Opinion
14565/05.
Decided March 22, 2006.
The plaintiff was represented by: Leeds Morelli Brown, P.C., William Matthew Groh, Carle Place, New York.
The defendant was represented by: Cullen and Dyckman, LLP, Thomas B. Wassel, Garden City, New York.
Upon the foregoing papers in this action by plaintiff Joseph E. Short (plaintiff) alleging violations of Executive Law § 290 et seq. and Administrative Code of the City of New York § 8-102 et seq., and breach of contract or an implied contract and fraudulent inducement to enter into an agreement, defendants KeySpan Corporate Services, LLC., KeySpan Energy Corporation (KeySpan), James K. Brennan (Brennan), and Steven A. Vitale (Vitale) (collectively, defendants) move for an order: (1) dismissing plaintiff's complaint as against defendants, pursuant to CPLR 3211 (a) (1) and (5), because of payment and release based upon documentary evidence, and (2) dismissing plaintiff's complaint as against Brennan, pursuant to CPLR 3211 (a) (5), as time-barred by the applicable Statute of Limitations.
On February 5, 1975, plaintiff commenced employment with the Long Island Lighting Company (LILCO), KeySpan's predecessor, in an engineer position in its electric production department. Plaintiff alleges that at that time, he was one of only three black engineers in that department, and that over the course of the next two years, the other two black engineers left LILCO because they were not treated equally as compared to white engineers. In 1978, plaintiff was promoted to associate engineer and, in 1980, he was promoted to plant engineer. In 1985, plaintiff was promoted to operations and controls engineer, and was the first black supervisor in the electric production department. In 1988, plaintiff was promoted to chief engineer, and, in 1990, he was promoted to plant manager, where he supervised 73 people at the E. F Barrett Power Station (Barrett).
Plaintiff claims that in 1993, he was passed over for a department manager position and defendant Brennan, who is white, was chosen for this position instead of him. He further claims that in 1994, when he was assigned to co-lead a team to interview candidates for vacancies, Brennan, in discussing the candidates' resumes, made a remark against hiring certain ethnic groups and women. Plaintiff alleges that Brennan did not mention blacks only because he was in the room. Plaintiff states that in 1996, Brennan used an incident involving a crane to unjustifiably transfer him from being the plant manager at Barrett to being the department manager of production planning in Hicksville.
Upon being transferred to the Hicksville facility, plaintiff met with Howard Kosel (Kosel) and Ed Youngling (Youngling), who were vice-presidents, to complain that his transfer was due to Brennan's discrimination against him on the basis of his race. He based this complaint on his assertion that a white employee, who was involved in a more egregious incident than the crane incident, had incurred no disciplinary action. Plaintiff also made complaint against Brennan to the human resources manager regarding Brennan's remark during the 1994 discussion with respect to candidate interviews. Plaintiff also asserts that at the time of the merger of LILCO with Brooklyn Union Gas Company (BUG) in 1998, he sent a letter to the new chairman and CEO of KeySpan, informing him of the alleged history of discrimination and the problems with Brennan. Plaintiff states that nothing was done in response to any of his complaints.
Plaintiff alleges that after the merger of LILCO and BUG, Kosel and Youngling determined that his position would be combined with another one, that he was forced to interview for this job, that he did not get this job, and that he was then designated as an employee in transition, which meant that he was an employee without a job. Plaintiff then accepted a new position to manage and implement a market intelligence system (MIS) project. Thereafter, plaintiff's former position allegedly re-appeared and was filled by a white male. After managing the MIS project, plaintiff moved over to the position of director of new products and services. He was then asked if he would be interested in heading up an initiative to take a close look at the synergy savings offered by the electric business unit, but he did not get this position. Plaintiff believed that his race played a role in this decision.
In June 2002, plaintiff was offered a position in the research development (RD) department, reporting to defendant Vitale, the vice-president of gas engineering. Since plaintiff had heard rumors that the R D department was being eliminated, he allegedly met with Vitale before giving up his position as director of new products and services and accepting the R D position, and expressed his concerns. Plaintiff claims that in reliance upon Vitale's assurances that the R D department was not "going to go away," he accepted the R D position.
In April 2003, plaintiff's R D position was eliminated, and he accepted a position in the liquid natural gas organization (the LNG position), which was a position two levels below the highest position he had achieved. In October 2003, plaintiff's LNG position was eliminated as part of a reduction in work force, which designated 3,204 positions for elimination. Plaintiff alleges that over 75% of the persons in these positions, including him, were age 40 or over. Plaintiff was given the opportunity to accept a position as a plant engineer, a lower position, under the direct control and supervision of Brennan. On October 22, 2003, plaintiff's last day of work for KeySpan, plaintiff, who was then 52 years of age, was alternatively offered a Basic Severance Package and an Enhanced Severance Package.
