Wagner v. NutraSweet Co.

• Decision Date: 05 September 1996
• Docket Number: No. 95-3315,95-3315
• Citation: 95 F.3d 527
• Parties: 72 Fair Empl.Prac.Cas. (BNA) 284, 69 Empl. Prac. Dec. P 44,306, 132 Lab.Cas. P 33,436 Catherine WAGNER, Anne Marie Sorcinelli, and Jenny Harrison, Plaintiffs-Appellants, v. The NUTRASWEET COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 527

95 F.3d 527

72 Fair Empl.Prac.Cas. (BNA) 284,

69 Empl. Prac. Dec. P 44,306,

132 Lab.Cas. P 33,436

Catherine WAGNER, Anne Marie Sorcinelli, and Jenny Harrison Plaintiffs-Appellants, v. The NUTRASWEET COMPANY, Defendant-Appellee.

No. 95-3315.

United States Court of Appeals Seventh Circuit.

Argued April 3, 1996.

Decided Sept. 5, 1996.

Thomas R. Meites (argued), Joan H. Burger, Paul W. Mollica, Laurie A. Wardell, Meites, Frackman, Mulder & Burger, Chicago, IL, for plaintiffs-appellants.

Richard C. Robin, Edward C. Jepson, Jr. (argued), Thomas G. Abram, Carlys E. Belmont, Karen T. Donmoyer, Vedder, Price, Kaufman & Kammholz, Chicago, IL, for defendant-appellee.

Before BAUER, EASTERBROOK, and DIANE P. WOOD, Circuit Judges.

DIANE P. WOOD, Circuit Judge.

As the parties delicately put it in this case, the NutraSweet Company realized that some changes in its business strategy were going to be necessary when "certain of its patents" expired in December 1992. (We assume that they meant the blockbuster patents related to the chemical substance aspartame, an artificial sweetener that, at the time, accounted for approximately $1 billion in annual sales. See Alix M. Freedman, Monsanto Touts New Sugar Substitute as Sweetest Yet, WALL STREET JOURNAL, March 29, 1991.). When managerial employees Catherine Wagner, Anne Marie Sorcinelli, and Jenny Harrison lost their jobs as a result of the "reconfiguration" that took place, they sued under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and the Equal Pay Act, 29 U.S.C. § 206(d), both individually and on behalf of a class. In two separate orders, the district court granted summary judgment for NutraSweet on all claims. Although we agree with most of its conclusions, we find that some of the claims should have withstood summary judgment. We therefore affirm in part and reverse and remand in part.

I

NutraSweet was originally a subsidiary of G.D. Searle & Co., the multinational pharmaceutical company. In 1985, Monsanto Co. (of St. Louis, Missouri) bought Searle and its NutraSweet food products division. In 1986, NutraSweet was spun off and made an independent unit of Mansanto Co. Within the NutraSweet unit, there were a variety of salary classifications and compensation systems, the details of which we need not explore for present purposes. In March 1989, the firm of James H. Lowry & Associates issued a report, commissioned by NutraSweet for its internal use, that revealed major disparities in income between male and female management personnel, in favor of the male employees. As far as the record shows, NutraSweet took no particular steps to improve this situation.

In late December 1990, as noted, NutraSweet decided that it needed to implement a significant reduction in force, due to the impending patent expirations. It developed a set of Separation Guidelines in conformity with the Employee Retirement Income Security Act (ERISA), which it published to its employees effective March 1, 1991. The Guidelines described the benefits available to "certain eligible employees" whose termination of employment was due to reasons other than retirement, transfer to an affiliated employer, or other circumstances that did not result in a period of unemployment. Part III of the Guidelines stated that "[a]n employee may be granted severance benefits" of the described type depending upon the reason for termination, employment status, length of service, and base salary. Both a wage benefit and a welfare benefit (covering medical, dental, and vision) would be available for specified lengths of time. The wage benefit referred to a possibility of "redeployment," in which case the benefit would be adjusted prior to the first day of "redeployment." In the General Provisions, the Guidelines state that "[s]eparation benefits provided hereunder are a gratuity and no employee is entitled to benefits hereunder prior to termination of employment." The company reserved the right to terminate the program at any time, in its sole discretion.

