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holding that an employee was precluded from pursuing a Title VII claim where the employee executed a clear release and received benefits — in the form of cash payments — in consideration for the release
Summary of this case from Watson v. Houston Indep SCH DistOpinion
No. 99 C 7579.
October 4, 2000.
MEMORANDUM OPINION AND ORDER
Plaintiff Regina Wright filed this lawsuit under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. and the Civil Rights Act of 1871, 42 U.S.C. § 1981, alleging that Defendant Heritage Environmental Services ("Heritage") discriminated against her on the basis of race when it terminated her employment. Currently before the Court is Wright's Motion to Reconsider the Court's April 27, 2000 Order ("Motion for Reconsideration"), wherein the Court dismissed Wright's lawsuit without prejudice and granted Wright leave to reinstate once she has tendered back the $6,056.25 that Heritage paid to her pursuant to the parties' June 1997 Agreement and Release.
For the reasons set forth below, Wright's Motion for Reconsideration is denied.
I. RELEVANT FACTS
Wright worked at Heritage from August 1994 until June 1997, when Heritage terminated Wright's employment, and presented Wright with a severance Agreement and Release ("First Release"). Wright executed the First Release and returned it to Heritage on June 9, 1997. Shortly thereafter, Heritage detected a typographical error in the section of the First Release that outlined the terms of Heritage's payment to Wright. Heritage revised the First Release and delivered the amended copy to Wright ("Amended Release"). Wright signed and dated the Amended Release on June 19, 1997. The Release provided, in pertinent part, that Wright released Heritage from any claims or causes of action she may have had arising out of her employment relationship with, or termination from, Heritage, including all claims under Title VII. In addition, the Release indicated that Heritage had advised Wright to consult with an attorney, granted Wright forty-five days to accept or reject the Release, and provided for a sevenday revocation period following its execution, in exchange for signing the Release, Wright received more than $6,000 in payments from Heritage.
For purposes of this decision, the relevant portions of the First Release and the Amended Release are identical. Therefore, the Court will refer to both documents as "the Release."
Nevertheless, Wright filed a lawsuit alleging that Heritage: (1) discriminated against her on the basis of race in violation of Title VII; (2) breached an implied contract of employment; and (3) breached a written contract, i.e., the Release. On February 1, 2000, Heritage filed a Motion for Summary Judgment. Wright responded with a "Factual Summary" on March 8, 2000. On March 22, 2000, Heritage filed a reply to Wright's response. The Court reserved ruling on Heritage's motion because, after a careful review of the pleadings and evidence, the Court concluded that Wright could not proceed with her lawsuit until she tendered back the $6,056.25 that Heritage paid her as consideration for the Release. Accordingly, the Court dismissed Wright's lawsuit without prejudice and granted Wright leave to reinstate once she has tendered back the $6,056.25. (R. 22, April 27, 2000 Order.) On May 30, 2000, Wright filed the motion currently before the Court, asking the Court to reconsider our April 27, 2000 Order.
II. LEGAL STANDARDS
A motion for reconsideration brought under Federal Rule of Civil Procedure 60(b) "`is an extraordinary remedy and is granted only in exceptional circumstances.'" Arenson v. Whitehall Convalescent and Nursing Home, Inc., 161 F.R.D. 355, 357 (N.D.Ill. 1995) (quoting Harold Washington Party v. Cook County, Illinois Democratic Party, 984 F.2d 875, 879 (7th Cir. 1993)). Rule 60(b) authorizes a court to grant relief from judgment only for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud, . . . misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment. Fed.R.Civ.P. 60(b). Motions brought pursuant to Rule 60(b) must be shaped by one of the above-mentioned specific grounds for modification or reversal; they cannot be general pleas for relief. United States v. Deutsch, 981 F.2d 299, 301 (7th Cir. 1992). Finally, as this Court has noted in prior decisions, "the Court's opinions `are not intended as mere first drafts, subject to revision and reconsideration at a litigant's pleasure.'" Arenson, 161 F.R.D. at 357 (quoting Quaker Alloy Casting Co. v. Gulfco Indus., Inc., 123 F.R.D. 282, 288 (N.D.Ill. 1988)).
It is with these principles in mind that we turn to Wright's Motion for Reconsideration.
