Runyan v. National Cash Register Corp.
| Decision Date | 07 April 1986 |
| Docket Number | No. 83-3862,83-3862 |
| Citation | 787 F.2d 1039 |
| Parties | 40 Fair Empl.Prac.Cas. 807, 39 Empl. Prac. Dec. P 36,000, 54 USLW 2522 Richard RUNYAN, Plaintiff-Appellant, v. NATIONAL CASH REGISTER CORP., Defendant-Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
C. Daniel Karnes, Glen D. Nager, Cleveland, Ohio, for amicus curiae Eaton Corp., Firestone Tire and Rubber Co., & TRW.
Samuel Estreicher, Cahill Gordon & Reindel, New York City, for amicus curiae Center for Public Resources in support of District Court Affirmance.
Paula J. Connelly, Nat. Chamber Litigation Center, Washington, D.C., for amicus curiae Chamber of Commerce of the U.S. in support of appellee (NCR).
Paul H. Tobias (argued), Tobias & Kraus, Cincinnati, Ohio, for plaintiff-appellant.
Armistead W. Gilliam, Jr. (argued), Smith & Schnacke, Dayton, Ohio, for defendant-appellee.
Douglas S. McDowell, McGuiness & Williams, Washington, D.C., amicus curiae EEAC.
Before LIVELY, Chief Judge and ENGEL, KEITH, MERRITT, KENNEDY, MARTIN, JONES, CONTIE, KRUPANSKY, WELLFORD, MILBURN, GUY and NELSON, Circuit Judges.
Richard Runyan appeals an order of the District Court for the Southern District of Ohio granting National Cash Register Corporation's (NCR) motion for summary judgment. The court dismissed Runyan's allegation that his discharge was discrimination in violation of the Age Discrimination in Employment Act of 1967 (ADEA), 29 U.S.C. Secs. 621-634 (1982). Applying Title VII analysis, the district court concluded that a general release knowingly signed by Runyan on November 25, 1977, was a complete bar to Runyan's ADEA claim, that a bona fide dispute existed respecting the reason for Runyan's termination, and that the consideration Runyan received for signing the release was adequate and not contrary to public policy. Runyan argued on appeal that his unsupervised release cannot bar his private ADEA cause of action because the ADEA incorporates the enforcement provisions of the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. Secs. 216, 217 (1982). A panel of this court agreed and reversed the district court. Runyan v. National Cash Register Corp., No. 83-3862 (6th Cir.Apr. 22, 1985). The panel majority held that a release of rights under the ADEA, unsupervised by the Equal Employment Opportunity Commission or by a court, is void as a matter of law. A majority of judges in active service voted to rehear the case en banc, thus vacating the panel opinion and the previous judgment of the court. Rule 14, Rules of the Sixth Circuit. Following supplemental briefing, the case was argued before the full court. For the reasons that follow, we hold that a private unsupervised release under the circumstances of this case may waive ADEA rights, and thus affirm the district court.
While we adopt the facts set forth in the district court's opinion, see Runyan v. NCR Corp., 573 F.Supp. 1454, 1456-57 (S.D.Ohio 1983), we set out a further summary. NCR hired Runyan, who was born in 1918, at age fifty-three as an assistant general counsel in NCR's corporate legal department. In early 1977, James E. Rambo, vice president and general counsel at NCR, informed Runyan the company was going to terminate him for unsatisfactory performance. During the meeting, Runyan, then fifty-nine and an experienced labor lawyer, told Rambo that he felt his "termination was related to age discrimination."
After several subsequent discussions between Runyan and various representatives of NCR, the parties executed a written "Consulting Agreement," which became effective on June 1, 1977, but was to terminate on May 31, 1978. This agreement provided that Runyan would receive $150 per day, with a guaranteed minimum of $2,333 per month, in exchange for Runyan's continuing legal services as a consultant. In November 1977 Runyan approached Rambo and requested that NCR extend the agreement beyond May 31, 1978, and increase the compensation Runyan was receiving under the agreement. After discussing Runyan's requests with other officials of NCR, Rambo told Runyan that the company would not extend the agreement, but that it would increase Runyan's compensation to a guaranteed minimum of $4,000 per month from November 1, 1977, through May 31, 1978. NCR conditioned this increased compensation, however, on Runyan's executing a release of all claims he had or may have against NCR relating to his employment and termination.
