Adams v. Philip Morris, Inc.

• Citation: 67 F.3d 580
• Decision Date: 12 January 1996
• Docket Number: No. 94-5608,94-5608
• Parties: 67 Empl. Prac. Dec. P 43,755, 19 Employee Benefits Cas. 2059 John O. ADAMS, Plaintiff-Appellant, v. PHILIP MORRIS, INC., Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

Page 580

67 F.3d 580

67 Empl. Prac. Dec. P 43,755, 19 Employee

Benefits Cas. 2059

John O. ADAMS, Plaintiff-Appellant, v. PHILIP MORRIS, INC., Defendant-Appellee.

No. 94-5608.

United States Court of Appeals Sixth Circuit.

Argued April 13, 1995.

Decided Oct. 18, 1995.

Rehearing Denied Jan. 12, 1996.

Ronald D. Ray (argued and briefed), Louisville, KY, for Plaintiff-Appellant.

Douglas W. Becker (argued and briefed), and David P. Haick (briefed), Becker, Farris & Gallagher, Louisville, KY, for Defendant-Appellee.

Before: MERRITT, Chief Judge; KEITH and WELLFORD, Circuit Judges.

WELLFORD, Circuit Judge.

Plaintiff John O. Adams, a white male approximately fifty-five years of age, brought an Age Discrimination in Employment Act (ADEA) claim and a reverse discrimination claim based on race against Philip Morris, Inc. ("PM"), his former employer. He alleges that PM failed to consider adequately his application for reemployment after having entered into a termination agreement providing for special severance pay. The district court granted defendant's motion for summary judgment based on a broad, general release signed by Adams at the time of his separation from employment. We AFFIRM in part and REMAND in part.

I. OVERVIEW

Adams began work at PM's cigarette manufacturing plant in Louisville in 1980. During his nine-and-a-half-year tenure with the company, Adams worked as a mechanical supervisor responsible for the maintenance of the company's high speed cigarette manufacturing machines. Several letters of recommendation on behalf of Adams favorably describes his work for the company.

On January 29, 1990, PM announced a layoff of 52 employees, including Adams, at the Louisville plant. Adams, and the others affected, were offered severance packages that included salary continuation, health insurance coverage for an extended time, and certain other benefits. In addition, these workers were offered enhanced severance packages if they signed a general release of liability. Adams chose to accept the enhanced package and, as a result, received approximately twice the amount of salary continuation, benefits for a period of approximately eighteen months instead of sixteen weeks, and certain employment assistance, including financial aid of up to $5,500. Adams signed the following release on January 29, 1990:

KNOW ALL PERSON BY THESE PRESENT, THAT I, John O. Adams, residing at 1212 Weible Road, Crestwood, Kentucky, 40014, for and in consideration of severance pay in the amount of $32,767.00 payable in form of salary continuation ... and a lump-sum payment of 3,542.00 Dollars for accrued but unused vacation, ... together with continued benefit coverage ... [and] outplacement assistance, release, remise and forever discharge Philip Morris Companies, Inc.... of and from all and in all manner of presently existing actions, causes of action, suits, debts, claims and demands whatsoever in law or equity arising from my employment with the Company....

The release also specifically acknowledged that Adams was "settling all claims which I have ever had or may have with the Company." In addition, the release contained a provision that stated: "[I] do hereby forever waive any and all right to assert any claim or demand for reemployment or tenure with the Company or for any benefits, etc., not specifically enunciated herein." ¹ Before signing this release, Adams had five days to consider whether to sign it and also had an opportunity to consult with an attorney.

A little more than a year later, on March 3, 1991, while still receiving extra benefits, Adams read a local newspaper notice advertising what appeared to be his former position. Adams contacted Hayes, a friend who was a production supervisor with PM, who told him that a position had become open after another employee, Frank Zanchi, had left the company. The production superintendent for the plant told Adams that he was eligible to apply for the open position, and that he would "have a leg up on anybody else that applies."

Adams then applied, but the job was awarded to a young, black candidate, who Adams claims, had "no experience with high speed cigarette machines." Adams then filed a complaint with the EEOC, alleging age discrimination and reverse discrimination based on race, but the EEOC issued a no-cause response after investigation. Adams subsequently filed an action in district court.