III. ANALYSIS
In the instant case, Wright seeks reconsideration on the grounds that the Court erred in ordering her to tender back the $6,056.25 she received from Heritage as a prerequisite to proceeding with her lawsuit. In support of her motion, Wright argues that: (1) the Release was not supported by valid consideration; (2) as a matter of law, she is not required to tender back the $6,056.25; or (3) in the alternative, the Court should allow her to proceed absent immediate tender because she has made an offer to "restore the consideration" to Heritage. (R. 27, Pl.'s Reply Br. in Support of Pl's Mot. for Recons.) As discussed in detail below, Wright's arguments are insufficient to warrant reconsideration under Rule 60(b).
A. Consideration
It is well settled that an employee may waive her Title VII rights in a private settlement with her employer provided that her consent to the release is both knowing and voluntary. Alexander v. Gardner-Denver Co., 415 U.S. 36, 52 (1974); Riley v. Am. Family Mut. Ins. Co., 881 F.2d 368, 371 (7th Cir. 1989). Once an employee has knowingly and voluntarily signed such a release, she "may not rescind [this] contract without returning to the other party any consideration received under it." Fleming v. United States Postal Serv. AMF O'Hare, 27 F.3d 259, 260 (7th Cir. 1994). A release is subject to the rules governing the construction of contracts. Szpila v. Amana Refrigeration, Inc., No. 97 C 3198, 1998 WL 214710, at *2 (N.D. Ill. Apr. 24, 1998). As such, consideration for a release is relatively easy to show. Id., at *3 (citation omitted), Courts will not inquire into the adequacy of the consideration, but only its existence. Curtis 1000, Inc. v. Suess, 24 F.3d 941, 945 (7th Cir. 1994); see also Bernstein v. Glavin, 725 N.E.2d 455, 461 (Ind.Ct.App. 2000) (it is improper for courts to inquire into the adequacy of consideration).
Wright does not dispute that she signed the Release, which contained clear release language, provided that Wright had forty-five days to review the Release, advised Wright to consult an attorney, and granted Wright a seven-day revocation period following her execution of the Release. Nor does Wright dispute that she received more than $6,000 in payments from Heritage after she signed the Release. Instead, Wright argues that she is not required to tender back the $6,056.25 because it was not valid consideration for signing the Release, but rather severance that she otherwise was entitled to under Heritage's policy. While this Circuit recognizes an exception to the tender back rule when the payment received by the plaintiff only represents wages due, as opposed to additional compensation for releasing a disputed or disputable claim, id. at 261, this exception does not apply to the case at bar.
Wright argues that the funds paid to her by Heritage were funds due to her as severance pay under Heritage's policy. (R. 27, Pl.'s Reply Br. in Support of Pl.'s Mot. for Recons. at 2.) The only evidence that Wright provides in support of this allegation is her own assertion that, "[o]n information and belief, I was entitled to the amount I received as ordinary severance pay given to all employees in good standing at termination." (R. 27, Pl.'s Reply Br. in Support of Pl.'s Mot. for Recons. Ex. 1, Regina Wright Aff. at ¶ 6.) This statement is both conclusory and devoid of facts, and thus does not advance Wright's argument.
Heritage, on the other hand, contends that Wright did receive valuable consideration, consideration to which she was not otherwise entitled. (R. 19, Def.'s Reply Br. in Support of Def.'s Mot. for Summ. J. at 5.) In support of this assertion, Heritage has offered the Affidavit of Lester K. Li, in which Li explained Heritage's severance policy. (R. 20, Evid. in Support of Def.'s Reply Br. in Support of Def.'s Mot. for Summ. J. Ex. 1, Lester K. Li Aff.) Li explains that, contrary to Wright's conclusions, at the time of Wright's termination, Heritage did not pay severance to all terminated employees. Rather, Heritage payed severance only to those terminated employees who signed releases similar to that signed by Wright. ( Id. at ¶ 5.)
Wright offers no evidence to dispute Li's affidavit, or to establish that the Release was not supported by consideration. Consequently, the exception to the tender back rule, excusing tender back where plaintiff, in exchange for the release, only obtained something to which she was already entitled, does not apply. Wright's argument does not fall within any of the specific grounds for relief enumerated in Rule 60(b), and therefore does not adequately support Wright's Motion for Reconsideration.
