the employee was already entitled by contract or law, (7)
whether the employer encouraged or discouraged the employee's
consultation with an attorney, and (8) whether the employee had
a fair opportunity to consult an attorney.
These factors weigh heavily in favor of the defendant.
Plaintiff has an M.B.A. and considerable business experience.
Plaintiff had the agreement for forty days before he was
required to sign it and had fifteen days to reconsider Chase's
offer after his counter offer was rejected. With respect to the
plaintiff's role in determining the terms of the agreement, the
fact that Chase's offer was accepted in its original form does
not in any way bolster plaintiff's case. The offer, counter
offer, and eventual acceptance of the original offer constitute
a negotiation, and the fact that defendant was unable
successfully to negotiate an acceptance of its original offer
does not diminish the fact that plaintiff did bargain with the
defendant. See Bormann 875 F.2d at 403 n. 1.
Plaintiff further admits in his deposition that he understood
the agreement and that the terms were clear. In all events, the
terms of the waiver should have been clear to a man of Mr.
Joseph's education and business experience. Moreover, plaintiff
had fair opportunity to consult and did consult with an
attorney before signing the acceptance. Joseph disputes Chase's
claim that employees were encouraged to consult with an
attorney before agreeing to the VRP, but he does not claim that
he was in any way discouraged from doing so. Finally, plaintiff
received benefits in excess to those he was entitled to under
the standard retirement plan in consideration for the waiver.
Defendant urges this Court to interpret the Bormann list of
factors as being comprehensive. It is not. These factors
comprise only some of those which can be considered in a
totality of circumstances test, and the Court is careful to
state that it is not attempting to delineate an exhaustive list
of factors. Bormann, 875 F.2d at 403.
Plaintiff argues that, although the release appears effective
under the criteria listed above, it should not be enforced
because it was signed under duress. It is plaintiff's
contention that the voluntary retirement plan constituted
coercion in his case because, given the corporation's past
pattern and the likelihood of future mistreatment, the
opportunity to retire early with enhanced benefits was an
option too good to pass up. Nothing in Bormann prohibits this
Court from considering this argument.
The effectiveness of releases is governed by principles of
contract law. Bank of American National Trust and Savings
Association v. Gillaizeau, 766 F.2d 709, 715 (2d Cir. 1985);
Restatement (Second) of Contracts § 284 comment c (1981). Under
New York Law, "[a] contract is voidable on the ground of duress
when it is established that the party making the claim was
forced to agree to it by means of a wrongful threat precluding
the exercise of his free will." First National Bank of
Cincinnati v. Pepper, 454, F.2d 626, 632 (2d Cir. 1972)
(quoting Austin Instrument, Inc. v. Loral Corp., 29 N.Y.2d 124,
324 N.Y.S.2d 22, 25, 272 N.E.2d 533, 535 (1971)).
The Restatement recognizes three types of duress: duress by
physical compulsion, duress by threat, and undue influence. In
this case there is no allegation of physical compulsion or
overt threat such as a threat of firing. Nor does the doctrine
of undue influence apply. That doctrine requires unfair
persuasion by a person who, because of his relation to the
victim, is justifiably assumed by the victim at the time to be
one who will not act in a manner that is inconsistent with the
victim's welfare. Restatement (Second) of Contracts §
176 (1981). There is no allegation that Chase overtly attempted to
persuade Joseph to sign up for the voluntary retirement plan.
Nor can the relationship between an employer that the employee
believes is discriminating against him and that employee be one
in which the employee is justified in assuming that the
employer will not act in any manner inconsistent with his
welfare. In fact, the opposite
assumption existed in this case. Joseph was certain that Chase
was treating him unfairly.
Courts in the Second Circuit also recognize economic duress.
"To establish economic duress a plaintiff must demonstrate that
the agreement was obtained: (1) by means of wrongful threat
precluding the exercise of free will; (2) under the press of
financial circumstances; (3) where circumstances permitted no
other alternative." Nelson v. Stanley Blacker, Inc.,
713 F. Supp. 107, 110 (S.D.N.Y. 1989). Plaintiff argues that there
was an implicit threat of further discrimination based on his
prior mistreatment at Chase, but he fails to allege or present
evidence as to his financial circumstances or the lack of any
alternative. Indeed, the record demonstrates that he could have
continued in his employment and pursued his discrimination
claims administratively or in a court of law.
