Opinion
Civil Action No. 3:01-CV-2539-M
July 17, 2002
FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
Pursuant to the District Court's Order of Reference, entered January 30, 2002, the United States District Court referred Defendant's Amended Motion to Dismiss, filed March 21, 2002, for hearing, if necessary, and for recommendation. For the following reasons, Defendant's motion should be GRANTED and the case DISMISSED with prejudice.
I. Background
On November 30, 2001, Plaintiff, an African-American male, filed a pro se Complaint, alleging race discrimination by his employer, Defendant Lazo Technologies. In his Complaint, Plaintiff states that he was demoted from the Line Lead/supervisor position to the assembler position and was replaced by an Hispanic individual due to "company setbacks." Plaintiff further alleges that of the other six people whose shifts were reorganized as a result of the setbacks — all of whom are Hispanic — only Plaintiff was demoted. Plaintiff's EEOC Charge, filed February 26, 2001, cites race discrimination and states that Plaintiff was demoted on February 16, 2001, with no reason given for the adverse action.
Defendant filed its Amended Motion to Dismiss, and brief in support, stating that (1) Plaintiff has failed to state a claim upon which relief can be granted; (2) Plaintiff gave up his right to sue Defendant by agreeing to arbitrate any employment disputes against Defendant; and (3) Plaintiff's agreement and execution of the "Severance and Confidentiality Agreement and Employee Release In Full of All Claims" releases Defendant from All Claims of Discrimination under Title VII of the Civil Rights Act of 1964, as amended.
II. Standard of Review
Motions to dismiss for failure to state a claim upon which relief can be granted are disfavored and rarely granted. Sosa v. Coleman, 646 F.2d 991, 993 (5th Cir. 1981). A district court cannot dismiss a complaint, or any part of it, for failure to state a claim upon which relief can be granted unless it appears beyond doubt that the plaintiff can prove no set of facts in support of her claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Blackburn v. City of Marshall, 42 F.3d 925, 931 (5th Cir. 1995). In reviewing a Rule 12 (b)(6) motion, the court must accept all well-pleaded facts in the complaint as true and view them in the light most favorable to the plaintiff. Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). In order to warrant dismissal, a complaint must show a bar to relief or a successful affirmative defense on its face. Clark v. Amoco Prod Co., 794 F.2d 967, 970 (5th Cir. 1986). "The issue is not whether a plaintiff will ultimately prevail, but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). In ruling on such a motion, the court cannot look beyond the face of the pleadings. Baker, 75 F.3d at 196; Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999), cert. denied, 530 U.S. 1229 (2000). A plaintiff, however, must plead specific facts, not mere conclusory allegations, to avoid dismissal. Guidry v. Bank of LaPlace, 954 F.2d 278, 281 (5th Cir. 1992).
A Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted shall be converted into a motion for summary judgment and disposed of as provided in Rule 56 whenever matters outside the pleadings are presented to and accepted by the court. Either the pleader or the moving party or both may bring the conversion process into operation by submitting extraneous matters. Hadges v. Yonkers Racing Corp., 733 F. Supp. 686 (S.D.N.Y. 1990). The Fifth Circuit has long recognized that materials filed concurrently with the pleadings are sufficient to convert a motion to dismiss into one for summary judgment. General Guar. Ins. Co. v. Parkerson, 369 F.2d 821 (5th Cir. 1966).
Summary judgment is appropriate when the pleadings and the evidence on file, along with any affidavits, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. FED. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265, 273 (1986); Melton v. Teachers Ins. Annuity Assoc. of Am., 114 F.3d 557, 559 (5th Cir. 1997); Crescent Towing Salvage Co., Inc. v. M/V Anax, 40 F.3d 741, 743 (5th Cir. 1994). The court must consider all evidence in the light most favorable to the non-moving party and resolve reasonable inferences in favor of the non-moving party. See Walker v. Sears, Roebuck Co., 853 F.2d 355, 358 (5th Cir. 1988). As long as some support exists for the disputed allegations such that "reasonable minds could differ as to the import of the evidence," the motion must be denied. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202, 213 (1986).
The moving party bears the initial burden of showing that there is no genuine issue of material fact for trial. See Celotex, 477 U.S. at 323, 106 S.Ct. at 2552, 91 L.Ed.2d at 274 (1986); National Ass'n of Gov't Employees v. City Pub. Serv. Bd. of San Antonio, 40 F.3d 698, 712 (5th Cir. 1994). Once the moving party has satisfied the burden, the nonmoving party must set forth specific facts showing that there is a genuine issue for trial. Anderson, 477 U.S. at 249; Elliott v. Lynn, 38 F.3d 188, 190 (5th Cir. 1994), cert. denied, 514 U.S. 117, 115 S.Ct. 1976, 131 L.Ed. 865 (1995). There is a genuine issue of material fact if the evidence would permit a reasonable jury to return a verdict for the nonmoving party. Society of Fin. Examiners v. Nat'l. Assn. of Certified Fraud Examiners, Inc., 41 F.3d 223, 226 (5th Cir.), cert. denied, 515 U.S. 1103, 115 S.Ct. 2247, 132 L.Ed.2d 255 (1995). The non-moving party cannot avoid summary judgment with only conclusory allegations or unsubstantiated assertions. See Lujan v. National Wildlife Fed'n, 497 U.S. 871, 871-73, 110 S.Ct. 3177, 3180, 111 L.Ed.2d 695 (1986); Hopper v. Frank, 16 F.3d 92, 96-97 (5th Cir. 1994). Thus, summary judgment will be granted "against a party who fails to make a substantial showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322, 106 S.Ct. at 2552, 91 L.Ed.2d at 273.