B. Tender Back Under Title VII
Wright also argues that, as a matter of law, she is not required to tender back the $6,056.25 prior to proceeding with her Title VII lawsuit. We disagree. In a Title VII lawsuit, a plaintiff must tender back any consideration she received before she can reassert the legal claims she previously relinquished under a release. See Fleming, 27 F.3d at 262 (holding that the plaintiff in a Title VII case, who received $75,000 in exchange for relinquishing her legal claims, would have to return the $75,000 if she wanted to reassert those legal claims).
As Wright correctly pointed out, the Seventh Circuit recognizes an exception to the tender back requirement where the claim is based on a federal statute that specifically limits a class of releases. See id. at 261 (recognizing that when federal law limits a class of releases, as in cases under the Federal Employers' Liability Act, the Jones Act, or the Age Discrimination in Employment Act, each of which regulates releases, the common law rule requiring tender as a prerequisite to recission may have to give way). However, where a suit is brought under a federal law that does not limit the class of releases, such as Title VII, the tender back requirement is not excused. Id. at 261-62.
In support of her argument, Wright cites several cases that involve statutes that specifically regulate releases and therefore are not controlling with respect to the case at bar. See, e.g., Oubre v. Entergy Operations, Inc., 522 U.S. 422 (1998) (holding that a release which did not comply with the requirements of the Older Workers Benefit Protection Act could not bar an employee's ADEA claims, even though the employee had not returned the monies she received for signing the release); 0berg v. Allied Van Lines, Inc., 11 F.3d 679 (7th Cir. 1993) (tender back not required for plaintiff to pursue a claim under the ADEA); Blackwell v. Cole Taylor Bank, No. 96 C 0902, 1997 WL 156483 (N.D.Ill. Mar. 31, 1997) (where allocation of consideration between ADEA and Title VII claims would not be possible, tender back may be excused). Wright cites only one case, Rangel v. El Paso Natural Gas Co., 996 F. Supp. 1093 (D. N.M. 1998), in which tender back was not required in a Title VII lawsuit. However, the holding in Rangel is inconsistent with the controlling precedent in this Circuit and therefore will not be relied upon by the Court.
We have before us strictly a Title VII claim. Therefore, this Court is bound by the precedent set by the Seventh Circuit in Fleming. We do not agree with Wright's assertion that the case at bar is distinguishable from Fleming or that this case presents circumstances which the Fleming court announced would excuse the tender back requirement. (R. 27, Pl.'s Reply Br. in Support of Pl.'s Mot. for Recons. at 5.) To the contrary, the facts in this case make it clear that we should apply the tender back rule. Accordingly, we deny Wright's Motion for Reconsideration.
Wright's Motion for Reconsideration is based on the premise that tender back is not required under Title VII. Therefore, Wright's state law claims for breach of implied contract and breach of written contract will not weigh into the Court's analysis.
C. Wright's Offer to Tender Back the Consideration Over Time
Finally, relying on Fleming, Wright argues in the alternative that a mere offer, in the pleadings, to tender back consideration is sufficient for a Title VII suit to proceed. We disagree. The Fleming court never decided this issue. Rather, the court found that whether the tender must always precede the institution of the suit or whether it is enough that the complaint contains an offer to restore the consideration, is of"no importance in this case" because "[n]either tender nor offer was made" by the plaintiff. Fleming, 27 F.3d at 261. Wright has identified no controlling case law that calls for such an approach in a Title VII case. This general plea for relief does not warrant reconsideration under Rule 60(b). Deutsch, 981 F.2d at 301.
IV. CONCLUSION
Wright has not met her burden under Federal Rule of Civil Procedure 60(b), and therefore Wright's Motion for Reconsideration of the Court's April 27, 2000 Order is denied. (R. 22, April 27, 2000 Order). The case is dismissed without prejudice with leave to reinstate once Wright has tendered back the $6,056.25 she received in exchange for executing the Release. If Wright is unable to tender a lump sum, the Court will allow Wright to begin to tender back the $6,056.25 to Heritage in installments. Once the full $6,056.25 has been tendered back to Heritage, Wright's lawsuit will be reinstated,