Opinion
No. CV-07-5006582
August 12, 2011
MEMORANDUM OF DECISION
This lawsuit arises from the alleged breach of a severance agreement by the defendant, Judith Bokina, who is a former employee of the plaintiff, A.O. Sherman, LLC. The plaintiff alleges in its complaint actions for breach of contract, unjust enrichment and breach of the implied covenant of good faith and fair dealing. The issue to be decided is whether the plaintiff's summary judgment motion on the first count brought in breach of contract should be granted. For the reasons hereinafter discussed, the motion is denied.
The following facts are not disputed. The defendant began working for the plaintiff in 1997 and was eventually promoted to its vice president of operations. On January 3, 2006, Whitcraft, LLC bought the assets of Alden O. Sherman Co., Inc., and created a new company called A.O. Sherman, LLC. On May 10, 2006, at the age of sixty-two, the defendant was informed that she was terminated from her employment. She was contemporaneously given a severance agreement for her review. The defendant signed the severance agreement in which she released the plaintiff from "every claim, action or right" arising from her employment in consideration for receiving a severance package. The plaintiff performed under the severance agreement by providing to the defendant the promised benefits.
Paragraph five of the agreement provides: "In consideration for the Plaintiff's execution of this Agreement, the Employee, her heirs, assigns and agents release, waive and discharge the Plaintiff, its affiliated and successor corporations and their former and present directors, officers, employees and agents, from each and every claim, action or right of any sort, known or unknown, arising out of or resulting from the Employee's employment with, and the termination of employment from, the Plaintiff up to and including the date of the parties' execution of this Agreement. The foregoing Release, includes, but is not limited to; (1) any claim of discrimination on the basis of race, sex, age, under both Connecticut law and the Age Discrimination and Employment Act, 29 [U.S.C.] 621 et seq. . . . (2) any other claim based upon a statutory prohibition; (3) any claim arising out of or related to an express or implied employment contract, any other contract affecting terms and conditions of employment, or a covenant of good faith and fair dealing; (4) any statutory or common law wrongful discharge claims and tort claims."
On November 6, 2006, the defendant filed a complaint with the commission on human rights and opportunities alleging that the plaintiff discriminated against her on the basis of age and sex in violation of the Connecticut Fair Employment Practices Act (CFEPA), General Statutes § 46a-51 et seq., Title VII of the Civil Rights Act of 1964 (Title VII), 42 U.S.C. § 2000e et seq. and the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. After the commission dismissed the defendant's administrative complaint on May 19, 2008, she commenced an action against the plaintiff in federal court alleging that she was a victim of sexual discrimination under CFEPA and Title VII. That action is pending. The plaintiff asserts that the defendant breached the severance agreement by bringing the administrative complaint and the federal lawsuit.
The plaintiff also filed a summary judgment motion in the federal action raising similar claims. The district court (Eginton, J.) denied the motion. By letter dated July 25, 2011, the defendant's attorney forwarded to me a copy of the decision for my apparent consideration. He properly sent a copy to counsel for the plaintiff. The plaintiff's counsel sent a letter to me dated August 4, 2011 claiming that the defendant's correspondence and attached case represented improper, ex parte communications "concerning a pending or impending proceeding." The court disagrees. Defense counsel was properly supplementing his memorandum in opposition to summary judgment. In any event, the decision of the district court was not a factor in the court's decision in the present action.
In its supporting memorandum, the plaintiff's argument concerning breach was limited to the defendant's filing of the administrative complaint. At short calendar, however, the plaintiff additionally contended that the defendant breached the agreement by pursuing litigation in federal court.
"Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." (Internal quotation marks omitted.) Mazurek v. Great American Ins. Co., 284 Conn. 16, 26, 930 A.2d 682 (2007). "[T]he `genuine issue' aspect of summary judgment requires the parties to bring forward before trial evidentiary facts, or substantial evidence outside the pleadings, from which the material facts alleged in the pleadings can warrantably be inferred. . . . A material fact has been defined adequately and simply as a fact which will make a difference in the result of the case." (Citation omitted; internal quotation marks omitted.) Buell Industries, Inc. v. Greater New York Mutual Ins. Co., 259 Conn. 527, 556, 791 A.2d 489 (2002).
"The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to judgment as a matter of law . . . As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent . . . Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue." (Internal quotation marks omitted.) Zielinksi v. Kotsoris, 279 Conn. 312, 318-19, 901 A.2d 1207 (2006).
