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United States District Court, S.D. New York

February 19, 2004.


The opinion of the court was delivered by: GABRIEL GORENSTEIN, Magistrate Judge


Plaintiff Elizabeth T. Farrell, proceeding pro se, has brought this action pursuant to the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. § 621-634, alleging that her former employer, defendant Title Associates, Inc., discriminated against her on the basis of her age when it terminated her employment in September 2002. Title Associates has moved to dismiss the complaint for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6) on the ground that in December 2002 Farrell entered into an agreement releasing any age discrimination claims. The parties have consented to exercise of jurisdiction over this matter by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). For the following reasons, the motion is converted into one for summary judgment and granted.


  A. The Complaint

  The complaint alleges as follows: Farrell was employed by Title Associates from September 1995 until September 2002. See Schedule A ("Schedule A") (annexed to Complaint, submitted to Pro Se Office on May 30, Page 2 2003, and filed on June 24, 2003 (Docket #2) ("Complaint")), at 1-2. During her seven years of employment, Farrell was responsible for setting up and managing the Production Department. Id. at 1. On September 26, 2002, Jeffrey Gurren, the Chief Executive Officer of Title Associates, fired Farrell. Id. at 1-2. When he did so, Gurren screamed at Farrell and demeaned her in front of her colleagues. Id. at 2. At the time, Farrell was 45 years old and her termination was motivated by her age. Id.; Complaint ¶ 7. By firing Farrell without first speaking to her privately about complaints made by fellow employees, Title Associates treated Farrell differently from younger employees, who were routinely spoken to privately about complaints. Schedule A at 1-2. The two employees who replaced Farrell were 23 and 27 years old. Id.

  B. The Release

  On December 16, 2002, Farrell signed a release of claims in exchange for a monetary payment. The release provided as follows:

In exchange for Title Associate's [sic] payment, except for a claim for unemployment insurance benefits, you RELEASE Title Associates, its parents, subsidiaries, affiliates, officers, directors, employees and agents from ANY AND ALL CLAIMS you may have, known or unknown, RELATED TO YOUR EMPLOYMENT, YOUR SEPARATION FROM EMPLOYMENT OR OTHERWISE, from the beginning of time through the date you sign this Agreement.
You understand and agree that you are RELEASING Title Associates . . . from . . . any and all claims for discrimination . . . on the basis of . . . age.
See Letter from Jeffrey Gurren to Elizabeth Farrell, dated December 5, 2002 ("Release") (annexed as Ex. 1 to Affirmation of Andrew P. Marks, dated August 4, 2003 ("Marks Affirm.") (annexed as Ex. A to Memorandum of Law in Support of Defendant's Motion to Dismiss, filed August 7, 2003 (Docket #5) ("Def. Mem."))), ¶ 5. The Release provided that Title Associates Page 3 would pay Farrell a lump sum payment of $2115.38 minus taxes and other withholding amounts, as required by law. Id. ¶ 2.

  Farrell concedes that she executed the Release but says that she did so only "because [she] thought that if [she] did not execute the Release [her] Employer would challenge [her] unemployment compensation." Affirmation of Elizabeth T. Farrell, filed August 21, 2003 (Docket #7) ("Farrell Affirm."), ¶ 2(B). She states she was offered two weeks' severance pay at the time of her termination but her attorney told her that she would receive the severance check only if she signed a waiver of her rights to sue. Id. As she was "about to be evicted" and "needed money for groceries," she signed the waiver. Id.


  Title Associates has moved to dismiss the complaint under Fed.R. Civ. P. 12(b)(6). See Notice of Motion, filed August 7, 2003 (Docket #4). The sole basis for this motion is the Release signed by Farrell. See Def. Mem. at 1-2. Because Title Associates has presented documents outside of the complaint in support of its motion, the Court must first decide whether to treat the motion as one for summary judgment under Fed.R.Civ.P. 56(c).

