717 Effect of pre-filing waiver and release of claims

While tendering back the consideration a Complainant received for signing the waiver and release is a prerequisite for challenging the validity of the waiver and release, dismissal of the Complainant's case on the basis of his check being returned for insufficient funds was inappropriate where the Respondent’s attorney had waited an unreasonable amount of time (more than a month) to deposit the check into the Respondent’s account. The Complainant was willing to return the severance pay when asked and did so. The Respondent’s attorney received the check from the Complainant but did not act expeditiously to deposit the check into its trust account. The Respondent then acted immediately to move for a dismissal of the complaint which the Administrative Law Judge promptly granted without giving the Complainant any opportunity to remedy the situation. Xu v. Epic Systems Corp. (LIRC, 01/31/17).

Undisputed facts persuade LIRC that the Complainant knowingly and willingly waived his rights to bring a complaint of employment discrimination against his employer. The Complainant’s lack of knowledge that his employer had made certain changes in his personnel record did not make the waiver not “knowing.” Alternatively, dismissal was also required here because the Complainant did not tender back the payment he received in exchange for his waiver. Musial v. AECOM Gov’t Serv., Inc. (LIRC, 07/21/14).

Although Complainants are generally required to tender back any consideration received in exchange for the waiver of their rights to pursue discrimination claims, as a condition precedent to challenging the validity of such waiver, there was a special circumstance in this case: the settlement agreement contained a provision stating that “reimbursement shall occur if, and only if, employee receives a judgment against the [employer].” The provision anticipates that any return of the consideration will come out of a recovery on the underlying discrimination claim. The tender-back requirement, therefore, does not apply. Carson v. Columbia St. Mary’s (LIRC, 03/12/13).

The severance agreement in this case, which waived the employee’s claims against the employer, does not have an “integration” clause indicating that it is the final, full and complete expression of the parties’ agreement. Therefore, the parol evidence rule does not preclude the employee from relying on a claim that oral statements by an agent of the employer altered the terms of the written settlement agreement subsequently entered into. Carson v. Columbia St. Mary’s (LIRC, 03/12/13).

In this case in which the employee is challenging the validity of a severance agreement waiving her claims against the employer on the grounds that she did not knowingly and voluntarily waive her rights when she signed it, there were material disputes of fact as to what was said, including whether the Complainant was told particular things about the effect of the agreement. The Commission concludes that determination of whether the employee knowingly and voluntarily waived her rights when she signed the severance agreement should be made based on assessment of credibility of testimony given at a hearing. Carson v. Columbia St. Mary’s (LIRC, 03/12/13).

The Complainant voluntarily entered into a severance agreement waiving the right to file any claims against the Respondent under the Wisconsin Fair Employment Act. The Complainant’s argument that the agreement was nullified by the Respondent’s alleged breach of the agreement was rejected. The Equal Rights Division does not have jurisdiction to decide whether a severance agreement has been breached. It is for a court to determine whether such an agreement has been breached and, if so, what remedy is available to the Complainant. Duquaine v. Wis. Evangelical Lutheran Synod (LIRC, 03/31/06).

The Complainant made a voluntary and knowing waiver of her right to bring an employment discrimination complaint against the Respondent under the Wisconsin Fair Employment Act. There was no showing that she was induced to sign the agreement through any fraud. The Complainant was aware of facts sufficient to lead her to suspect age discrimination at the time of her termination, and the release did not hide the fact that the Respondent was seeking to protect itself from any possible age discrimination claims. Moreover, the Respondent did not obtain the Complainant’s termination in exchange for the benefits it was giving her under the agreement; the termination was something the employer (in the absence of any contractual right to a term of employment) had the power to carry out regardless of the agreement. What the Respondent obtained was the release of claims in exchange for the benefits it gave the Complainant, and there was no fraud in connection with that exchange. The Complainant had the opportunity to consult with an attorney of her own choosing. She was given forty-five days to consider the release agreement. Following execution of the agreement, she was given seven days to revoke her acceptance of the agreement. Semandel v. Briggs & Stratton (LIRC, 02/24/05).

