Skluth v. United Merchants & Mfrs., Inc.

• Decision Date: 10 July 1990
• Citation: 163 A.D.2d 104,559 N.Y.S.2d 280
• Parties: , 68 Fair Empl.Prac.Cas. (BNA) 1695, 54 Empl. Prac. Dec. P 40,233, 12 Employee Benefits Cas. 2106 Elliot SKLUTH, Plaintiff-Respondent, v. UNITED MERCHANTS & MANUFACTURERS, INC., Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 280

559 N.Y.S.2d 280

163 A.D.2d 104, 68 Fair Empl.Prac.Cas. (BNA) 1695,

54 Empl. Prac. Dec. P 40,233,

12 Employee Benefits Cas. 2106

Elliot SKLUTH, Plaintiff-Respondent, v. UNITED MERCHANTS & MANUFACTURERS, INC., Defendant-Appellant.

Supreme Court, Appellate Division,

First Department.

July 10, 1990.

M.N. Silberman, New York City, for plaintiff-respondent.

A.J. Beech, New York City, for defendant-appellant.

Before KUPFERMAN, J.P., and MILONAS, ASCH, KASSAL and SMITH, JJ.

MEMORANDUM DECISION.

Order of the Supreme Court, New York County (Shirley Fingerhood, J.), entered on April 14, 1989, which denied defendant's motion for summary judgment dismissing the complaint, is reversed on the law and the motion granted, without costs or disbursements.

Plaintiff-respondent Elliot Skluth commenced this action against defendant-appellant United Merchants & Manufacturers, Inc., his former employer, alleging that he was unlawfully terminated as General Sales Manager of its Ameritex Print Division following thirty-nine years with the company in violation of the New York State Human Rights Law (N.Y.Exec.Law 290 et seq.). In that regard, plaintiff asserts that his discharge was the result of age discrimination. After discovery had been completed, defendant moved for summary judgment dismissing the complaint against it on the ground that plaintiff had knowingly and voluntarily executed an unambiguous and comprehensive written release in exchange for additional employment benefits to which he would not otherwise have been entitled. It is defendant's contention that plaintiff's termination was due to the company's decision to cease operation of the Ameritex Print Division because it sought to change substantially its approach to merchandising print fabric lines. Consequently, Ameritex was liquidated with the assistance of a skeleton staff possessing the specialized skills needed to perform the close-out functions. Plaintiff, on the other hand, insists that defendant placed in his former position a younger employee, a fact with which he became acquainted only after he had signed the disputed release.

Plaintiff's employment by defendant was documented through a series of written agreements, the last of which was for a two year term ending on June 30, 1986. One of the clauses of that contract authorized either party to sever the employment relationship without cause upon ninety days written notice. In March of 1986, Sidney Margolis, defendant's Executive Vice-President, advised plaintiff, who was purportedly aware of the general decline in Ameritex's business, that he was being terminated. Normally, he would have been entitled to receive salary and benefits only during the ninety day notice period specified in the employment agreement, and the ninety day severance pay period would thereafter begin. However, Margolis acceded to plaintiff's request that he be accorded additional benefits during the severance period. This extension of benefits formed the consideration for plaintiff's execution of the release pursuant to which he agreed to "release and forever discharge" defendant from "all liability of every kind, nature and description" arising out of his employment subject, in part, to the collection of stated salary payments, his pension rights, and his right to participate in defendant's comprehensive medical plan at his own expense so long as he was not enrolled in any other group medical program.

When plaintiff initially received the letter agreement, including the release, from defendant, he did not give it much attention until he reportedly was telephoned by Stanley Siegel, the company's Benefits Administrator, who informed him that if he did not sign the release defendant might discontinue certain fringe benefits. Plaintiff also claims that Siegel represented to him that his signing would not effect any subsequent actions which he might choose to take against defendant. Accordingly, he executed the release on July 9, 1986. It should be noted that despite retaining the proposed letter agreement for nearly five weeks, he failed to consult an attorney. In that regard, the parties differ as to whether plaintiff was encouraged by Margolis to show the release to a lawyer before signing it. Plaintiff, however, does not assert that defendant ever attempted to dissuade him from seeking legal counsel. Yet, the Supreme Court, in denying defendant's motion for summary judgment dismissing the complaint, found significant the fact that plaintiff did not consult an attorney and that no lawyer had any role in negotiating the agreement. Moreover, the court, while recognizing that plaintiff is a college graduate with considerable business experience, as well as knowledgeable about similar release letters signed by other terminated sales personnel, and that the release was supported by consideration, still perceived the existence of genuine unresolved issues of fact based largely on the failure of the release to refer clearly and unequivocably to claims such as the one presented here (that is, a civil rights violation), citing Oglesby v. Coca-Cola Bottling Co., 620 F.Supp. 1336 (D.C.Ill.1985). We disagree with the conclusion of the Supreme Court that releases, insofar as they involve allegations of discrimination, are disfavored as a matter of law and are, consequently, to be treated dissimilarly from contractual releases in general.