With the Guidelines in place, NutraSweet began implementing its reduction in force. On or around March 25, 1991, it began sending letters to the unlucky people who were to lose their jobs. The letters described the benefits available under the Guidelines and added that the company would assist with outplacement services (a benefit not mentioned in the Guidelines). Each letter also contained a general release, which stated:

In consideration of the payments set out in this letter, you for yourself, your executors, personal representatives, successors and assigns hereby release and absolve the officers, directors, successors and assigns from any and all claims, charges, demands, or causes of action, known or unknown, asserted or unasserted, in any way arising from your employment, separation of employment or failure to be recalled or rehired by the company, including but not limited to, all claims which have been raised pursuant to any common law cause of action or pursuant to any federal, state or local statute, order, law or regulation. In making this Agreement, you and the Company agree that you were an "employee at will" of the Company and not employed pursuant to either a written or oral employment contract.

Directly below the release language was a line for the employee's signature. Each of the appellants before us signed the release, and each has a different story.

Wagner was the Director of Human Resources for NutraSweet's Research and Development (R & D) Group. In early 1991, she was responsible for implementing various components of the reconfiguration plan as they related to the termination of R & D employees. The number of terminations in the R & D Group was great enough to trigger the provisions of the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq. (WARN Act). In light of the significant reduction in the R & D staff Wagner concluded that NutraSweet no longer needed a director responsible for R & D human resources. She recommended that her position should be eliminated and a manager position created in its place. Wagner's boss agreed, and he offered the new manager position to Wagner, but she declined it, believing that this would represent a step back in her career path. On March 25, 1991, along with the rest of the employees, NutraSweet offered Wagner a "separation package," which included the general release set forth above. Specifically, it offered Wagner two months' redeployment pay beginning August 5, 1991, outplacement services, and severance benefits worth more than $46,000. NutraSweet also offered Wagner a "Retention Period" so that she could complete various projects with retention pay equal to one-half the amount of her separation pay. She signed the March 25, 1991, release, and agreed to continue working for NutraSweet during the Retention Period. On August 1, 1991, as that period was drawing to a close, NutraSweet presented Wagner with another "separation letter" that asked her to release the company from liability for all claims accruing during the period from March 30, 1991, through August 5, 1991. Wagner refused to sign this agreement because she believed that NutraSweet had discriminated against her during the Retention Period.

Sorcinelli was the Director of Human Resources for the NutraSweet Business Group. The 1991 reconfiguration resulted in a substantial reduction in the Business Group's staff and a corresponding reduction in the scope and content of Sorcinelli's job. Consequently, Sorcinelli felt that staying with NutraSweet would be a step down for her. She notified NutraSweet of her intention to resign and asked for and was given a separation package. At that time, Sorcinelli believed that she had been discriminated against while employed by the company because she did not receive the same compensation as the male employees at her level in her group. On more than one occasion, she complained to her supervisor and others about the amount of her bonus compared to that of the others. Like Wagner's, Sorcinelli's separation package provided her the opportunity to receive redeployment pay and outplacement services if she signed the release. She did not, however, have any opportunity to stay on during a Retention Period. Sorcinelli signed, and she received redeployment pay for the period April 30, 1991, through July 1, 1991, a 40-week severance package, and a $10,000 relocation payment.

Harrison worked in the Business Ventures Group, where she was involved in the negotiation and interpretation of NutraSweet's agreements with outside consultants. She, too, learned in March 1991 that her job had been eliminated. Soon after, she attended a meeting at which two human resources employees presented her with a separation package. She waited two days, apparently not consulting an attorney, and then signed the release and agreed to the package. Similarly to Sorcinelli, she received outplacement services, two months' redeployment pay (through June 3, 1991), and severance pay (from June through October 13, 1991). Also like Sorcinelli, Harrison believed that from as early as 1988 similarly situated men were receiving higher salaries and bonuses than she.

II

In the district court, Wagner, Sorcinelli, Harrison, and a fourth plaintiff not before us on this appeal, Sarah Baldwin Weissman, claimed that NutraSweet had discriminated against them on the basis of sex in violation of Title VII and the Equal Pay Act. It was undisputed that all plaintiffs had satisfied the necessary procedural prerequisites for their suits. They attempted to sue on behalf of themselves and a class of other female managerial employees who were similarly situated. NutraSweet argued that the releases barred their suit; the plaintiffs responded that Harrison had not "knowingly and voluntarily" signed her release, that Wagner's and Harrison's releases were not supported by consideration, and that even if the...