A Complainant cannot challenge the validity of a separation agreement and, at the same time, keep the proceeds of that agreement. However, it is sufficient if the Complainant offers to return the severance payment, even if payment has not yet been made. In this case, the Complainant indicated that she did not intend to return the payment. The Administrative Law Judge dismissed her complaint. The Complainant’s offer to return the severance payment at the time that she filed her petition for review of the dismissal of her complaint was self-serving; however, it might be sufficient to enable the Complainant to challenge the validity of the underlying agreement on appeal. Wesley v. TMP Worldwide (LIRC, 02/07/03).

The following factors should be applied as part of a “totality of circumstances” test to determine whether a Complainant made a knowing and voluntary waiver of her right to pursue an employment discrimination claim against a Respondent under the Wisconsin Fair Employment Act: (1) the Complainant’s education and business experience, (2) the amount of time the Complainant had to examine the agreement before signing it, (3) the Complainant’s role in determining the terms of the agreement, (4) the clarity of the agreement, (5) whether the Complainant was represented by counsel or consulted with an attorney, (6) whether the consideration given in exchange for the waiver exceeded employee benefits to which the Complainant was already entitled by contract or law, and (7) whether the Complainant was encouraged to consult an attorney and whether the Complainant knew or should have known her rights upon execution of the release. That a Complainant chooses not to consult an attorney does not undermine a finding that a release was signed knowingly and voluntarily. It should normally suffice for the employer to suggest that the employee may want to consult an attorney. Further, the fact that a Complainant did not play a role in deciding the terms of the agreement is not a sufficient basis, in and of itself, upon which to conclude that the waiver was not knowing and voluntary. Further, while a Complainant’s particular financial circumstances may have made it difficult for her to reject the agreement, a release of claims will nevertheless be upheld if she had a meaningful choice, in that she could have consulted an attorney and elected to pursue her legal rights rather than execute the release agreement. Wesley v. TMP Worldwide (LIRC, 02/07/03).

The Complainant’s allegations of fraud were insufficient to void a severance agreement where the offer of a severance package was a separate issue from the termination itself. The Complainant alleged that, at the time she signed her severance agreement, which released all known and unknown claims against Respondent, she had been told by Respondent that her position was being eliminated due to a restructuring of the company. She later learned (after the expiration of the agreement’s revocation period) that her former position had actually been assumed by a male employee. The Complainant stated that she suspected at the time of separation that she had been the victim of discrimination, and yet she entered into the severance agreement despite this suspicion. Wesley v. TMP Worldwide (LIRC, 02/07/03).

An agreement into which a Complainant has knowingly and voluntarily entered will not be disturbed simply because the Complainant has had second thoughts about the wisdom of entering into such an agreement. The fact that a Complainant has changed his or her mind about the wisdom of what they have done does not change the binding nature of the agreement. Wesley v. TMP Worldwide (LIRC, 02/07/03).

The Complainant’s complaint of discrimination was foreclosed based upon the Agreement of Resignation and Release he entered into with the Respondent. Under the agreement, the Complainant irrevocably and unconditionally released the Respondent from any and all claims arising prior to the signing of the agreement. The Complainant objected to the validity of the release. However, the totality of the circumstances demonstrated that the agreement was valid. Under the agreement the Respondent agreed to provide the Complainant with group health insurance benefits for three months as consideration for signing the agreement. The Complainant was given three weeks to examine the agreement before signing it, and after signing it, another week to change his mind and rescind it. He was encouraged to review the agreement with a representative of his choice prior to signing it, and he in fact did consult an attorney prior to signing it. The mere fact that the Complainant found himself in financial difficulties and that he had to care for his family and pay his bills did not constitute duress. The record shows that there was a knowing and voluntary waiver of rights under the Wisconsin Fair Employment Act. Meltz v. City of Appleton (LIRC, 12/27/01).

