of time in which to consider the terms of the release before executing it.
No more compelling is Plaintiff's argument to the effect that the $ 178,001.40 he acknowledges receiving and retaining was in fact a severance payment made in contemplation of a continuing relationship between him and Defendant--and as such invalid consideration for a release of claims against the company--or his argument that, in any event, the release he signed in January is ineffective insofar as it purports to constitute a waiver of a cause of action which had not yet accrued as of January 5, 1989, the date of the document's execution. With respect to the latter contention, the Court reiterates its finding that Plaintiff's cause of action for age discrimination accrued, if at all, in October 1988 when the allegedly discriminatory elimination of Travel Management Systems went into effect; the document signed by Plaintiff on January 5, 1989, could and did effectively release Defendant from liability to Plaintiff potentially arising out of that event. As for the nature of the consideration he received and retained, Plaintiff adduces no evidence and makes no argument presenting a genuine factual issue that the payment was, in fact, made not in exchange for the release of claims but rather as a severance payment "premised on the possibility of [Plaintiff's] return to the company." (Pl's. Mem. at 19.) The language of the Release quoted by Plaintiff, to the effect that IBM retained the right to require repayment of a portion of the special payment in the event of a rehire, creates no obligation on Defendant's part to reinstate the employer-employee relationship; its inclusion in the body of the release does not convert that clearly denominated release agreement into another kind of legal instrument, and neither does Plaintiff's belief that he would be rehired, as a matter of company policy, should a job become available for him, transform a special payment in consideration of release into a severance fee. The undisputed evidence establishes that Plaintiff knew as early as August 1988 that his acceptance of the FAP would be conditioned on his signature of a legal document releasing Defendant from potential liability; he read, understood, and executed a release in January 1989, and he received at that time and has since retained a special payment of $ 178,001.40 above and beyond any amounts to which he would otherwise have been entitled.
Although Defendant's failure affirmatively to advise Plaintiff to retain legal counsel in connection with the execution of the release weighs against the company's position, the Court finds neither Plaintiff's lack of counsel nor his undisputed lack of input into the terms of the release dispositive of the voluntariness inquiry. Plaintiff concededly is not a lawyer, but he does hold both undergraduate and advanced degrees, his professional business background in Defendant's employ is extensive, and he can properly be considered neither inadequately educated nor lacking in relevant experience within the meaning of Bormann. Plaintiff does not allege that Defendant ever discouraged him in any attempt to seek independent advice, either in August 1988 in connection with his receipt of the FAP interest form and information packet or at any time thereafter. In view of the lengthy period of time between Plaintiff's initial receipt of the model release form and his signature of an essentially identical document, his admission in deposition testimony that he read and understood the release, and the straightforward language of the document and the waiver contained therein, the Court finds and concludes that the release signed on January 5, 1989, does constitute a "voluntary and knowing" release under the totality of the circumstances surrounding its execution. This conclusion is bolstered by the extent of the consideration--$ 178,001.40--Plaintiff received in exchange for his waiver of rights, and by the absence of any allegation that such sum or any part of it would have been due to Plaintiff, pursuant to either law or contract, upon his separation from the company had he not elected to sign the release and take the special payment pursuant to the FAP.
Plaintiff's final argument in opposition to the motion for summary judgment based on his execution of the release--that the initiation of proceedings before the EEOC put Defendant on notice of Plaintiff's belief that the release agreement was legally ineffective, and thus served formally to repudiate that document --is similarly unavailing.
Acknowledging, in general terms, that one who challenges the execution of an agreement as induced by duress "must act promptly to repudiate the contract or release or he will be deemed to have waived his right to do so," DiRose v. PK Management Corp., 691 F.2d 628, 633-34 (2d Cir. 1982), cert. denied, 461 U.S. 915, 77 L. Ed. 2d 285, 103 S. Ct. 1896 (1983), Plaintiff asserts that he "did immediately disavow the release . . . by filing his EEOC complaint almost immediately after he learned of IBM's discriminatory practices." (Pl.'s Mem. in Opp'n at 33.) Plaintiff misunderstands the nature of his burden under controlling case law.