The plaintiff asserts that it is entitled to summary judgment because it has demonstrated an absence of any genuine issue as to all the necessary elements of its claim that the defendant breached the severance agreement. The defendant counters that genuine issues exist as to whether (1) she knowingly and voluntarily assented to the severance agreement; (2) she was a party to the agreement; and (3) there was a "meeting of the minds" as to consideration. The defendant also claims that even if the agreement is enforceable, she did not breach it.
Assuming, without deciding, that the plaintiff has established a prima facie case of breach; see Rosato v. Mascardo, 82 Conn.App. 396, 411, 844 A.2d 893 (2004); the court concludes, based on the pleadings, affidavits and other proof submitted, that the defendant has raised genuine issues of material fact with respect to her defense that the agreement is invalid because she did not knowingly and voluntarily sign it. Specifically, the defendant claims that (1) she was given only three hours to sign the agreement at a time when she was in an emotional state due to her termination; (2) she played very little role in determining its terms; (3) she was neither represented by an attorney nor was she advised to consult one; and (4) and the consideration articulated in the agreement was "inexact and confusing."
Under Title VII, an employee may waive a claim of discrimination so long as the waiver is made knowingly and voluntarily. Laniok v. Advisory Committee of the Brainerd Mfg. Co. Pension Plan, 935 F.2d 1360, 1367 (2d Cir. 1991). "Congress enacted Title VII of the Civil Rights Act of 1964 . . . to assure equality of employment opportunities by eliminating those practices and devices that discriminate on the basis of race, color, religion, sex, or national origin." Alexander v. Gardner-Denver Co., 415 U.S. 36, 43, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974). "A general release of Title VII claims [however] does not ordinarily violate public policy. To the contrary, public policy favors voluntary settlement of employment discrimination claims brought under Title VII . . . [Courts] nevertheless must closely scrutinize a waiver of rights under Title VII because of their remedial nature." (Citations omitted; internal quotation marks omitted.) Stroman v. West Coast Grocery Co., 884 F.2d 458, 460-61 (9th Cir. 1989), cert. denied, 498 U.S. 854, 111 S.Ct. 151, 112 L.Ed.2d 117 (1990).
"Whether a Title VII release was properly obtained is to be determined by federal rather than state law . . . [because] federal law governs all questions relating to purported releases of federal statutory causes of action . . ." (Citations omitted.) Rogers v. General Electric Co., 781 F.2d 452, 454-55 (5th Cir. 1986). See also Ware v. State, 118 Conn.App. 65, 82, 983 A.2d 853 (2009) ("[i]n drafting and modifying [CFEPA] our legislature modeled that act on its federal counterpart, Title VII of the Civil Rights Act of 1964 . . . and it has sought to keep our state law consistent with federal law in this area . . . Accordingly, in matters involving the interpretation of the scope of our antidiscrimination statutes, courts consistently have looked to federal precedent for guidance" [citation omitted]). "In determining the effectiveness of any such waiver, a court would have to determine at the outset that the employee's consent to the settlement was voluntary and knowing." Alexander v. Gardner-Denver Co., supra, 415 U.S. 52 n. 15. In determining the enforceability of the waiver and release provisions of the severance agreement, the court must "employ a `totality of the circumstances' test to determine whether a release of Title VII claims is knowing and voluntary." Livingston v. Adirondack Beverage Co., 141 F.3d 434, 438 (2nd Cir. 1998); see also Galera v. Johanns, 612 F.3d 8, 13 (1st Cir. 2010); Hampton v. Ford Motor Co., 561 F.3d 709, 716-17 (7th Cir. 2009); Myricks v. Federal Reserve Bank, 480 F.3d 1036, 1040 (11th Cir. 2007); O'Hare v. Global Natural Resources, Inc., 898 F.2d 1015, 1017 (5th Cir. 1990). "Factors relevant to this inquiry include . . . 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 plaintiff in deciding the terms of the agreement, 4) the clarity of the agreement, 5) whether the plaintiff was represented by or consulted with an attorney, and 6) whether the consideration given in exchange for the waiver exceeds employee benefits to which the employee was already entitled by contract or law . . . In addition, courts have considered a seventh factor-whether the employer encouraged the employee to consult an attorney and whether the employee had a fair opportunity to do so." Livingston v. Adirondack Beverage Co., supra, 438.
Although "[t]he employer [first] bears the burden of establishing that its former employee signed a release that addresses the claims at issue, received adequate consideration, and breached the release . . . [i]t is then incumbent upon the former employee to demonstrate that the release was invalid" based on a totality of the circumstances. (Citation omitted; internal quotation marks omitted.) Smith v. Amedisys, Inc., 298 F.3d 434, 441 (5th Cir. 2002).