  Fed.R.Civ.P. 12(b) provides that "[i]f . . . matters outside the pleading are presented to and not excluded by the court, [a] motion [to dismiss under 12(b)(6)] shall be treated as one for summary judgment." See also Cosmas v. Hassett, 886 F.2d 8, 13 (2d Cir. 1989) ("On a motion to dismiss, the district court must limit itself to a consideration of the facts alleged on the face of the complaint and to any documents attached as exhibits or incorporated by reference." (citations omitted)). A complaint is deemed to include "documents that the plaintiffs either possessed or knew about and upon which they relied in bringing the suit." Rothman v. Gregor, 220 F.3d 81, Page 4 88 (2d Cir. 2000) (citing Cortec Indus., Inc. v. Sum Holding, L.P., 949 F.2d 42, 47-48 (2d Cir. 1991)).

  Because Farrell is proceeding pro se, affording her notice and an opportunity to respond is a particular concern. See, e.g., Beacon Enters., Inc. v. Menzies, 715 F.2d 757, 767 (2d Cir. 1983); see also Fed.R.Civ.P. 12(b) ("[A]ll parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56."). "The essential inquiry is whether the [plaintiff] should reasonably have recognized the possibility that the motion might be converted into one for summary judgment or was taken by surprise and deprived of a reasonable opportunity to meet facts outside the pleadings." In re G. & A. Books, Inc., 770 F.2d 288, 295 (2d Cir. 1985), cert. denied, 475 U.S. 1015 (1986).

  Here, Title Associates' motion papers have put Farrell on notice that it is seeking to dismiss the complaint exclusively on the basis of the effect of the Release. See Def. Mem. at 6-10. In addition, Farrell understands that this is the basis for Title Associates' motion inasmuch as she filed two separate affidavits — one after Title Associates' initial motion papers were filed and the other after its reply brief was filed — addressing the issue of the Release. See Farrell Affirm.; Reply Memorandum in Further Support to Dismiss Defendant's Motion to Dismiss, filed October 22, 2003 (Docket #9) ("Reply Mem."). These affidavits offer the specific facts that Farrell relies upon in support of her argument that the Release was invalid. Farrell Affirm. ¶¶ 2(A)-(B); Reply Mem. ¶ 2. Thus, Farrell has had a full opportunity to address any factual issues raised in Title Associates' papers and converting the motion to one for summary judgment is appropriate. Page 5

  Summary judgment may not be granted unless "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). A material issue is a "dispute[] over facts that might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. Thus, "`[a] reasonably disputed, legally essential issue is both genuine and material'" and precludes a finding of summary judgment. McPherson v. Coombe, 174 F.3d 276, 280 (2d Cir. 1999) (quoting Graham v. Henderson, 89 F.3d 75, 79 (2d Cir. 1996)).


  The first issue that must be determined is the validity of the Release under 29 U.S.C. § 626(f), which governs the waiver of rights and claims under the ADEA. Next, we discuss whether the terms of the Release in fact permit Farrell to pursue a claim under the ADEA against Title Associates.

  A. Validity of the Release

  Congress enacted the Older Workers Benefit Protection Act of 1990 ("OWBPA"), 29 U.S.C. § 626(f), as an amendment to the ADEA. See EEOC v. Johnson & Higgins, 5 F. Supp.2d 181, 183 (S.D.N.Y. 1998). Under the OWBPA, an individual cannot waive any right or claim under the ADEA "unless the waiver is knowing and voluntary." 29 U.S.C. § 626(f)(1). To be considered "knowing and voluntary," the statute requires in pertinent part that a waiver satisfy the following requirements: Page 6


(A) the waiver is part of an agreement between the individual and the employer that is written in a manner calculated to be understood by such individual, or by the average individual eligible to participate;
(B) the waiver specifically refers to rights or claims arising under this chapter;
(C) the individual does not waive rights or claims that may arise after the date the waiver is executed;
(D) the individual waives rights or claims only in exchange for consideration in addition to anything of value to which the individual is already entitled;
(E) the individual is advised in writing to consult with an attorney prior to executing the agreement;
(F) . . . the individual is given a period of at least 21 days within which to consider the agreement;. . .[and]
(G) the agreement provides that for a period of at least 7 days following the execution of such agreement, the individual may revoke the agreement, and the agreement shall not become effective or enforceable until the revocation period has expired. . . .