As a preliminary matter, Plaintiff has not alleged that the execution of the release was procured under duress, and on this record it does not appear that he could do so. No evidence suggesting any of the three forms of duress recognized by the Restatement--threat, physical compulsion, or undue influence--is present here. See Joseph v. Chase Manhattan Bank, N.A., 751 F. Supp. 31, 34 (E.D.N.Y. 1990). Although the courts of this Circuit do recognize avoidance of contractual liability on the grounds of economic duress, Plaintiff has not established the elements of that defense--i.e., "'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.'" Id. (quoting Nelson v. Stanley Blacker, Inc., 713 F. Supp. 107, 110 (S.D.N.Y. 1989)).
Even assuming, arguendo, the existence of an allegation (or any evidence whatever to support a contention) that Plaintiff's signature on the release was procured under duress, the Court would be constrained to reject Plaintiff's assertion that the filing of the EEOC complaint suffices to establish a valid repudiation of the release agreement. Essentially, Plaintiff would have the Court find that by filing a charge in contravention of the terms of the agreement he effectively rescinded that document and freed himself of any further obligation to abide by its provisions, without thereby relinquishing his claim to the $ 178,001.40. For obvious reasons, the Court declines the invitation so to hold, and similarly rejects Plaintiff's imaginative contention that it was in fact Defendant which "waived its right with respect to the alleged release by failing to abide by its affirmative duty to demand the return of any sums it felt should have been returned." (Pl.'s Mem. at 33.) Notwithstanding the Court's holding that Plaintiff's federal cause of action is time-barred, the Court concludes that the Complaint must, in the alternative, also be dismissed in view of Plaintiff's knowing and voluntary execution of a valid release.
Motions Address to the Counterclaim
As previously noted, Defendant moves for summary judgment on the counterclaim, and Plaintiff cross-moves in the alternative for an order either striking the counterclaim or extending Plaintiff's time to interpose a reply. Neither party apparently having considered or briefed the question of this Court's jurisdiction over the counterclaim following dismissal of the Complaint, the Court addresses the jurisdictional issue sua sponte.
Rule 13(a) of the Federal Rules of Civil Procedure requires that "[a] pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against the opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction." Fed. R. Civ P. 13(a). A compulsory counterclaim, which--unless specifically excepted in the Rule--will be barred if not immediately pleaded, requires no independent basis of federal jurisdiction so long as a colorable federal issue is raised by the claim to which it is ancillary. Harris v. Steinem, 571 F.2d 119, 121-22 (2d Cir. 1978). Unrelated counterclaims, denominated permissive, need not be pleaded and may form the basis of a separate action; if raised in a federal district court, however, permissive counterclaims do require an independent jurisdictional basis. Id. at 122.
Defendant having asserted no independent jurisdictional basis to support the counterclaim in the instant case, that claim must, if permissive, be dismissed upon dismissal of the Complaint. Id. at 125. If compulsory, the counterclaim is not required to be dismissed, but may be dismissed in the exercise of the Court's discretion where, as here, "the district court has dismissed all claims over which it has original jurisdiction." 28 U.S.C. § 1367(c)(3) (Supp. 1991) (effective Dec. 1, 1990). See also Scott v. Long Island Savings Bank, FSB, 937 F.2d 738, 743 (2d Cir. 1991) (applying same reasoning to affirm dismissal of counterclaim in case filed before effective date of 28 U.S.C. § 1367). Taking the "broad view" of the relationship between claim and counterclaim that has generally been adopted in this Circuit, United States v. Aquavella, 615 F.2d 12, 22 (2d Cir. 1979), the Court suggests without concluding that Defendant's counterclaim for breach of the release agreement--being logically related to the claim of age discrimination upon which the instant action is founded--would appropriately be deemed compulsory within the meaning of Rule 13(a). This determination is unnecessary to the disposition of Defendant's motion for summary judgment on the counterclaim, however, since the Court concludes that even if not required to be dismissed the counterclaim in this case should not survive pretrial dismissal of the federal cause of action underlying the Complaint.
For all of the foregoing reasons, Defendant's motion addressed to the Complaint is granted, and the Complaint is dismissed as time-barred or, in the alternative, on grounds that Plaintiff knowingly and voluntarily released Defendant from liability arising out of the employment relationship. Defendant's motion for summary judgment on the counterclaim is denied, and the counterclaim is dismissed for lack of federal subject matter jurisdiction. Plaintiff's cross-motion, including the motions for costs, for leave to amend the Complaint, for enlargement of the time in which to complete discovery, and for an order compelling discovery from Defendant, are denied.
LAWRENCE M. McKENNA
Dated: New York, New York
July 1, 1992