Considering all the circumstances of this case, the court finds that genuine issues of material fact exists as to whether the defendant knowingly and voluntary released the plaintiff from Title VII and CFEPA liability. Although the defendant was an experienced executive who negotiated for additional paid vacation time as part of her severance, she testified in her deposition that she was handed the agreement on the same day she was terminated, was allowed only three hours to review it, did not speak to an attorney and was not advised to consult one. Based on these circumstances, the court will leave the defendant to her proof at trial on the issue of whether her signing the severance agreement was the product of a knowing and voluntary act.
The trial courts are divided on the issue of whether an uncertified copy of a deposition may be used in support of or in opposition to summary judgment. Here, the deposition transcript was submitted to the court for its consideration in deciding the present motion without objection. Consequently, the court will consider the deposition. See Barlow v. Palmer, 96 Conn.App. 88, 91-92, 898 A.2d 835 (2006). It should be noted that the defendant has also submitted an affidavit that she filed in her administrative claim in which she sets forth the same facts.
The plaintiff asserts that even if the defendant did not voluntarily enter into the agreement, she subsequently ratified it by accepting its benefits and failing to disaffirm it within a reasonable time. The plaintiff support this claim with a letter drafted by the defendant's attorney, dated November 15, 2006, informing the plaintiff that her client was "rejecting the severance" because it was "not legal." The plaintiff claims this letter demonstrates that the defendant delayed disaffirming the agreement for six months, and therefore it is enforceable notwithstanding any issues regarding her assent.
Our Supreme Court has addressed the issue of contract ratification in a similar context. In Young v. Data Switch Corp., 231 Conn. 95, 97, 646 A.2d 852 (1994), the defendant informed the plaintiff that his employment was being terminated. The plaintiff then signed a severance agreement that entitled him to various benefits and released the defendant from all liability arising from his employment. Id., 98. He received the benefits. Id. Seventeen months after signing the severance agreement, the plaintiff asserted a claim that the agreement was voidable because it had been obtained by duress. Id., 99. The Supreme Court affirmed the trial court's decision that the plaintiff had ratified the agreement as a matter of law. Id., 104. The court relied on two principles. First, it followed §§ 380 and 381 of the Restatement (Second) of Contracts and concluded that "[r]ead in its entirety . . . the Restatement . . . imposes strict time constraints on the avoidance [of a contract] for duress" where the benefits have been retained by the avoiding party. Id., 101-02. Second, the court acknowledged that "ratification of a voidable contract is ordinarily a matter of intent [which] may be inferred from silence as well from affirmative acts." (Citation omitted.) Id., 102. The court observed that, in the seventeen months before he expressly disaffirmed the agreement, the plaintiff had several interactions with the defendant but "voiced no claim that the severance agreement was itself voidable on the ground of duress." Id., 99.
Section 380(1) of the Restatement (Second) of Contracts (1981) provides: "The power of a party to avoid a contract for incapacity, duress, undue influence or abuse of a fiduciary relation is lost if, after the circumstances that made the contract voidable have ceased to exist, he manifests to the other party his intention to affirm it or acts with respect to anything that he has received in a manner inconsistent with disaffirmance."
Section 381(1) of the Restatement (Second) of Contracts (1981) provides in relevant part: "The power of a party to avoid a contract for incapacity, duress, undue influence . . . is lost if, after the circumstances that made it voidable have ceased to exist, he does not within a reasonable time manifest to the other party his intention to avoid it." The court in Young noted that "[a]s a general matter, comment (a) to § 381 provides that `what time is reasonable depends on all the circumstances including the extent to which the delay was or was likely to be prejudicial to the other party . . . `Comment (a) to § 381 adds, however, that `ordinarily, if the party with the power of avoidance retains during the delay something that he has received from the other party, avoidance will be precluded by the rule stated in § 380.'" Young v. Data Switch Corp., supra, 231 Conn. 101.
The plaintiff points out that the court in Young cited to cases from other jurisdictions where the time period at issue ranged from two to eighteen months. Young v. Data Switch Corp., supra, 231 Conn. 103. The letter by the defendant's attorney, standing alone, does not establish that she waited six months to disaffirm the contract. "The courts hold the movant to a strict standard. To satisfy his [summary judgment] burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact." (Internal quotation marks omitted.) Zielinski v. Kotsoris, supra, 279 Conn. 318. The plaintiff has not satisfied this burden on its claim that the defendant ratified the agreement.
In view of the foregoing, the plaintiff's motion for summary judgment (115.00) on the first count of its complaint is denied.