The district judge granted the company's motion for summary judgment, concluding that the general release signed by Adams precluded any claims he might have against the company. The court noted that the settlement agreement was supported by adequate consideration, and that it had addressed the issue of reemployment by providing that Adams "waived any and all right to assert any claim or demand for reemployment...."

Adams has filed a timely appeal, and there is appellate jurisdiction pursuant to 28 U.S.C. Sec. 1291.

II. STANDARD OF REVIEW

We review a grant of summary judgment de novo. See Henegar v. Banta 27 F.3d 223, 225 (6th Cir.), cert. denied, --- U.S. ----, 115 S.Ct. 664, 130 L.Ed.2d 599 (1994). A party is entitled to summary disposition "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). All reasonable inferences are to be given to the non-moving party. Henegar, 27 F.3d at 225 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970)). We note, however, that

[w]hen a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleadings, but the adverse party's response ... must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.

Fed.R.Civ.P. 56(e).

III. KNOWING AND VOLUNTARY RELEASE

Although Adams does not directly challenge whether the release was knowingly and voluntarily executed, he alludes to this issue by suggesting that he "was forced to sign the general release" out of "extreme economic distress" and that he "was given a mere five days to sign and return the release." We ordinarily consider issues not fully developed and argued to be waived. See generally, Wright v. Holbrook, 794 F.2d 1152, 1156-57 (6th Cir.1986) (considering issue raised for the first time in reply brief to be waived). Because it is clear that this release was knowingly and voluntary executed, we take this opportunity now to resolve this issue.

We have recognized that under particular circumstances employers and employees may negotiate a valid release of ADEA and Title VII claims. Runyan v. National Cash Register Corp., 787 F.2d 1039 (6th Cir.), cert. denied, 479 U.S. 850, 107 S.Ct. 178, 93 L.Ed.2d 114 (1986). We have applied ordinary contract principles in determining whether such a waiver is valid, remaining alert to ensure that employers do not defeat the policies of the ADEA and Title VII by taking advantage of their superior bargaining position or by overreaching. Runyan, 787 F.2d at 1044-45. In evaluating whether a release has been knowingly and voluntarily executed, we look to (1) plaintiff's experience, background, and education; (2) the amount of time the plaintiff had to consider whether to sign the waiver, including whether the employee had an opportunity to consult with a lawyer; (3) the clarity of the waiver; (4) consideration for the waiver; as well as (5) the totality of the circumstances. See, e.g., Bormann v. AT & T Communications, 875 F.2d 399 (2d Cir.), cert. denied, 493 U.S. 924, 110 S.Ct. 292, 107 L.Ed.2d 272 (1989); Riley v. American Family Mutual Ins. Co., 881 F.2d 368 (7th Cir.1989).

It is evident, from Adams' correspondence in the record and his supervisory experience, that he was generally knowledgeable and aware of his rights. The waiver is plain and unambiguous, and easily understandable by someone of Adams' abilities. Adams had five days in which to consider whether to sign the waiver, and was advised by PM to consult with an attorney before doing so. By signing the waiver, Adams received approximately twice as much in termination benefits than he would have been entitled to under the normal severance package plans. Although he certainly felt some economic pressure to accept the attractive severance package and settle any potential claims he might have against PM, this pressure does not rise to the level of economic duress. Accordingly, we hold that the release was knowingly and voluntarily executed by Adams and we AFFIRM summary judgment for PM in this respect.

IV. EFFECT OF RELEASE AND SEVERANCE AGREEMENT

The language of the "general" release in this case is concededly very broad. Adams does not contend on appeal that the release is ineffective to waive his employment claims arising from the reduction-in-force; rather, he contends that the release is ineffective to waive his prospective claims arising from his reapplication with PM.

The Supreme Court has stated that "an employee's rights under Title VII are not susceptible of prospective waiver." Alexander v. Gardner-Denver Co., 415 U.S. 36, 51-52, 94 S.Ct. 1011, 1021, 39 L.Ed.2d 147 (1974). Although some courts have questioned whether this language was dictum in Gardner-Denver, ² we held that this statement precluded minority police officers in a consent decree from waiving their prospective rights under Title VII. Williams v. Vukovich, 720 F.2d 909, 926 (6th Cir.1983). ³ We agree with the other circuits that there is no reason to distinguish between ADEA claims and Title VII claims as to this issue. See Bender v. A.G. Edwards & Sons, Inc., 971 F.2d 698, 700 (11th Cir.1992). It is the general rule in this...