Charles J. Adams David N. Bosley Mark J. Cerullo Delores A. Heavner Mona Jane MacKey Brian L. McCord Gerald R. Moore John B. Moore Rebecca A. Moore David J. Perry Janet L. Queen Robert W. Sims Nancy Streets Charles B. Wilfong, and Leahbelle Cogar v. Moore Business Forms, Incorporated
Docket: 99-2168
Court: Court of Appeals for the Fourth Circuit; August 24, 2000; Federal Appellate Court
Moore Business Forms, Inc. offered a severance and benefits package to employees affected by the closure of its Buckhannon, West Virginia manufacturing plant, contingent on the signing of releases to waive claims related to their employment. Fourteen employees, after receiving severance payments between $3,500 and $30,000, contended that these releases were invalid due to non-compliance with federal statutory requirements under the Age Discrimination in Employment Act (ADEA) and state regulations under the West Virginia Human Rights Act. They initiated legal action against Moore for age discrimination, breach of contract, misrepresentation, wrongful discharge, and unlawful discharge. The district court granted summary judgment for Moore, determining that the releases were valid and met the necessary legal standards. The Fourth Circuit Court of Appeals affirmed this decision, with Judge Niemeyer authoring the opinion joined by Judges Williams and Beezer.
Moore established a severance support program offering employees benefits that included one week of pay for each year of service up to 10 years, and two weeks of pay for each additional year, along with continued health and life insurance, job placement services, and access to an employee assistance program. To receive these benefits, employees had to sign a release agreement waiving claims against Moore related to their employment or termination, including claims of unlawful discrimination and violations of various employment laws. Fourteen employees who signed the releases and one who did not filed a lawsuit on July 17, 1996, alleging age discrimination and other claims after the closure of the Buckhannon plant. The court later dismissed several claims based on age and statute of limitations issues. After limited discovery regarding the validity of the releases, the court granted summary judgment to Moore, finding that the employees who signed the releases had effectively waived their rights. The remaining employee reached a settlement with Moore. The appealing employees argued that their releases were invalid for not meeting federal and state statutory requirements concerning age-discrimination claims, rendering them ineffective for waiving their common-law claims as well.
Employees argue that the releases they signed do not meet federal requirements for waiving claims under the Age Discrimination in Employment Act (ADEA), as established by the Older Workers Benefit Protection Act (OWBPA). The OWBPA mandates that any waiver must be "knowing and voluntary," and specifies several criteria that must be satisfied for a waiver to be valid. The Employees acknowledge that their signed agreements fulfill nearly all OWBPA requirements, such as being understandable, specifically referencing ADEA claims, being supported by consideration, and allowing a revocation period. However, they assert the releases are invalid due to non-compliance with the OWBPA's informational requirements. Specifically, the OWBPA requires that employees in an "employment termination program" receive information about the ages and job titles of all individuals in the relevant class, including those not selected for the program. The Employees claim that Moore, their employer, failed to provide necessary information about workers at a different facility to which their work was transferred. Moore argues that it only needed to disclose information about employees at the Buckhannon plant, where the Employees worked.
The Employees' challenge focuses on the definition of "job classification or organizational unit" under 29 U.S.C. 626(f)(1)(H) to assess whether Moore provided necessary information. The statute lacks definitions for these terms; however, EEOC regulations indicate that their scope is determined by the "decisional unit," defined as the segment of the employer's structure from which employees were selected for waiver consideration. The decisional unit usually aligns with the facility but may extend beyond if employees from multiple facilities were considered for layoffs. Employers must disclose age and job title information pertinent to potential age discrimination claims to ensure employees can make informed decisions about signing waivers. In this case, Moore provided the job classifications and ages of all employees at its Buckhannon plant, asserting that this facility constituted the decisional unit and that its employment decisions were independent of those at other plants.