Plaintiff's allegations may also suggest a claim of
constructive discharge. "Constructive discharge occurs when the
employer deliberately makes an employee's working conditions so
intolerable that the employee is forced into an involuntary
resignation." Less v. Nestle Co., Inc., 705 F. Supp. 110, 114
(W.D.N.Y. 1988) (quoting Young v. Southwestern Savings and
Loan Association, 509 F.2d 140, 144 (5th Cir. 1975)). Working
conditions must have been so difficult or unpleasant that a
reasonable person in the employee's shoes would have felt
compelled to resign. Id. Plaintiff claims that he was denied
raises and promotions to which he was entitled and that he knew
by Chase's actions toward him that he would continue to be
denied his just compensation and therefore felt compelled to
accept the VRP. Although these conditions may possibly
constitute constructive discharge, they are insufficient to
establish duress. Plaintiff could have simply resigned without
accepting the VRP and then pursued the constructive discharge
claim along with his discrimination claims. Instead, Joseph
chose to waive his constructive discharge claim along with
others in return for the enhanced benefit package. The fact
that he had this choice rules out a claim of duress which
necessarily depends on the absence of choice.
This case is analogous to O'Hare v. Global Natural Resources,
Inc., 898 F.2d 1015 (5th Cir. 1990), and Anselmo v.
Manufacturers Life Insurance Company, 771 F.2d 417 (8th Cir.
1985). In O'Hare, the employee's contract provided that he
could only be discharged for cause but that if he was fired
without cause he was entitled to certain benefits. After being
notified that he was to be terminated for cause, the employee
signed a settlement agreement under which he received some of
the benefits he would have received had he been discharged
without cause, in return for agreeing to a waiver. Applying the
Bormann totality of circumstances test, the Fifth Circuit
granted summary judgment for the employer when the employee
later tried to set aside the release on grounds of duress. The
court held that, where the plaintiff had the ability to
understand a relatively simple agreement, had received a copy
of the agreement far in advance of signing it, had consulted
with attorneys, and had received consideration for the release,
the fact that he was under stress when he signed the release
did not create a genuine issue of material fact. O'Hare, 898
F.2d at 1017.
In Anselmo, an employee entered into an employment contract
which he believed was for a term of three years and was
subsequently fired before the end of that term. When he was
notified of his termination, Anselmo was asked to sign a letter
of resignation which included a release of his legal claims in
consideration for which he received four months severance pay.
When the employee attempted to invalidate a release on grounds
of duress, the Eighth Circuit upheld the district court's grant
of summary judgment, stating:
"[T]hese facts, viewed most favorably to Anselmo nevertheless
fail to establish that he entered into the termination
agreement bereft of his free will. Although he surely
confronted a difficult dilemma — accepting the termination
perks or pursuing his legal rights under the employment
agreement — the fact
that the choice was difficult does not mean that he lacked the
requisite free will to make the decision."
771 F.2d at 420.
In a case recently decided in this circuit, Fay v. Petersen
Publishing Co., 53 Empl. Prac.Dec. (CCH) ¶ 39,992, 1990 WL
67397 (S.D.N.Y. May 17, 1990), plaintiff had signed an
employment termination agreement which included a paragraph
waiving "known or unknown claims or demands of any kind or
nature" in return for severance benefits above what he was
entitled to by law and under his employment contract. The court
determined that plaintiff had executed a valid release of his
ADEA claims according to the Bormann criteria and dismissed
the case pursuant to Federal Rule of Civil Procedure 12(b)(6)
for failure to state a claim upon which relief could be
This case too involves a plaintiff who has negotiated a
contract and now wants the benefit of his bargain without the
consideration he extended to get that benefit. On October 21,
1987, Chase made Joseph an offer of enhanced retirement
benefits and an opportunity to retire early with those added
benefits in consideration for a waiver of claims and voluntary
withdrawal from a position that Chase believed was no longer
necessary, Joseph counter offered for the same package but with
no claim waiver. Chase rejected the counter offer, and Joseph
subsequently accepted the original offer. Joseph was not
threatened by this offer; he was given a choice. He could stay
on at his job at the status quo and pursue his claims in court
or retire early with enhanced benefits. This was a difficult
choice, but the cases establish that difficult choices do not
Rule 56(e) of the Federal Rules of Civil Procedure requires
that, when a summary judgment motion is made and supported by
evidence, the non-moving party may not rest upon the mere
allegations of his pleadings to defeat the motion but must
present specific facts showing that there is a genuine issue
for trial. See also Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 251, 106 S.Ct. 2505, 2511-12, 91 L.Ed.2d 202 (1986).
Defendant has presented excerpts of plaintiff's deposition
which show that the Bormann criteria have been met. For
plaintiff to defeat the motion he must present evidence
sufficient to make out a valid claim of duress. Plaintiff has
not presented such facts.
Construing the available evidence in the manner most favorable
to the non-moving party, as a court must in deciding a motion
for summary judgment, plaintiff has not put forth sufficient
evidence to provide a basis for a finder of fact to conclude
that Chase subjected him to wrongful compulsion or duress.
Plaintiff is therefore bound by the terms of the VRP and has
waived his right to litigate the claims set forth in this
For the reasons set forth above, defendant's motion for summary
judgment is granted.
The Clerk is directed to enter judgment dismissing the
complaint and to mail a copy of the within to all parties.