As was aptly stated in Appel v. Ford Motor Company, 111 A.D.2d 731, 490 N.Y.S.2d 228, "[i]t is firmly established that a valid release which is clear and unambiguous on its face and which is knowingly and voluntarily entered into will be enforced as a private agreement between parties" (at 732, 490 N.Y.S.2d 228). A release may, of course, be attacked for being the product of fraud, duress or undue influence (Fleming v. Ponziani, 24 N.Y.2d 105, 299 N.Y.S.2d 134, 247 N.E.2d 114), but plaintiff's only challenge to the release in question is that he did not have a lawyer advising him to sign it, and he did not learn until after he had approved the release that he had been replaced by a younger employee. Further, the Supreme Court's reliance upon Oglesby v. Coca-Cola Bottling Co., supra, is misplaced since the agreement at issue therein specifically released the employer from "any claim now and in the future with respect to employee benefits, insurance, salary or any other claim related to employment" (emphasis added; at 1139), whereas plaintiff's release did not contain such limiting categories. On the contrary, plaintiff released defendant from "all liability of every kind, nature and description" arising out of his employment with the company. There is, clearly, no language whatever that can be reasonably construed as restricting the release to claims concerning salary, medical benefits or other forms of financial compensation, and no legal authority exists for the proposition that a release must expressly mention a discrimination claim in order to be valid and binding with respect thereto. Indeed, as defendant points out, the fact that Congress is currently considering legislation that would prohibit the enforcement of releases to the extent that they do not specifically contain reference to age discrimination claims is evidence of the absence of any such rule under current law. Since the agreement herein clearly and unambiguously releases defendant from "all liability of every kind, nature and description", the instrument operates as a matter of law to release defendant from any and all claims, whether already accrued or which might arise subsequent to the date of execution, including plaintiff's assertion of age discrimination.

The other factor deemed crucial by the Supreme Court, plaintiff's failure to consult with an attorney, also does not preclude enforcement of the release. The court properly found that plaintiff is an educated, experienced businessman with knowledge of release letters such as the one that he was asked to execute. He had ample time to seek legal advice prior to signing the instrument and was, even accepting plaintiff's own version of the facts, not prevented or discouraged from doing so by defendant. There is, certainly, no requirement in the law that consultation with a lawyer must occur in order to render a contractual obligation enforceable, even one relinquishing a discrimination claim, so long as the agreement has been knowingly and voluntarily entered into. Although a party's representation by an attorney is some evidence of the knowledge and volition with which a particular contract was made (see Viskovich v. Walsh-Fuller-Slattery, 16 A.D.2d 67, 225 N.Y.S.2d 100, affd 13 N.Y.2d 1100, 246 N.Y.S.2d 632, 196 N.E.2d 267), the absence of counsel is far less critical than the opportunity to consult counsel (see Cirillo v. Arco Chemical Co., 862 F.2d 448 (3rd Cir.1988); Lancaster v. Buerkle Buick Honda Co., 809 F.2d 539 (8th Cir.1987), cert. den. 482 U.S. 928, 107 S.Ct. 3212, 96 L.Ed.2d 699). Accordingly, defendant is entitled to summary judgment dismissing the complaint against it.

All concur except SMITH, J., who dissents in a memorandum as follows:

SMITH, Justice (dissenting).

I would affirm the IAS court's denial of summary judgment since there are material issues of fact as to the voluntary and knowing nature of the release and the intent of the parties.

On March 6, 1986, the then 62 year old plaintiff was advised that effective September 3, 1986, he would be terminated from his position as General Sales Manager of the Ameritex Print Division of defendant United Merchants & Manufacturers, Inc. ("United"). Plaintiff, who had been employed by defendant since 1947, was informed that termination of his employment was due to the ongoing reorganization of United. Plaintiff maintains that defendant failed to reassign him to another position for which he was qualified and that his duties were assumed by 35 year old Fredrick Stein who plaintiff contends had been his...