchange
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Where a waiver of an employee's rights is d in a group-layoff the ADEA requires
m-A
req :ircE:-,
list."42
cmplayees what is known as "the birthday The birthday list provides empl
- relative to those selected and not selected for
'=4=='
so that the employee can m
=,
about the waiver of a claim of age discr =ª= the statute requires an -pleye to
Specifically,
*35 the individual in writing in a manner calculated to be understood by the average
as to --
participate,
(i) any class, unit, or group of indi.id-ds covered by such preg-·a-, any c'igibility factors
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 a
in the same job cless"- 4. . or organizatianal unit who are not eligible or selected for the
In a new set of administrative g.. 'E-- s dated the EEOC oth
July 15, 2009, addressed, among
factors."
variations in the way courts have interpreted the statute's "eligibility For example,
Division,""
c'igibi'i'y factors simply as "[a]ll persons in the Construction while other courts hav
require an explanation of the particular selection "criteria, such as job perth....-
A experience,
terminate."45
employer relied on in deciding who to
Finally, the absence of even one of the OWBPA's knowing and voluntarf factors may be sufficient
claims."
ADEA Courts have invalidated ADEA waivers, for example, where the emplage's waiver
ADEA,"
make any refewee to rights arising under the fails to provide job titles of others selected
waiver.®
fails to directly advise the employee to consult a lawyer before a
signing
If an employee's waiver of ADEA claims does not comply with the requh·ements of the OWBPA,
employee.5°
subsequent ADEA action by that
FMLA
An employee's ability to waive rights under the Family and Medical Leave Act (FMLA) has rece
revision of the federal reg±E that interpret the FMLA. Circuits have split over whether or not
rights5¹
interpreted to prohibit any waiver of FMLA without, presumably, a Department of Labo
process required to obtain FLSA waivers. Howeve, the revised regM - effective January 16
FMLA.52
waiver of praspcctive rights under the As a result, employees may waive retrospective
without Department of Labor or court approval.
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3. the -pleyee returns to work or applies for ree-play-ent in a timely manner after the
her service; and
4. the amployee has not been separated from service with a disq:mlifying
other-than-honorable canditions.
USERRA also requires e-playm to credit an e-playee's period of -En=ed service as active e-
eniculating the employee's "seniority and other rights and b-± de-d-ed by
seniority"
a
provide employees with the same non-seniority benefits it would provide to non-service members
absence.
Under USERRA, cmplayces are p=Mbited from veaiving their right to reemplayment, even if they
will not return to work. Employees may, however, waive their right to non-seniarity benefits (e.g.
provide the employer written notice of their intent not to return to employment fallaveing their un
e=pleyes'
these 14mitatians placed on the waiver of USERRA rights, at least one federal court,
opinian USERRA.54
has held that empl ces may waive all of their rights under
New York State Law Claims
workers'
Waiver and release of cc--pensation claims in New York is governed by § 32 of the
Law.55 claim.56
Under that section, a waiver is available only once an cmplayce has fded a In or
valid, a waiver agreement between "the clai=.--t or the deceased claimant's dependents and the
fund" Workers'
special disability fund ... or the aggregate trust must be approved by the Com
designee.58
The board will approve the agreement, unless:
(1) the board finds the proposed agreement unfair, unconsciannhle, or L-preper as a matter
the board finds that the prepesed agreement is the result of an h+-ti-ni depresentation
(2)
or,
-'--"
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Conclusion
The statutes, reg:1:E:-2, guidelines and caselaw discussed in this article d-s.d-ate a complex
must be traversed to achieve a valid waiver that courts and
ad- ve agencies
succ=é£1y
the various requirements to ensure a valid waiver and release is a simple and canaistent
Underlying
release is likely to be a lasting and valid agreement. Despite the degree of c-plexity involved in
releases -- if drafted and -- can be an effective and inexpensive for em
properly fairly relatively way
pot--tis"y expensive litigation.