Since plaintiff had been an employee for 28 years, the Basic Severance Package would have provided him with a total of 37 weeks of pay, resulting in a total cash payment of $81,400. The Basic Severance Package did not provide an employee electing it with medical or dental benefits. The Basic Severance Package, however, did not require the employee to waive any potential claims he or she might have had against KeySpan. The Enhanced Severance Package provided for not more than 52 weeks of pay in one lump sum as severance (worth $115,700 to plaintiff). In addition, KeySpan would pay the cost of COBRA health insurance continuance coverage for the period for which the employee was eligible to receive severance pay. As a requirement to take advantage of the Enhanced Severance Package, however, the employee was required to complete and sign an Agreement and Waiver of Rights and Claims form.
Due to the fact that plaintiff was not yet 52 years of age on October 22, 2003, he would have had his retirement benefits reduced by 60%, would not have received early retirement benefits until age 55, and would have lost his medical and dental insurance benefits. On December 15, 2003, however, plaintiff accepted and executed an Enhanced Severance Agreement and Waiver of Rights and Claims dated October 22, 2003 (the Agreement and Release). Under the Agreement and Release, plaintiff was paid 52 weeks of salary worth $115,700. In addition, plaintiff received 10 additional weeks of pay from October 23 through December 31, 2003, worth $22,250, which was deemed a leave with pay and allowed him to retire from KeySpan in January 2004 at the age of 52 with full retirement benefits, including, but not limited to retiree medical and dental insurance. Plaintiff also received two additional weeks' severance pay (worth $4,450), was entitled to keep his laptop computer, and received extended outplacement services. The Agreement and Release expressly provided, in paragraph 7, as follows:
"7. This Agreement settles any and all claims and disputes [plaintiff] has or may have against KeySpan and its subsidiaries and affiliated companies and their officers, directors, employees and agents, whether arising from [plaintiff's] employment with KeySpan or anything else."
In addition, paragraph 12 of the Agreement and Release stated:
"12. By this Agreement . . . [plaintiff] releases [defendants] from any rights or claims [he] might have or has against them for anything arising from [his] employment, including but not limited to any claim . . . or charge of discrimination based on race, color, [or] age . . . which has been or could be initiated in a federal, state or local court . . . including but not limited to any claim under . . . the New York State Human Rights Law . . ."
Furthermore, paragraph 13 of the Agreement and Release provided:
"13. [Plaintiff] represents and warrants that [he] . . . will not file or authorize or cause to be filed on his behalf any such complaints, charges or lawsuits at any time hereafter relating to [his] employment with KeySpan or the termination of that employment or to any claims being released in this Agreement."
Paragraph 14 of the Agreement and Release gave plaintiff the right to discuss all aspects of the Agreement and Release with an attorney of plaintiff's choice and encouraged him to consult an attorney. Paragraph 15 of the Agreement and Release stated that "[t]his Agreement represent[ed] a settlement between the parties." In paragraph 16 of the Agreement and Release, plaintiff acknowledged that he understood the meaning and effect of the Agreement and Release, that he had been given a period of at least 45 days within which to consider the Agreement and Release, and that he was advised of his right to revoke the Agreement and Release within seven days after signing it. Plaintiff does not deny that he executed the Agreement and Release, never attempted to revoke it, and has accepted its benefits.
On May 6, 2005, however, 17 months following plaintiff's execution of the Agreement and Release, plaintiff commenced the instant action against KeySpan, Brennan, and Vitale. Plaintiff's complaint alleges that defendants violated Executive Law § 290 et seq. based upon a pattern and practice of wrongful discrimination against him, other minority employees, and other employees age 40 or older, and due to retaliation against him for reporting such discrimination. Plaintiff's complaint further alleges that defendants breached a contract or an implied contract, and/or fraudulently induced him to accept a position in the R D department by misrepresenting that the R D department was not being eliminated. Plaintiff seeks a judgment declaring that the practices complained of are unlawful and violative of Executive Law § 290 et seq. and Administrative Code § 8-102 et seq. Plaintiff also seeks equitable relief enjoining defendants from engaging in discriminatory practices. Plaintiff's complaint additionally requests a judgment declaring that defendants breached a contract or implied contract or fraudulently induced him to enter into an agreement. Plaintiff demands recovery of all damages sustained by him as a result of defendants' alleged conduct.
Defendants, in support of their instant motion, argue that all of the claims alleged by plaintiff in his complaint are barred by the Agreement and Release, which, in paragraphs 7, 12, and 13, expressly and unambiguously released these claims. In addressing defendants' argument, it is noted that a "release is a contract whose interpretation is governed by principles of contract law'" ( Goode v. Drew Bldg. Supply, 266 AD2d 925, 925, quoting Metz v. Metz, 175 AD2d 938, 939; see also Livingston v. Bev-Pack, Inc., 112 F Supp 2d 242, 249 [ND NY 2000]; Stone v. National Bank Trust Co., 188 AD2d 865, 867). "Where the language of the release is clear, effect must be given to the intent of the parties as indicated by the language employed'" ( Goode, 266 AD2d at 925, quoting Cramer v. Newburgh Molded Prods., 228 AD2d 541, 541; see also Stone, 188 AD2d at 867; Metz, 175 AD2d at 939).
Here, the language of the Agreement and Release indicates that, in consideration for the compensation and benefits provided, plaintiff intentionally gave up and released all claims and disputes that he had or might have with defendants without limitation. The Agreement and Release, in paragraphs 7, 12, and 13, unambiguously released defendants from any rights or claims plaintiff might have arising from plaintiff's employment, including but not limited to any claims or charges of discrimination ( see Gant v. Brooklyn Developmental Center, 307 AD2d 307, 308; Goode, 266 AD2d at 925; Cramer, 228 AD2d at 541; Stone, 188 AD2d at 867-868). The Agreement and Release specifically settled these claims and plaintiff warranted in the Agreement and Release that he would not initiate a lawsuit based thereon ( see Gant, 307 AD2d at 308; Goode, 266 AD2d at 925). Thus, unless plaintiff can demonstrate that he did not knowingly and voluntarily execute the Agreement and Release, he is bound by the terms and precluded from bringing the instant action ( see Livingston, 112 F Supp 2d at 250).
Plaintiff contends that he did not knowingly and voluntarily execute the Agreement and Release based on his frame of mind and circumstances. It is noted, however, that plaintiff is a college graduate who occupied a management position at KeySpan. His education and business experience indicate that he was fully capable of understanding the Agreement and Release ( see Nicholas v. Nynex, Inc., 929 F Supp 727, 731 [SD NY 1996]; Skluth v. United Merchants Mfrs., 163 AD2d 104, 107). The terms of the Agreement and Release clearly and unambiguously informed plaintiff of the nature of his rights and of the fact that he was relinquishing those rights by signing the release ( see Nicholas, 929 F Supp at 731; Goode, 266 AD2d at 925). Plaintiff was also given in excess of 45 days in which to decide to execute the Agreement and Release. This length of time was sufficient to enable plaintiff to make a considered choice ( see Nicholas, 929 F Supp at 731). Indeed, the Agreement and Release complied with the more stringent requirements of Federal law set forth in the Older Workers' Benefit Protection Act ( 29 USC § 626[f]) and contained all of the procedural safeguards mandated by that Act.
Plaintiff states, however, that despite his education and business experience, he was not proficient at knowing his legal rights. Plaintiff alleges that he was not represented by and did not consult with an attorney prior to executing the Agreement and Release. The Agreement and Release itself, however, informed plaintiff of his right to consult an attorney before signing it and encouraged him to do so ( see Nicholas, 929 F Supp at 731; Gant, 307 AD2d at 308; Skluth, 163 AD2d at 107). Thus, plaintiff cannot avoid the effect of this plain and unambiguous Agreement and Release on the ground that he failed to consult an attorney before signing it ( see Goode, 266 AD2d at 925; Skluth, 163 AD2d at 107).
Plaintiff also alleges that the consideration he received under the Agreement and Release was grossly inadequate. Such allegation is belied by the documentary evidence. Plaintiff, in fact, by signing the Agreement and Release, received at least $60,000 in cash benefits over and above the severance payment he would have received under the Basic Severance Package, which did not contain a waiver of rights and claims.
Plaintiff argues, however, that the Agreement and Release cannot bar his claim for recovery because he executed it under economic duress. Economic duress exists when a party is compelled to agree to the terms of a release by means of a wrongful threat that prevents the exercise of free will and where the party accepted such terms because the circumstances permitted no alternative ( see Kamerman v. Steinberg, 891 F2d 424, 431 [2d Cir 1989]; Joseph v. Chase Manhattan Bank, N.A., 751 F Supp 31, 35 [ED NY 1990]; Stewart M. Muller Constr. Co. v. New York Telephone Co., 40 NY2d 955, 956). Plaintiff bases his claim of economic duress on his assertion that the threat of having to work under Brennan precluded the exercise of any free will. He also states that he was under economic duress because he had to make mortgage payments and put a child through college, and the prospect of lost income and having to pay for medical coverage would have created financial difficulties for him.
Plaintiff's claim of economic duress must be rejected. The fact that an employee has an alternative, such as a pursuit of a discrimination claim in a court of law, "rules out a claim of duress which necessarily depends on the absence of choice" ( Joseph, 751 F Supp at 35). Here, plaintiff was not forced to work for Brennan, but could have elected to receive the Basic Severance Package and not waive his rights to pursue his claims in litigation. Plaintiff chose, however, to receive the additional monetary and other benefits which the Agreement and Release of the Enhanced Severance Package afforded, in consideration for his agreement to waive his claims against defendants ( see Nicholas, 929 F Supp at 731-732). While the compensation offered under the Basic Severance Package was lower, defendants cannot be held responsible for economic pressure or financial obligations put on plaintiff by others ( see EEOC v. American Express Pub. Corp., 681 F Supp 216, 219 [SD NY 1988]).
In addition, "[c]ontracts induced by duress are voidable, not void; acceptance of benefits under the agreement constitutes ratification" ( id.). In this case, plaintiff accepted the benefits of the Agreement and Release. In any event, "the fact that a party faces a difficult choice — between additional benefits or pursuing his [or her] legal rights — does not alone indicate lack of free will" ( id.; see also Anselmo v. Manufacturers Life Ins. Co., 771 F2d 417, 420 [8th Cir 1985]).
Furthermore, plaintiff waited 17 months prior to challenging the Agreement and Release on the grounds of duress ( see Leader v. Dinkler Mgt. Corp., 26 AD2d 683, 683, affd 20 NY2d 393; Powell v. Oman Constr. Co., 25 AD2d 566, 566). Thus, plaintiff has failed to show that he acted promptly to avoid a release on the grounds of duress ( see Livingston, 112 F Supp 2d at 250; Port Chester Elec. Constr. Corp. v. Hastings Terraces, 284 App Div 966, 967).
Consequently, the court finds that the allegations of plaintiff's complaint are inadequate to show that the Agreement and Release was procured by duress ( see Cramer, 228 AD2d at 542; Matter of Chamberlin v. Board of Educ., 200 AD2d 529, 529; Hydrodyne Indus. v. Marine Midland Bank, 118 AD2d 626, 626). Therefore, inasmuch as the court concludes that plaintiff knowingly and voluntarily entered into the Agreement and Release and waived his claims against defendants, he is foreclosed from claiming that his employment was terminated as a result of racial or age discrimination on the part of defendants ( see Dewey v. PTT Telecom Netherlands, U.S., 1995 WL 542447, *2 [SD NY 1995], affd 101 F3d 1392 [2d Cir 1996]; Gant, 307 AD2d at 308). Thus, plaintiff's causes of action alleging discrimination in violation of Executive Law § 290 et seq. and Administrative Code § 8-102 et seq. are barred by the Agreement and Release executed by plaintiff upon termination of his employment ( see CPLR 3211 [a] [1], [5]; Goode, 266 AD2d at 925).
With respect to plaintiff's breach of contract or implied contract and fraudulent inducement claims, plaintiff does not allege any terms of a contract which were breached or allege that defendants made false misrepresentations with respect to his execution of the Agreement and Release. Plaintiff only alleges that he had transferred to a new position (the R D position) more than a one year before his eventual termination from a different position (the LNG position) based upon false promises of job security. This does not pertain to fraud in the inducement to sign the Agreement and Release, which released plaintiff's claims herein and, thus, such alleged misrepresentations cannot form a basis to avoid or invalidate the release ( see Stone, 188 AD2d at 867). Consequently, these claims are also barred by plaintiff's execution of the Agreement and Release ( see CPLR 3211 [a] [1], [5]).
Defendants' motion also seeks dismissal of plaintiff's complaint as against Brennan as time-barred by the three-year Statute of Limitations ( see CPLR 214, 3211 [a][5]). Defendants predicate this branch of their motion on the fact that the alleged discriminatory statement made by Brennan occurred in 1994 (11 years prior to filing this action) and no specific discriminatory act by him is alleged with respect to plaintiff in the three years prior to plaintiff's institution of this action ( see Nielsen v. United Parcel Serv., 210 AD2d 641, 643). However, since plaintiff's complaint must be dismissed as barred by the Agreement and Release, it is unnecessary to address this branch of defendants' motion.
Accordingly, defendants' motion for an order, pursuant to CPLR 3211 (a) (1) and (5), dismissing plaintiff's complaint as against them is granted.
This constitutes the decision, order, and judgment of the court.