Employees did not provide evidence to contest Moore's claim that the decision to close the Buckhannon plant was made without consideration of layoffs at other locations. Testimony from one employee indicated that an incentive program introduced in late 1993 or early 1994 linked raises to productivity goals and suggested the plant's future depended on meeting these goals, framing it as a competition among plants regarding their potential closure. Despite strong performance in this program, the Buckhannon plant was nonetheless closed. The employees asserted that transferring equipment from Buckhannon to another facility implied consideration of other plants in the closure decision. However, this assertion was deemed speculative, lacking concrete evidence of Moore's consideration of other facilities or employees during the decision-making process. The only documented rationale for the closure was Moore's interest in downsizing. The district court correctly determined that the relevant decisional unit for compliance with 29 U.S.C. 626(f)(1)(H)(ii) was the Buckhannon plant's workforce, affirming that the releases signed by the employees were valid since they were informed only about their specific group.
Additionally, the Employees argued that their signed releases did not adhere to regulations set by the West Virginia Human Rights Commission regarding waivers under the West Virginia Human Rights Act. This Act prohibits age-based employment discrimination and empowers the Commission to create rules for waiver and release of claims. These regulations, aligned with the Older Workers Benefit Protection Act (OWBPA), outline necessary conditions for a release to be considered a valid and voluntary waiver of claims under the Act.
The Employees acknowledge that the release form provided by Moore generally met the waiver requirements under West Virginia regulations but identify two key non-compliance issues. First, the form lacked the required toll-free number for the state bar association, instead including a statement encouraging employees to consult an attorney. Second, while the regulations mandate explicit reference to rights under the West Virginia Human Rights Act, the form referred only to general claims of discrimination without naming the specific statute.
Despite these deviations, the court concludes that the releases substantially complied with the regulatory criteria for a knowing and voluntary waiver of claims under the West Virginia Human Rights Act, referencing the precedent in Spradling v. Blackburn. Additionally, even if the releases were deemed invalid, the Employees' challenge would fail as they did not return the benefits received in exchange for signing the releases, adhering to West Virginia's principle that one must tender back consideration to contest a release.
The Employees argue that the Supreme Court's ruling in Oubre v. Entergy Operations, Inc. negates the tender-back requirement in state claims, but the court finds this argument unpersuasive. Oubre's holding pertains specifically to the ADEA and does not affect the interpretation of state laws, which remain under the jurisdiction of West Virginia's legislature and courts.
The rationale from the Oubre decision, which involved a specific congressional mandate regarding the waiver of rights, does not apply to West Virginia's Human Rights Act. Unlike Oubre, West Virginia law does not contain an explicit provision that mandates a knowing and voluntary waiver of claims. The requirements invoked by the Employees are based on the regulations of the West Virginia Human Rights Commission, which limit their applicability to the voluntary release of rights before the Commission and do not affect the validity of waivers in court. The common-law tender-back rule remains applicable for actions challenging the validity of claims releases under the Human Rights Act. The releases signed by the Employees are deemed compliant with both the Older Workers Benefit Protection Act (OWBPA) and the Commission's regulations, meaning the Employees must tender back benefits to pursue their state discrimination claims. The court did not need to consider the Employees' argument regarding the releases being void for other claims, as their position was likely to fail. The Employees have not claimed the releases were invalid under other legal standards. Thus, the district court's dismissal of the Employees' claims of breach of contract, misrepresentation, wrongful discharge, and unlawful discharge was appropriate, given their acceptance of severance benefits in exchange for waiving their right to sue.
The district court's judgment is affirmed. The Supreme Court's decision in Oubre leaves unresolved whether an employee who files an Age Discrimination in Employment Act (ADEA) claim after accepting consideration for signing a release may lose the right to ongoing benefits from the employer or be obligated to repay the employer. Notably, Justice Breyer's concurrence suggests that the Older Workers Benefit Protection Act (OWBPA) treats an invalid release as voidable, allowing for potential restitution to the employer without hindering the employee's right to sue. This perspective aligns with the court's ruling in Blistein, which also views an invalid OWBPA release as voidable, reinforcing that employees cannot retain employer benefits while simultaneously pursuing ADEA claims.