Footnotes
"1 (RIKin.
EVE L KLEIN d._memorris
enm) is a partner with Duane Morris LLP and practices in
labor ielatiens and -le-mt litigation. For over 20 years, she has strategically advised clients abou
regarding laws and =galatious affecting the workplace.
"2
JOANNA R. VARON (JRV --norris.com) is an associate with Duane Morris LLP a
employment labor relations and employrnent litigatisn.
law,
"3
KEITH GREENBERG is a third-yc= law student at the UMymi*y of "ichigan Law School, who d
preparation of this article.
E.E.O.C. v. SunDance Rehab. Corp., 328 F. Supp. 2d 826, 838 (N.D. Ohio 2004), rev'd on other grou
2006) (citing Adams v. Philip Morris, Inc., 67 F.3d 580, 583 (6th Cir. 1995)).
2
Lancaster v. Buerkle Buick Honda Co., 809 F.2d 539, 540-41 (8th Cir. 1987).
SunDance Rehab. Corp., 328 F. Supp. 2d at 838.
Wastak v. Lehigh Health 342 F.3d 292 (3d Cir. (--3 c=itted).
Valley Network, 281, 2003) See
n* attemnted
Serv., 839 F.2d 664, 666 (Fed. Cir. 1988) ("Even ifan [c=ployee's] waiver of his right
that would not affect the validity of the other portions of the agreement.").
s
Hampton v. Ford Motor Co., 561 F.3d 709, 716 (7th Cir. 2009).
6
Rivera-Flores v. Bristol-Myers Squibb Ca:ibbea::, 112 F.3d 9, 12 (1st Cir. 1997).
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ll
Id. at 52 n.15.
12
Ha.-ptea, 561 F.3d at 716; see also Smith v. Amedisys Inc., 298 F.3d 434, 443 (5th Cir. 2002) ("There
under Title VII or federal enmmon law, that a release must Title VII or federal causes of action
specify
of a Title VII claim.").
13
Craig Robert Senn, Knowing and Voluntary Waivers of Federal Emp!c;-e ! Claims: Replacing the T
Certainty"
with a "Waiver Test, 58 Fla. L. Rev. 305, 307-308 (2006).
l'
Hampton, 561 F.3d at 716-17 (citations omitted).
15
Cole v. Gaming Entm't, L.L.C., 199 F. Supp. 2d 208, 213 (D. Del. 2002).
l'
Hampton, 561 F.3d at 716.
l'
EEOC v. Cosmair, Inc., L'Oreal Hair Care Div., 821 F.2d 1085, 1089-90 (5th Cir. 1987); see EEOC
Inc., 177 F.3d 448, 456 (6th Cir. 1999); EEOC v. Goodyear Aerospace Corp., 813 F.2d 1539, 1542-43
18
Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1352 (11th Cir. 1982) (internal citations =W-
19
29 U.S.C. § 216(c).
20
Id.;see, e.g., Niland v. Delta Recycling Corp., 377 F.3d 1244, 1247 (11th Cir. 2004).
21
29 U.S.C. § 216(b).
2²
Sneed v. Sneed's Ship½ilding, Inc., 545 F.2d 537, 539 (5th Cir. 1977) (--phis added) (internal citatio
23
29 U.S.C. § 216(c).
24
See, e.g., Sneed, 545 F.2d at 539 ("For there to be a valid waiver section 216(c) simply requires (a
accept the payment which the Secretary d-+---s to be due and (b) that there be 'payment in full."');
Stores, 679 F.2d at 1353 ("An employee who accepts such a payment supervised by the Secretary ther
suit for both the unpaid wages and for liquidated damages, provided the employer pays in full the b
United Consumers Club, Inc., 786 F.2d 303, 306 (7th Cir. 1986) ("When private disputes ar
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2'
See U-Haul Co., 347NLRBNo. 34, at *13, 347NLRB 375 (2006).