Following her discharge, the Complainant signed a waiver and release which specifically waived claims the Complainant may have had under the Wisconsin Fair Employment Act. The Complainant subsequently filed a complaint of discrimination with the Equal Rights Division. She alleged that the contract containing the waiver and release was null and void because it had been breached by the Respondent. However, an alleged breach of a contract does not make the contract null and void. The Complainant had the right to go to court to enforce the contract and to seek a court order that the Respondent comply with the terms of the contract. The Equal Rights Division does not have jurisdiction to decide breach of contract questions regarding private agreements. The Complainant willingly and voluntarily signed the agreement, with the advice of legal counsel and with adequate time to consider the agreement. Therefore, the Equal Rights Division properly dismissed her complaint. On appeal to LIRC, the Complainant asserted for the first time that there was duress in the signing of the agreement. However, an assertion that a settlement agreement was entered into based on poor advice from an attorney does not provide a basis for the Equal Rights Division to overlook the existence of a waiver and release directed expressly to claims under the Wisconsin Fair Employment Act. Welles v. Einhorn Assoc. (LIRC, 04/19/00).

A Complainant is required to tender back the consideration received in exchange for a waiver of her rights as a condition precedent to challenging the validity of the waiver. Lynch v. Zalk Joseph’s Fabricators (LIRC, 07/17/96).

The Complainant’s claim that she did not know “the real reason” for her discharge at the time she signed a release agreement was immaterial since the agreement clearly noted that it was a release of all “known and unknown” claims against the employer. Release agreements containing this language constitute a valid and binding waiver of the right to bring a subsequent claim of alleged discrimination. Further, the fact that the agreement expressly advised the Complainant to consult with an attorney prior to executing the agreement, and gave her several weeks to consider whether or not to execute the release, established that she had a meaningful choice when presented with the release agreement. The fact that the Complainant chose not to consult an attorney did not undermine a finding that the release was signed knowingly and voluntarily. Lynch v. Zalk Joseph’s Fabricators (LIRC, 07/17/96).

A Complainant's offer to return previously received pension benefits to the employer, even where the monies had not yet actually been returned, was sufficient to allow him to challenge the validity of a release of claims arising out of his employment including, but not limited to, any alleged violation of state or federal measures which prohibit employment discrimination. Grahl v. Mercury Marine (LIRC, 12/04/92).

The totality of the circumstances should be used in determining whether there has been a knowing and voluntary waiver of rights under the WFEA. Although giving an employee an opportunity to negotiate the terms of a release and encouraging the employee to consult with an attorney are factors to consider in determining whether a release was knowing or voluntary, such factors are not mandatory requirements and a release could be found valid even in their absence. In this case, a release was determined to have been knowing and voluntary where the release was clear in its language, where a reasonable amount of time was allowed to consider whether or not to sign it, where the consideration given exceeded the amount of pension benefits the employee was otherwise entitled to receive, and where the employee had a high school education and had been a management employee who had many years of business experience and who had signed or had been a party to numerous contracts. Grahl v. Mercury Marine (LIRC, 12/04/92).

Where the Respondent gave the Complainants special benefits in consideration for the Complainants’ promises not to sue the employer for any employment-related claim, the Complainants could not retain the consideration they received pursuant to those agreements while maintaining age discrimination claims against the Respondent, absent fraud on the part of the Respondent.Giese & Field v. Wausau Ins. (LIRC, 10/25/88).

The Complainant was terminated abruptly and offered severance pay on the condition that he execute a release waiving his rights to pursue a claim of discrimination against the employer. The court, characterizing the situation as one of “hurry up, get out of here, just the sign the papers if you want severance pay or leave,” concluded that the release was signed under duress and is void as against public policy and is not enforceable. Thurmond v. Webster Elec. Co. (Racine Co. Cir. Ct., 07/30/85).

The Complainant’s statement that she would forego all rights relating to her alleged discriminatory termination does not constitute a waiver because her right to be free from sex discrimination serves an important public policy. Hoyer v. LIRC (Milwaukee Pub. Library), (Dane Co. Cir. Ct., 11/10/83).