Long v. Sears Roebuck & Co.

Citation105 F.3d 1529
Decision Date11 March 1997
Docket NumberNo. 96-1264,96-1264
Parties72 Fair Empl.Prac.Cas. (BNA) 1860, 69 Empl. Prac. Dec. P 44,547, 65 USLW 2567, 20 Employee Benefits Cas. 2457, Pens. Plan Guide (CCH) P 23935G Thomas LONG v. SEARS ROEBUCK & COMPANY; Sears Merchandise Group. Thomas G. Long, Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Richard Z. Freemann, Jr. (argued), Philadelphia, PA, for Appellant.

Robert M. Goldich (argued), Rachel S. Lieberman, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, PA, for Appellees.

Cathy Ventrell-Monsees, Laurie A. McCann, Melvin Radowitz, American Association of Retired Persons, Washington, DC, for Amicus-Appellant American Association of Retired Persons.

C. Gregory Stewart, General Counsel, Gwendolyn Young Reams, Associate General Counsel, Vincent J. Blackwood, Assistant General Counsel, Jennifer S. Goldstein (argued), Equal Employment Opportunity Commission, Washington, DC, for Amicus-Appellant Equal Employment Opportunity Commission.

Ann E. Reesman, Robert E. Williams, Mary Chlopecki, McGuiness & Williams, Washington, DC, for Amicus-Appellee Equal Employment Advisory Council.

Before: MANSMANN and GREENBERG, Circuit Judges, and HILLMAN, District Judge. *

OPINION OF THE COURT

MANSMANN, Circuit Judge.

Thomas Long, a former Sears employee, appeals an order of the district court granting summary judgment in favor of Sears in an action filed by Long based in part on the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq., as amended by Title II of the Older Workers Benefit Protection Act of 1990 ("OWBPA"), 29 U.S.C. § 626(b). The main issue, one of first impression for us, concerns the effect of a release, drafted by Sears and executed by Long, by which Long purported to waive all claims, including those based on age discrimination, associated with his termination. The district court rejected Long's argument that the release was invalid because it failed to meet specific and detailed requirements of the OWBPA. The court declined to consider alleged deficiencies in the release, concluding that the document, even if flawed, was ratified when Long accepted and retained severance benefits paid to him following execution of the release. Reasoning that the ratified release operated to preclude all claims associated with Long's termination, the district court granted summary judgment in favor of Sears.

Because we are convinced that the ratification doctrine should not apply to a waiver of age discrimination claims which is invalid under the OWBPA and that Long should not be required to tender back severance benefits before proceeding with his age discrimination claims, we find that the grant of summary judgment with respect to these claims was inappropriate. We will, therefore, reverse in part the order of the district court relating to the ADEA claim. We will remand the non-ADEA claims for further consideration.

I.

The relevant facts, which relate primarily to Long's employment history with Sears, are undisputed. Long, who was born in 1936, had a thirty year history with Sears where, beginning in 1964, he worked in a variety of sales capacities. From the early 1980s Long was employed in Sears' Home Improvement Products and Services Division (HIPS). As a HIPS employee, Long, at different times, sold heating and air conditioning, siding, windows, and doors, although his primary responsibility was to sell roofing. By all accounts, Long's job performance was excellent and his earnings, based on straight commission, were in the neighborhood of $100,000 per year.

In 1992, Sears analyzed the HIPS division's economic performance and concluded that reorganization was warranted. In January 1993 Sears announced that its HIPS division, with the exception of one unit, would close nation-wide. HIPS employees were told that Sears would discontinue its home improvement services permanently and that it would lay off employees not transferred to other Sears positions by mid-April. Employees allegedly were promised that every effort would be made to place them elsewhere in the Sears organization and were told that placement preference would be given to long-term HIPS employees with satisfactory performance.

In February 1993 Sears offered Long and certain other employees a reorganization package which included severance benefits. In exchange for the package, eligible employees were asked to sign a "General Release and Waiver" which read as follows:

GENERAL RELEASE AND WAIVER I

In consideration of the benefits I will receive under the Sears Closed Unit/ Reorganization Severance Allowance Plan as described in the attached Benefit Notification form, I, _________________ hereby release, waive, and forever discharge officers, successors, and assigns from any and all actions, causes of action (INCLUDING, BUT NOT LIMITED TO, ACTIONS UNDER TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE AGE DISCRIMINATION IN EMPLOYMENT I have read this General Release and Waiver and understand all of its terms. I have signed it voluntarily with full knowledge of its legal significance. I have been given the opportunity to consult with an attorney but have chosen not to do so.

ACT, STATE CIVIL RIGHTS STATUTES, AND THE AMERICANS WITH DISABILITY ACT), damages or claims of damage of every character whatsoever by reason of my employment with Sears, whether known or hereafter discovered, including, but not limited to, my termination from Sears.

Date:____________________

/s/______________________

Written in capital letters across the top of the release was the following: "DO NOT SIGN THIS UNTIL YOU HAVE READ THE ATTACHED NOTICE."

