Eastern District of PA Upholds Employment Claim Release in Severance Agreement

On May 9, 2018 the Eastern District of Pennsylvania granted summary judgment against an employee who brought race and age discrimination claims against her former employer after she signed a release of claims in her severance agreement. Warren v. Mastery Charter Sch., No. CV 17-4782, 2018 WL 2129505, at *1 (E.D. Pa. May 9, 2018). Plaintiff was a social worker in her forties with a master’s degree who worked for Mastery Charter Schools from 2011 through 2016. Her contracts with her employer were year to year and were typically renewed at the end of each year. In spite of consistently positive performance reviews over her first several years working for her employer, at the end of the 2016 school year Mastery chose not to renew Plaintiff’s contract based on allegations of poor performance and communication issues. The day before Plaintiff’s final day of work, Mastery offered her a severance agreement which also contained a release and waiver of any and all employment claims for her to review. The agreement offered significant benefits—including four weeks of additional pay—that it would otherwise not have been available to Plaintiff. Further Plaintiff was offered twenty one days to review and consider the offer, as well as the opportunity to revoke the agreement within seven days if she so chose. The agreement suggested in three different locations that Plaintiff consult with an attorney about the terms and frequently used bold lettering to indicate that the agreement should be carefully read.

Plaintiff alleged that her deteriorating relationship with Mastery had caused her significant stress, depression, and anxiety. Plaintiff alleged that her growing emotional distress caused her to fear if she did not accept the agreement that Mastery would seek to interfere and prevent her future employment elsewhere. Plaintiff signed the agreement on the twenty first day, claiming she felt she had no choice but to sign. Plaintiff then filed a complaint against Mastery for employment discrimination based on age and race on October 25, 2017.

The Court relied on the rule that an employee may release employment discrimination claims against an employer so long as the release is made “knowingly and willfully.” Coventry v. U.S. Steel Corp., 856 F.2d 514, 522 (3d Cir. 1988). The Court relied on precedent to establish that although the Plaintiff may have been undergoing stress it did not negate her knowing and willful agreement to the release and waiver. Further the Court found that the agreement itself was written in a manner calculated to be understood and was sufficiently clear for the Plaintiff to understand what she was agreeing to in signing the release. The Court held that the presence of some legal jargon and long sentences was not sufficient basis to claim the release was not in a manner calculated to be understood. The Court therefore granted summary judgment in favor of Mastery and upheld the validity of the release.

For more information, call our Philadelphia employment lawyers at the Law Offices of Sidkoff, Pincus & Green at 215-574-0600 or submit an online inquiry.