III. Analysis
As discussed above, Defendant contends that (1) Plaintiff has failed to state a claim upon which relief can be granted; (2) Plaintiff gave up his right to sue Defendant by agreeing to arbitrate any employment disputes against Defendant; and (3) Plaintiff's agreement and execution of the "Severance and Confidentiality Agreement and Employee Release In Full of All Claims" releases Defendant from All Claims of Discrimination under Title VII of the Civil Rights Act of 1964, as amended. Because the Court concludes that the terms of the Severance Agreement require dismissal of the case, the Court need not reach Defendant's first two contentions.
As noted in this Court's Order of June 3, 2002, Defendant has provided the Court with matters outside the pleadings that are properly considered as summary judgment evidence. Specifically, Defendant has provided the Court with the Severance and Confidentiality Agreement, a document that is offered to bolster Defendant's assertion that Plaintiff agreed to release Defendant from pending litigation based on consideration in the amount of $432.80. In its June 3, 2002, Order, the Court notified the parties that it would convert the Rule 12(b)(6) motion to dismiss into a Rule 56 motion for summary judgment. See General Guar. Ins. Co. v. Parkerson, 369 F.2d 821 (5th Cir. 1966). The Court's June 3, 2002, Order also allowed Plaintiff twenty days to respond to Defendant's summary judgment evidence, to which Plaintiff accordingly responded on June 21, 2002.
On February 28, 2002, nearly three months after filing the instant suit against Defendant, Plaintiff signed a document entitled "Severance Confidentiality Agreement and Employee Release in Full of All Claims" ("Severance Agreement"). That document states, in pertinent part, that the employee agrees to "forever discharge and acquit and fully release employer . . . from any and all manner of actions, suits . . . claims" which were or might have been asserted against the employer, including but not limited to the employee's employment or separation from employment. Furthermore, the Severance Agreement states that "any disputes related to the Severance Agreement or the breach of the Severance Agreement will be submitted to arbitration." Under the agreement, Plaintiff was to be paid $432.80 in consideration.
A party may validly waive claims that exist on the day he signs a release, although he may not waive future claims. Rogers v. General Elec. Co., 781 F.2d 452, 454 (5th Cir. 1986). In the instant case, Plaintiff does not dispute that he signed the Severance Agreement after instituting his suit in this Court, nor does he dispute that he received the $432.80 in consideration for signing the agreement. Once a moving party has established that the former employee signed the release at issue, received due consideration, and breached the release thereafter, the former employee bears the burden of demonstrating that the release was invalid due to fraud, duress, material mistake, or some other defense. Williams v. Phillips Petroleum Co., 23 F.3d 930, 935 (5th Cir.), cert. denied, 513 U.S. 1019, 115 S.Ct. 582, 130 L.Ed.2d 497 (1994).
In determining whether the former employee has met this burden, the Court must consider the following factors: (1) the plaintiff's education and business experience, (2) the amount of time the plaintiff had possession of or access to the agreement before signing it, (3) the role of the plaintiff in deciding the terms of the agreement, (4) the clarity of the agreement, (5) whether the plaintiff was represented by counsel or consulted with an attorney, and (6) whether consideration given in exchange for the waiver exceeds employee benefits to which the employee was already entitled by contract or law. O'Hare v. Global Natural Resources, Inc., 898 F.2d 1015, 1017 (5th Cir. 1990). Not all factors need to be present for a release to be valid. Id. at 1017-1018. In the instant case, Plaintiff has provided very little information regarding the circumstances surrounding the negotiation or the signing of the Severance Agreement. However, Plaintiff has made no allegation that he was unable to understand the document due to a lack of education or business experience. Furthermore, the Severance Agreement clearly states that by signing the agreement, Plaintiff would be discharging Defendant from any and all suits pending against it. Finally, the Severance Agreement provides that consideration in the amount of $432.80 would be paid to Plaintiff for signing the Severance Agreement; Plaintiff does not allege that he did not receive the consideration, nor does Plaintiff allege that he would have been entitled to the $432.80 even if he had not signed the Severance Agreement. In sum, Plaintiff has failed to meet his burden of demonstrating that the Severance Agreement was invalid due to fraud, duress, material mistake, or some other defense. Williams, 23 F.3d at 935.
As noted above, the Severance Agreement states that: "For and in consideration of the agreements herein and the consideration paid by Employer to Employee pursuant to this Severance Agreement . . . EMPLOYEE DOES HEREBY FOREVER DISCHARGE AND ACQUIT AND FULLY RELEASE EMPLOYER . . . from any and all manner of actions, suits, liens . . . causes of action." Severance Agreement at 1-2 (emphasis added).
Without evidence that Plaintiff suffered a disadvantage based on the factors set out above, the Court cannot find that the Severance Agreement was invalid. Therefore, there is no genuine issue of material fact on the issue of the Severance Agreement, and Defendant is entitled to judgment as a matter of law. Accordingly, Defendant's converted motion for summary judgment should be GRANTED and the case DISMISSED with prejudice.
IV. Recommendation
For the foregoing reasons, the Court RECOMMENDS that Defendant's converted motion for summary judgment be GRANTED and that Plaintiff's case be DISMISSED with prejudice.
SO RECOMMENDED.