28
29 U.S.C. § 626(f).
29
Oubre v. Entergy Operadens, Inc., 522 U.S. 422, 428 (1998).
3®
See, e.g., Long v. Sears Roebuck & Co., 105F.3d 1529, 1534 (3d Cir. 1987).
31
29 U.S.C. § 626(f)(1).
³²
Am. Airlines, Inc. v. Cardcza Rodriguez, 133F.3d 111, 117 (1st Cir. 1998) (citing 29 U.S.C. § 626(f)(3)).
33
29 U.S.C. § 626(f)(1)(A).
34
Id.
35
29 U.S.C. § 626(f)(1)(B).
36
29 U.S.C. § 626(f)(1)(C).
37
29 U.S.C. § 626(f)(1)(D).
38
29 U.S.C. § 626(f)(1)(E).
39
29 U.S.C. § 626(f)(1)(F).
4®
Id.
41
29 C.F.R. § 1625.22(f)(iii)(B).
42 --
litterview by Susan Wornick with Robert Sanders, Regional Director Boston Office, Equal
C=Mssi inBoston,Mass.(Nov. 28, 2008).
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*'
Hodge v. N.Y. Coll. ofPodiatric Med., 157 F.3d 164, 167 (2d Cir. 1998).
48
Adams v. AirsEiÈéch Servs., Inc., 231 F.3d 414, 431 (7th Cir. 2000).
**
Am. Airlines, Inc. v. Cardoza-Rodriguez, 133 F.3d 111, 118 (1st Cir. ("Because American
1998)
employees to consult a lawyer before the election, we rule, as a matter of law, that American
making
under the OWBPA.").
so
Oubre, 522 U.S. at 428 ("[T]he release cannot bar the ADEA claim because itdoes not conform to the
51
See, e.g., Taylor v. Progress Energy Inc., 493 F.3d 454 (4th Cir. 2007); Faris v. Williams WPC-I,
2003).
52
29 C.F.R § 825.220.
53
29 C.F.R § 1002.152.
54
Jolley v. Dep't of Hous. & Urban Dev., 299 Fed. Appx. 966, 969 (Fed. Cir. 2008).
55 Workers' ("Workers'
N.Y. Comp-#ion Law § 32 Comp. Law").
56 Workers'
Comp. Law § 32(a).
57
58
N.Y. Comp. Codes. R & Regs. tit. 12, § 300.36 (N.Y.C.R.R) ("The agreement shall be reviewed b
Workers'
chair, a member of the board, or a Compensation Law Judge, who will make a det..±:±r
di=pprave the agreement.").
59 Workers'
Comp. Law § 32(b).
60 Workers'
Comp. Law § 32(c).
61
12 N.Y.C.RR § 300.36(b).
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waived her federal claims, she has also waived her claims under New York State and New York C
Laramee v. Jewish Guild for the Blind, 72 F. Supp. 2d 357, 360 (S.D.N.Y. 1999).").
66 Dised-
Id. By contrast, for example, the waivers of claims under the New Jersey Law Against
ci--ianous"
through a "totality of the analysis. See Blum v. Lucent Techs., Inc., 2005 WL 4044579,
May 30, 2006) ("[t]he proper standard upon which to evaluate a waiver of a claim under LAD [(Law
' circumstances'
the of the circumstances ...Under the of the standard, [the
'totality 'totality court]
factors: (1) the plaintiff's education and business experience, (2) the amount of the time the plaintiff
the agreement before it, the role of the plaintiff in the terms of the agreement
signing (3) deciding (4)
(5) whether the plaintiff was represented by or consulted with an attorney, and (6) whether the ce=id=E
the waiver exceeds cmployce benefits to which the employee was already entitled by contract or law.").
67
N.Y. Labor Law § 595 (2008) ("No agreement by an loyœ to waive his rights under this article sh
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