  The Release signed by Farrell in this case satisfies all of these requirements. First, the document is written in an understandable manner, employing a minimum of legal terminology. In addition, Farrell acknowledged through her signature on the Release that, according to the language of the agreement, she had "carefully read and fully understood" all of the provisions," the Release was "written in plain language suitable for [her] to understand," and she was not "otherwise unable to read, consider, and understand the terms of this Agreement." Release ¶¶ 10(b), (f), (i).

  Second, the Release specifically states that Farrell is "waiving, releasing, and discharging Title Associates through this Agreement, from any and all claims [she] may have against it, Page 7 including any claims under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621 et seq.)." Id. ¶ 10(d).

  Third, the general release of claims is applicable only to claims. "through the date . . . this Agreement [is signed]." Id. ¶ 5; accord id. ¶ 10(j) ("This Agreement does not waive any rights or claims that may arise after this Agreement is signed and becomes effective.").

  Fourth, Farrell executed the Release in exchange for consideration, specifically a lump sum payment of $2115.38 minus taxes and other withholding amounts, as required by law. Id. ¶ 2. She expressly acknowledged "that ABSENT THIS AGREEMENT, [she] would not otherwise be entitled to the money specified" and "that [she is] not entitled to any payments and/or benefits that are not specifically listed in this Agreement." Id. ¶ 4.

  Fifth, the Release states: "You have been advised to consult with an attorney of your choosing prior to executing this Agreement and have consulted with Jonathan Scott Sack, Sack & Sack, 135 East 57th Street, New York, New York, who has answered any questions you may have." Id. ¶ 10(c). In addition, Title Associates has provided copies of correspondence between Sack and Title Associates indicating that Farrell retained Sack less than two weeks after her termination and more than two months before she actually signed the Release. See Letter from Jonathan Scott Sack to Jeffrey G. Gurren, dated October 7, 2002 ("Oct. Sack Letter") (reproduced as Ex. 2 to Marks Affirm.). Sack represented Farrell throughout the period when the terms of the Release were being negotiated and through her decision to sign the final agreement on December 16, 2002. See Letter from Jonathan Sack to Andrew P. Marks, dated December 20, 2002 ("Dec. Sack Letter") (reproduced as Ex. 4 to Marks Affirm.). Page 8

  Sixth, Farrell was given "a full 21 days to consider this Agreement before executing it." Release ¶ 10(a).

  Finally, Farrell was given seven days to revoke the Agreement following its execution and it did "not become effective or enforceable until the revocation period . . . expired without revocation." Id. ¶ 10(h).

  In sum, the Release signed by Farrell complies with the provisions of the OWBPA. See 29 U.S.C. § 626(f)(1)(A)-(G).

  This does not end the inquiry, however, because these statutory requirements are only the "minimum" conditions which must be met for the waiver to be "knowing and voluntary." Id. § 626(f)(1). Courts have considered additional factors in making this inquiry, applying a "totality of the circumstances" approach in analyzing the waiver of an ADEA claim. Johnson & Higgins, 5 F. Supp.2d at 183; accord Wastak v. Lehigh Valley Health Network, 342 F.3d 281, 294 n.8 (3d Cir. 2003); Bennett v. Coors Brewing Co., 189 F.3d 1221, 1229 (10th Cir. 1999); Griffin v. Kraft Gen. Foods, Inc., 62 F.3d 368, 373-74 (11th Cir. 1995). An inquiry into the "totality of the circumstances" includes an examination of the plaintiffs education and experience, the amount of time plaintiff had to consider the agreement before signing it, the role plaintiff played in deciding the terms of the agreement, whether plaintiff consulted with an attorney, and whether the consideration given in exchange for the waiver exceeds employee benefits to which the employee was already entitled. Johnson & Higgins, 5 F. Supp.2d at 183 (citing Bormann v. AT&T Communications, Inc., 875 F.2d 399, 403 (2d Cir. 1989)).