The notice attached bore a heading which read: "IMPORTANT NOTICE: THIS NOTICE IS BEING PROVIDED TO SATISFY THE REQUIREMENTS OF THE OLDER WORKERS BENEFIT PROTECTION ACT." The notice itself provided that: 1) an employee would have up to forty-five days from receipt of the severance package to decide whether to sign the release; 2) the release was revocable for up to seven days following its execution and no severance payments would be made until this seven day period had passed; 3) a list was attached showing the birth dates and job titles of those to whom the package had been offered; and 4) if applicable, a list was attached which included a list of employees deemed ineligible to receive the package. The notice also contained a provision suggesting that the employee consult an attorney prior to signing the release and clarified that rights which might arise in the future would not be waived by signing the release.

Although he now alleges that he did not understand the terms or significance of the release, Long signed the document on March 18, 1993. He contends that he was pressured by his supervisor to sign and did so, in part, based upon his confidence that he would eventually be placed elsewhere in the Sears organization. Although he actively sought a transfer, Long was not offered another position; his last day of work was April 9, 1993. 1

On March 8, 1994, after having signed the release and receiving more than $39,000 in severance benefit payments, 2 Long filed charges of discrimination with the Equal Employment Opportunity Commission and the Pennsylvania Human Relations Commission alleging violations of the Age in Discrimination in Employment Act of 1967, 29 U.S.C. § 621-634, and the Pennsylvania Human Relations Act of 1955 ("PHRA"), 43 Pa. Stat. Ann. § 951-863. Long claimed that he was discriminated against based on his age because, following his layoff, Sears "retrained younger employees with less seniority" to work in other departments and, contrary to its representation, Sears "continued its Home Improvement Operations."

On January 10, 1995, Long filed a complaint in the district court claiming age discrimination under the ADEA and the PHRA. He also alleged that Sears violated Section 510 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1140, by terminating his employment to avoid further accrual and payment of pension benefits, and asserted state common law claims. 3

In response to Long's complaint, Sears filed an answer raising, among others, the following affirmative defense: "Plaintiff has waived and released all claims against [Sears]" and "Plaintiff ratified his waiver and released all claims against [Sears] by his Thereafter, Sears filed a motion for summary judgment, alleging that Long's claims were barred by the release. Specifically, Sears argued that the release satisfied the requirements of the OWBPA and that, in any event, Long had ratified the release, making it enforceable despite any statutory deficiencies. Long opposed this motion with facts alleged to demonstrate discrimination and filed a cross-motion for summary judgment contending that the release was invalid for failure to comply with the requirements of the OWBPA 4 and was void and unenforceable because it had been obtained by fraud. Long agreed to credit severance pay received against any damages awarded.

acceptance of and failure to return his severance payment."

On March 1, 1996, the district court granted summary judgment in favor of Sears on all claims without addressing Sears' compliance with the OWBPA. While the court recognized that "[w]hether the Sears release meets the facial requirements of the OWBPA is a question of fact not resolvable here by summary judgment," it concluded that summary judgment was, nonetheless, appropriate. In reaching this conclusion the district court relied on authority holding that releases which fail to conform to the OWBPA are merely voidable and, under traditional principles of contract law, may be ratified by retention of benefits received. Citing the decision in Wamsley v. Champlin Refining and Chemicals, Inc., 11 F.3d 534 (5th Cir.1993), the district court concluded that the ratification doctrine had survived the enactment of the OWBPA and...

To continue reading

Request your trial
72 cases
  • American Airlines, Inc. v. Cardoza-Rodriguez
    • United States
    • U.S. Court of Appeals — First Circuit
    • September 3, 1997
    ...For an employee's waiver of ADEA rights to be enforceable, it must be "knowing and voluntary." See, e.g., Long v. Sears Roebuck & Company, 105 F.3d 1529, 1534 (3d Cir.1997). Prior to the enactment of the OWBPA, courts split over how to determine whether a waiver of rights was knowing and vo......
  • In re Leslie Fay Companies, Inc.
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York
    • August 18, 1997
    ...F.3d 534, 539-40 (5th Cir.1993) (same), cert. denied, 514 U.S. 1037, 115 S.Ct. 1403, 131 L.Ed.2d 290 (1995); with Long v. Sears Roebuck & Co., 105 F.3d 1529, 1534 (3d Cir.1997) ("In light of the law as it now stands, we conclude that the ratification doctrine does not apply to ADEA releases......
  • DeJoy v. Comcast Cable Communications Inc.
    • United States
    • U.S. District Court — District of New Jersey
    • March 21, 1997
    ...of compensating victims of discrimination and deterring employers from discriminating against older workers. Long v. Sears Roebuck & Co., 105 F.3d 1529, 1541-42 (3d Cir.1997). The ADEA makes it illegal for employers to refuse to hire, to fire or to discriminate against an employee "with res......
  • Romero v. Allstate Ins. Co., CIVIL ACTION NO. 01-3894
    • United States
    • U.S. District Court — Eastern District of Pennsylvania
    • February 27, 2014
    ...Co., 862 F.2d 448, 451 (3d Cir. 1988) (citing Coventry, 856 F.2d at 523), superseded by statute as stated in Long v. Sears Roebuck & Co., 105 F.3d 1529, 1539 (3d Cir. 1997) (holding that the Older Workers Benefit Protection Act supersedes Cirillo with respect to the Age Discrimination in Em......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT