Opinion
NO. 22-CA-433
03-29-2023
Scott SMITH, and Julie Smith v. MILLENNIUM GALVANIZING, LLC, and Crest Industries, LLC
COUNSEL FOR PLAINTIFF/APPELLANT, SCOTT SMITH AND JULIE SMITH, J. Arthur Smith, III, Baton Rouge, J. Arthur Smith, IV, Robert M. Schmidt, Christopher J. Roy, Alexandria COUNSEL FOR DEFENDANT/APPELLEE, CREST INDUSTRIES, LLC & MILLENNIUM GALVANIZING, LLC, Christine S. Keenan, Baton Rouge, Mary K. Gimber
COUNSEL FOR PLAINTIFF/APPELLANT, SCOTT SMITH AND JULIE SMITH, J. Arthur Smith, III, Baton Rouge, J. Arthur Smith, IV, Robert M. Schmidt, Christopher J. Roy, Alexandria
COUNSEL FOR DEFENDANT/APPELLEE, CREST INDUSTRIES, LLC & MILLENNIUM GALVANIZING, LLC, Christine S. Keenan, Baton Rouge, Mary K. Gimber
Panel composed of Judges Fredericka Homberg Wicker, Robert A. Chaisson, and John J. Molaison, Jr.
WICKER, J.
In this employment litigation arising out of claims alleged under the Louisiana Employment Discrimination Law, La. R.S. 23:301, et seq. , plaintiffs, Scott and Julie Smith, seek review of the trial court's May 16, 2022 judgment granting defendants’, Millennium Galvanizing, L.L.C. and Crest Industries, L.L.C.’s, motion for summary judgment and dismissing plaintiffs’ suit against them. For the following reasons, we affirm.
On July 31, 2020, plaintiffs filed an employment discrimination suit against Mr. Smith's employer, defendant Millennium Galvanizing, L.L.C., and its parent company, Crest Industries, L.L.C. Plaintiffs alleged that Mr. Smith was employed by Millennium and/or Crest as a structural supervisor for approximately three years from 2016 until his termination on March 7, 2019. At the time of his termination, Mr. Smith was 57 years old. In their petition, plaintiffs asserted only state law claims arising under the Louisiana Employment Discrimination Law, La. R.S. 23:301, et seq ., contending that the purported reason for Mr. Smith's termination—a reduction in work force—was pretextual and that he in fact was terminated or selected for the reduction in force because of his age. Mrs. Smith asserted a loss of consortium claim arising out of her husband's discrimination claim.
Plaintiffs initially filed suit in the 9th Judicial District Court for the Parish of Rapides. After defendants filed an exception of improper venue, the parties on July 6, 2020, filed a joint motion for change of venue to the 23rd Judicial District Court for the Parish of St. James. On July 10, 2020, the trial court issued a judgment transferring the case to the 23rd Judicial District Court. On September 20, 2020, defendants filed an exception of prescription and no cause of action. As to the issue of prescription, defendants contended that the filing of suit in the improper venue did not interrupt prescription and, thus, plaintiffs’ suit, filed in the proper venue more than one year after Mr. Smith's termination, was prescribed. On October 16, 2020, plaintiffs filed an amended petition claiming that the doctrine of contra non valentum suspended prescription in this case because defendants concealed material information concerning the age of Mr. Smith's replacement that prevented Mr. Smith from properly asserting an age discrimination claim. On March 23, 2021, the trial court granted defendants’ exception of prescription, dismissing plaintiffs’ suit. Plaintiffs filed a timely motion for new trial, contending that the decision to terminate Mr. Smith was made at a meeting in Rapides Parish and, thus, the suit initially filed in Rapides Parish had been filed in the proper venue. On April 14, 2021, the trial court issued a judgment granting plaintiffs’ motion for new trial and vacating its prior March 23, 2021 judgment on the exception of prescription. Defendants reurged their exception of prescription on a different ground, which was not considered by the trial court prior to the granting of summary judgment.
Plaintiffs alleged that Millennium, Mr. Smith's employer, was a wholly owned subsidiary of Crest.
On August 12, 2021, defendants filed a motion for summary judgment, contending that Mr. Smith knowingly and voluntarily signed a Severance Agreement and Release in which he waived all legally waivable claims that could have been brought against his employer, Millennium, and its parent company, Crest. In support of their motion for summary judgment, defendants submitted the affidavit and deposition testimony of Lori Patrick.
Ms. Patrick, the Human Resource manager for Crest Operations, testified that she has three certifications in Human Resources and that she also provides Human Resource management services for Millennium Galvanizing. She testified that in late 2018, she began evaluating Millennium's workforce for redundancies and inefficiencies. Shortly thereafter, she spent one to two days per week at the Convent, Louisiana facility evaluating and observing employees and gathering data to prepare for a reduction in work force.
Ms. Patrick attested that Mr. Smith was employed by Millennium from November 2015 through March 7, 2019, at the Convent, Louisiana facility. She further attested that Mr. Smith was terminated "as part of a reduction-in-force" and that Mr. Smith and "ten others were informed of the reduction in force in a group meeting" on March 7, 2019. Ms. Patrick specifically recalled handing a copy of the "Severance Agreement and Release" to Mr. Smith at the group meeting. She advised Mr. Smith that if he chose to sign the severance agreement, he would be provided severance pay in the amount of $3,076.92 in exchange for the release of his claims against his employer. Ms. Patrick attested that she received the last page of the "Severance Agreement and Release" signed by Mr. Smith in the mail on March 11, 2019.
Ms. Patrick attached to her affidavit an envelope stamped "Received" dated March 11, 2019.
Ms. Patrick further attested that Mr. Smith received his severance payment via direct deposit, and had not attempted to tender back the payment. Ms. Patrick also attested that Mr. Smith was compensated separately for accrued and unused Paid Time Off in addition to the severance payment. Ms. Patrick attested that she prepared the paperwork to the Louisiana Workforce Commission which plaintiff asserted did not reflect the severance payment. However, Ms. Patrick explained that "for terminations in which Millennium offers to pay a severance conditioned on a release of claims, Millennium does not identify the severance pay on the Separation Notice. It is Millennium's position that the severance pay in those situations is paid in exchange for the release of claims not as wages due and owing or as a substitute for lost wages."
At the hearing on the motion for summary judgment, plaintiffs’ counsel acknowledged that plaintiffs never offered to return the severance payment deposited; counsel made an offer at the hearing to, at that time, submit a check to the court for the amount of the severance payment. Counsel did not introduce or proffer any payment as an exhibit in connection with the opposition to the motion for summary judgment.
Defendants also submitted the deposition of John Doggett, the Chief Administrative Officer of Crest Operations, a wholly owned subsidiary of Crest Industries, L.L.C. He explained that Crest Industries is the sole member of Millennium Galvanizing.
Defendants also submitted the deposition testimony of Donnie Roberts, the President of Millennium Galvanizing, who testified that at the time of Mr. Smith's termination, the company had been struggling financially. Mr. Roberts’ intent for the reduction in work force was to shrink the business and to "fill the gap" of those job duties with existing employees. He testified that Ms. Patrick did assessments and compiled a list of 11 to 12 employees for him to consider laying off. He testified that the list did not include the employees’ ages. He stated that he went over the list with the plant management supervisors to get their input but that Mr. Roberts had the final decision as to which employees would be laid off.
Defendants further submitted the March 7, 2019 correspondence referred to as the Severance and Release Agreement from Millennium and Crest to Mr. Smith, informing Mr. Smith of his termination due to a reduction in work force and further setting out information concerning insurances, accrued leave pay, and unemployment options. In the second paragraph of the agreement, the following appeared in bold and capitalized letters:
BY SIGNING THIS AGREEMENT, YOU WILL BE GIVING UP VALUABLE LEGAL RIGHTS. FOR THIS REASON, IT IS VERY IMPORTANT THAT YOU CAREFULLY REVIEW AND UNDERSTAND THE AGREEMENT BEFORE SIGNING IT. THE DEADLINE FOR ACCEPTING THIS AGREEMENT IS FORTY FIVE (45) DAYS FROM THE DATE OF RECEIPT OF THIS DOCUMENT. IF YOU DO NOT SIGN AND RETURN THIS DOCUMENT WITHIN THE FORTY FIVE (45) DAY PERIOD, THIS OFFER OF SEVERANCE AND BENEFITS WILL EXPIRE. THE COMPANY ENCOURAGES YOU TO TAKE ADVANTAGE OF THIS PERIOD OF TIME BY CONSULTING WITH A LAWYER BEFORE SIGNING THE DOCUMENT.
The Severance Agreement thereafter contained a section titled, "Release" which stated the following, in bold and capitalized letters:
THIS SECTION OF THE AGREEMENT IS A RELEASE OF LEGAL CLAIMS. IN THIS SECTION, YOU ARE AGREEING TO RELEASE
YOUR RIGHT TO SUE THE COMPANY AND THE OTHER RELEASEES DEFINED BELOW FOR ALL CLAIMS THAT AROSE UP TO THE DATE OF THE AGREEMENT. PLEASE CAREFULLY REVIEW THIS SECTION WITH YOUR ATTORNEY, OR OTHER TRUSTED ADVISOR, AND DO NOT SIGN THIS DOCUMENT UNLESS YOU UNDERSTAND WHAT THIS SECTION SAYS.
The Severance Agreement further advised that "this means that by signing this Agreement you are agreeing not to bring a legal action against the Company...for any type of claim arising from conduct that occurred any time in the past and up to and through the date you sign this document." The agreement further explained: "By way of example, this release includes claims against the Company Releasees under the laws or regulations concerning discrimination on the basis of race, color, creed, religion, age, sex...or any other category protected under federal or state law." To further describe the waiver of discrimination claims, the Severance Agreement explained:
(c) For avoidance of doubt, by signing this Agreement you are agreeing not to bring any waivable claims against the Company Releasees...under the following nonexclusive list of discrimination, wage, and employment statutes:...The Louisiana Employment Discrimination Law, La. R.S. 23:301, et seq.
The Agreement further contains a section titled, "Waiver of Rights and Claims Under the Age Discrimination in Employment Act of 1967:"
Since you are 40 years of age or older, you are being informed that you have or may have specific rights and/or claims under the Age Discrimination in Employment Act of 1967 (ADEA) and you agree that:
(a) in consideration for the amounts described in Section 2 of this Agreement, which you are not otherwise entitled to receive, you specifically and voluntarily waive such rights and/or claims under the ADEA you might have against the Company Releasees to the extent such rights and/or claims arose prior to the date this Agreement was executed;
(b) you understand that rights or claims under the ADEA which may arise after the date this Agreement is executed are not waived by you;
(c) you are advised to consider the terms of this Agreement carefully and consult with or seek advice from an attorney of your choice or any other person of your choosing prior to executing this Agreement;
(d) you have carefully read and fully understand all of the provisions of this Agreement, and you knowingly and voluntarily agree to all of the terms set forth in this Agreement; and
(e) in entering into this Agreement you are not relying on any representation, promise or inducement made by the Company or its attorneys with the exception of those promises described in this document.
The Severance Agreement stated that the employee would have "forty-five (45) days to review this Agreement and consider it before signing it." It further provided for a 7-day revocation period, in which the employee could "revoke this Agreement for a period of seven (7) days after signing it." Finally, immediately above the employee's signature, the Agreement contains a paragraph in bold and capitalized letters stating:
I REPRESENT THAT I HAVE READ THIS AGREEMENT, THAT I FULLY UNDERSTAND THE
TERMS AND CONDITIONS OF THE AGREEMENT AND THAT I AM KNOWINGLY AND VOLUNTARILY EXECUTING THE AGREEMENT. IN ENTERING INTO THIS AGREEMENT, I DO NOT RELY ON ANY REPRESENTATION, PROMISE OR INDUCEMENT MADE BY THE COMPANY OR ITS
REPRESENTATIVES WITH THE EXCEPTION OF THE CONSIDERATION DESCRIBED IN THIS DOCUMENT.
In opposition to the motion for summary judgment, plaintiffs contended that Mr. Smith did not knowingly and voluntarily enter into the Severance and Release agreement because it was not "capable of being understood by the average person." Plaintiffs further asserted that Millennium "withheld material information [Mr. Smith] needed to consider if he had an age discrimination claim," asserting that Millennium was required to provide a list of the "names and ages of all other employees purportedly terminated in the reduction of force." Plaintiffs argue that federal law, which requires that the employer provide "the job titles and ages of all individuals eligible or selected for the program, and the ages of all individuals in the same job classification or organizational unit who are not eligible or selected" prior to accepting a knowing and voluntary waiver, should apply in this case.
In support of their opposition to the motion for summary judgment, plaintiffs submitted the affidavit of Mr. Smith, wherein he attested that he has a high school education with a "C average." He further attested that he was 57 years old at the time of his termination and that he was not provided a list of names or ages of the other persons affected or terminated by the reduction in workforce.
The record reflects that the hearing on defendants’ motion for summary judgment was continued on at least one occasion to allow the parties the opportunity to conduct further discovery as to the circumstances surrounding the execution of the Agreement signed by Mr. Smith.
Mr. Smith attested that at the meeting during which he was terminated, he was handed a large packet of paperwork, and told to contact the company if he had any questions. He stated that he went home and discussed the paperwork with his wife, but that she was unable to assist him in understanding the agreement. Mr. Smith attested to his understanding that he needed to sign the paperwork provided in order to be paid for his accrued leave and wages due.
In reply, defendants asserted that federal law, specifically the requirements set forth in the Older Workers’ Benefits Protection Act ("OWBPA"), does not apply to state employment discrimination claims and, thus, Millennium was not required to provide Mr. Smith with any list of the other terminated employees. Further, Millennium pointed out that Mr. Smith never returned the severance payment and, thus, has ratified the agreement by his failure to return the consideration for the agreement.
On February 14, 2022, the trial court conducted a hearing on defendants’ motion for summary judgment. The trial judge took the matter under advisement. On March 11, 2022, the trial court issued a written judgment granting defendants’ motion for summary judgment. On May 16, 2022, following a motion to amend filed by defendants, the trial court amended its judgment to include the necessary decretal language for a final, appealable judgment pursuant to Input/Output Marine Systems, Inc. Plaintiffs have timely appealed the May 16, 2022 final judgment.
Input/Output Marine Sys., Inc. v. Wilson Greatbatch, Techs., Inc. , 10-477 (La. App. 5 Cir. 10/29/10), 52 So.3d 909.
Discussion
On appeal, plaintiffs contend that the trial court erred in granting summary judgment in this case because there remain genuine issues of material fact as to whether Mr. Smith knowingly and voluntarily waived his right to assert a discrimination claim against defendants. Plaintiffs argue first that, as required under the OWBPA, defendants should have provided Mr. Smith with a list of the names and ages of all employees terminated as a part of the reduction in workforce decision. Plaintiffs contend that because defendants concealed this information, Mr. Smith could not determine if he in fact had an age discrimination claim and, thus, his waiver was not knowingly and voluntarily made. Plaintiffs further argue that Mr. Smith's waiver was not knowing and voluntary because the Agreement was not written in a manner in which an employee with Mr. Smith's high school education level could understand it.
This Court has addressed nearly identical issues to those presented in this appeal. In Comeaux v. Entergy Corp. , 98-451 (La. App. 5 Cir. 4/14/99), 734 So.2d 105, writ denied , 99-1368 (La. 7/2/99), 747 So.2d 21, this Court held that Louisiana law does not mandate compliance with the strict federal statutory requirements under the OWBPA for age discrimination claims. The underlying facts of our Comeaux decision are as follows:
Mr. Comeaux, a long-time employee of Entergy, received a poor evaluation based on the newly instituted ranking scheme. He was then given the choice of maintaining his position with Entergy, with the understanding that he would be required to follow a specific individually-implemented improvement plan to boost his ranking, or accepting a voluntary severance package, pursuant to which he would have to sign a waiver of any future employment-related claims. Mr. Comeaux chose the severance package, his employment was terminated, and he waived all future claims. Some time later, Mr. Comeaux sued Entergy for age discrimination. Entergy brought a motion for summary judgment, which the trial court denied.
Aubert v. Entergy Corp. , 00-30 (La. App. 5 Cir. 5/30/00), 762 So.2d 288, 290-91.
In Comeaux , this Court subsequently granted Entergy's writ application, reversed the trial court judgment, and dismissed Mr. Comeaux's claims against Entergy. Thereafter, on remand from the Louisiana Supreme Court for full briefing, this Court held that the OWBPA does not apply to state age discrimination claims. Thus, because Mr. Comeaux only sued Entergy under state law, the restrictive federal statute did not apply. We further found that Mr. Comeaux executed the waiver knowingly and voluntarily, and thus, Mr. Comeaux validly released Entergy from all employment-related claims.
The nearly identical issue was presented again to this Court in Aubert Entergy Corp, supra, wherein this Court considered the issue of whether "the trial court err[ed] in relying on this Court's decision in Comeaux v. Entergy Corp ., 98-451 (La. App. 5 Cir. 4/14/99), 734 So.2d 105, writ denied , 99-1368 (La. 7/2/99), 747 So.2d 21, to conclude that the federal Older Workers Benefits Protection Act does not apply to state law claims[.]" We revisited the Comeaux decision and instructed: "We hold once again that, because Louisiana law does not mandate compliance with OWBPA, and the appellants’ claims are solely based on state law, the strict federal statutory requirements on waivers in age discrimination cases do not apply here."
In this case, we find again that this Court has unequivocally held that the stringent requirements under the OWBPA do not apply to state law claims. See Aubert , supra and Comeaux , supra . Therefore, we find that plaintiffs’ assertion that defendants were required to provide Mr. Smith a list of all employees’ names and ages who were terminated based on the reduction-in-work force decision has no merit.
We further point out that the evidence submitted in connection with the motion for summary judgment indicates that a "group meeting" took place for the termination and inferences that the other terminated employees were face-to-face in the in-person meeting.
We further find, considering all evidence submitted in connection with the motion for summary judgment, that there is no genuine issue of material fact as to whether Mr. Smith's waiver was voluntary and knowing. A transaction or compromise is an agreement between two or more persons, who, for preventing or putting an end to a lawsuit, adjust their differences by mutual consent. La. C.C. art. 3071 ; Randall v. Martin , 03-1311 (La. App. 5 Cir. 2/23/04), 868 So.2d 913, 915. A waiver of age discrimination claims is a release or compromise that must be knowing and voluntary. Comeaux, supra .
As demonstrated above, the Severance Agreement contained, in multiple locations throughout the five page document and in bold and capitalized letters, statements advising the employee that he would be waiving valuable legal rights by signing the document and further instructing the employee to consult with an attorney or other individual if he did not understand the terms of the agreement. The Severance Agreement advised in bold and capital letters: "BY SIGNING THIS AGREEMENT, YOU WILL BE GIVING UP VALUABLE LEGAL RIGHTS" and "THIS SECTION OF THE AGREEMENT IS A RELEASE OF LEGAL CLAIMS." It further advised of the forty-five-day revocation period and advised the employee to take that time to "CAREFULLY REVIEW THIS SECTION WITH YOUR ATTORNEY, OR OTHER TRUSTED ADVISOR, AND DO NOT SIGN THIS DOCUMENT UNLESS YOU UNDERSTAND WHAT THIS SECTION SAYS."
The record reflects that Mr. Smith took the Severance Agreement home for review and reviewed the Agreement with his wife. Although Mr. Smith's affidavit indicates that he did not understand the Agreement, there are multiple locations that instruct and direct the employee to seek advice from an attorney or other individual for explanation.
Under the facts of this case, we find that the trial judge correctly determined that there are no genuine issues of material fact and that Mr. Smith's execution of the Severance Agreement was knowing and voluntary. Further, because we find summary judgment appropriate as to Mr. Smith's claims, we further find that summary judgment is appropriate as to Mrs. Smith's claim for loss of consortium. Accordingly, the trial court's May 16, 2022 judgment granting defendants’ summary judgment and dismissing plaintiffs’ suit is affirmed.
Loss of consortium claim is derivative claim based upon the primary victim's recovery. Nicholas v. Allstate Ins. Co. , 99-2522 (La. 8/31/00), 765 So. 2d 1017, 1031.