On November 25, 1977, the parties entered into a written amendment to the prior consulting agreement, increasing Runyan's compensation to a guaranteed monthly minimum of $4,000 to the time of termination. At the same time, Runyan signed an "Accord and Satisfaction, Release and Discharge," which provided:
In consideration of the "Amendment to Consulting Agreement" executed by NCR on November 25, 1977, receipt of which is hereby acknowledged and which I acknowledge to be in full accord and satisfaction of any and all claims I may have against NCR arising out of the course of my employment and/or the termination of any employment and in further consideration of the said "Amendment to Consulting Agreement," I, Richard V. Runyan, hereby release and forever discharge NCR, its successors, assigns, transferees, officers, employees, representatives and agents from all manner of action and actions, cause and causes of action, suits, debts, contracts, controversies, agreements, promises, damages, and demands whatsoever in law or in equity, which against NCR, I, Richard V. Runyan, ever had, now have, or which I hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of these presents, save and except the aforementioned "Amendment to Consulting Agreement" of November 25, 1977, and the underlying "Consulting Agreement of June 1, 1977."
I have read this release and understand all of its terms. I execute it voluntarily and with full knowledge of its significance.
(Emphasis added.)
On May 31, 1978, the consulting agreement expired by its own terms and Runyan's working relationship with NCR ended. Runyan accepted the increased compensation promised him. On November 27, 1978, Runyan filed a charge of age discrimination against NCR with the Secretary of Labor, 1 and on May 22, 1980, commenced this ADEA action in the district court.
Runyan's principal argument on appeal is that an unsupervised waiver of his statutory rights cannot bar his private action under the ADEA. This argument is based on Congress' incorporation into the ADEA of the enforcement provisions of the FLSA, and the issue raised is one of first impression in this court. To resolve this issue, we review the historical development of the FLSA and the ADEA.
In 1938 Congress enacted the FLSA to provide for a standard minimum wage and to require additional compensation for overtime work. 2 Section 216 provides in part:
Any employer who violates the provisions ... of this title shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages.
29 U.S.C. Sec. 216(b) (1982). The FLSA is silent on whether an employee can release his or her right to wages or liquidated damages. Seven years after enactment, however, in Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 65 S.Ct. 895, 89 L.Ed. 1296 (1945), the United States Supreme Court considered whether an employee subject to the FLSA could waive or release his right to liquidated damages under Sec. 216. In each of three consolidated cases before the Court, the employer had obtained a release from its employee in exchange for an amount less than the employee's full FLSA entitlement. 3
The Court, influenced by its perception of legislative intent, held that an employee cannot privately waive his right to liquidated damages, at least when no bona fide dispute exists between the parties regarding the FLSA's coverage:
The statute was a recognition of the fact that due to the unequal bargaining power as between employer and employee, certain segments of the population required federal compulsory legislation to prevent private contracts on their part which endangered national health and efficiency .... To accomplish this purpose, standards of minimum wages and maximum hours were provided. Neither petitioner nor respondent suggests that the right to the basic statutory minimum wage could be waived by any employee subject to the Act. No one can doubt but that to allow waiver of statutory wages by agreement would nullify the purposes of the Act. We are of the opinion that the same policy considerations which forbid waiver of basic minimum and overtime wages under the Act also prohibit waiver of the employee's right to liquidated damages.
Id. at 706-07, 65 S.Ct. at 902 (footnote omitted) (emphasis added). The Court did not decide whether an employee can waive the right to liquidated damages when a bona fide dispute regarding FSLA's coverage does exist.
The Supreme Court partially resolved the question left open in O'Neil in Schulte, Inc. v. Gangi, 328 U.S. 108, 66 S.Ct. 925, 90 L.Ed. 1114 (1946). 4 The Court addressed whether the FLSA precludes a bona fide settlement of a bona fide dispute over the Act's coverage on a claim for overtime compensation and liquidated damages when the employee received the overtime compensation in full. The Court concluded:
We think the purpose of the Act, which we repeat from the O'Neil case was to secure for the lowest paid segment of the Nation's workers a subsistence wage, leads to the conclusion that neither wages nor the damages for withholding them are capable of reduction by compromise of controversies over coverage.
Id. at 116, 66 S.Ct. at 929 (footnote omitted.) 5
Although the Court in Gangi held that...
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