  Turning to these factors, Farrell describes her performance at Title Associates as "above average" and her organizational and managerial skills as "exceptional." Schedule A at 1. She Page 9 details the responsibility she was able to take on in setting up and managing the Production Department and in training subordinate employees. Id. Farrell's submissions on this motion in no way suggest that she lacked the education and experience necessary to understand the Release.

  As for the amount of time Farrell had the Release in her possession before signing it, the Release is dated December 5, 2000 and her signature is dated December 16, 2000. See Release. Therefore, she was able to consider the document for approximately 11 days and was afforded an additional 10 days had she found additional time necessary, see id. ¶ 10(a).

  Although there is no evidence as to what role Farrell had in negotiating the terms of the Release, she was represented by Sack for the two-and-a-half month period prior to her signing the Release. Sack was in contact with Title Associates and its attorneys during this time period. See Oct. Sack Letter; Dec. Sack Letter.

  Finally, Farrell has provided no evidence that the $2115.38 payment given in exchange for the waiver is something that she was legally entitled to upon her termination. In her papers, she appears to claim that when she was terminated she was "offered" two weeks' severance pay, which she then had to request through her attorney. See Farrell Affirm, ¶ 2(B); Reply Mem. ¶ 2. But she does not suggest that this was an enforceable promise — as opposed to a gratuitous offer from Title Associates that was ultimately conditioned upon her executing the Release. In addition, the language of the Release, which Farrell acknowledged and agreed to, states "that ABSENT THIS AGREEMENT, [Farrell] would not otherwise be entitled to the money specified" and "that [she is] not entitled to any payments and/or benefits that are not specifically listed in this Agreement." Release ¶ 4. Page 10

  Farrell's only real argument to avoid the terms of the Release is her contention that she "executed the Release because [she] thought that if [she] did not execute the Release [her] Employer would challenge [her] un-employment compensation." Farrell Affirm. ¶ 2(B). Also, her attorney told her she would receive the two weeks' severance pay only if she signed a waiver. Id. Because she was "about to be evicted" and "needed money for groceries," she signed the Release. Id. In short, Farrell appears to seek to avoid the effect of the Release by asserting it was signed under duress.

  A contract, such as a release, is voidable if it is a product of duress. VKK Corp. v. NFL, 244 F.3d 114, 122 (2d Cir. 2001). "The elements of a claim of economic duress under New York law are: `(1) a threat, (2) which was unlawfully made, and (3) caused involuntary acceptance of contract terms, (4) because the circumstances provided no other alternative.'" Bachiller v. Turn On Prods., Inc., 2003 WL 1878416, at *4 (S.D.N.Y. Apr. 14, 2003) (quoting Kamerman v. Steinberg, 891 F.2d 424, 431 (2d Cir. 1989)), aff'd, 2004 WL 206321 (2d Cir. Feb. 3, 2004). Under ordinary contract principles, if a person claiming duress does not act promptly to repudiate the contract or intentionally accepts benefits under the contract, she will be deemed to have ratified it. VKK Corp., 244 F.3d at 122-23.

  Farrell has provided no evidence of any unlawful threat made by Title Associates. Indeed, she states only that she "Vas extremely concerned" because she "thought" that Title Associates would challenge her unemployment benefits. Reply Mem. ¶ 2; Farrell Affirm, ¶ 2(B). The only basis she provides for so believing is that she had to ask her attorney to request the two weeks' severance pay which she was offered at the time of her termination. Reply Mem. ¶ 2. Page 11 None of the conduct alleged by Farrell shows a threat by Title Associates, let alone one that was unlawfully made.

  Even if Title Associates had made an improper threat, Farrell has also failed to demonstrate that she lacked a practical alternative to signing the Release. See Bachiller, 2003 WL 1878416, at *4 (duress claim without merit where plaintiff did not show lack of a practical alternative). While the Court is sympathetic to Farrell's need to buy groceries and pay rent, that need is legally inadequate to state a claim of duress. See, e.g., Kenneth D. Laub & Co. v. Domansky, 172 A.D.2d 289, 289 (1st Dep't 1991) ("That plaintiff knew defendant was in financial straits when demanding commission amounts to no more than mere hard bargaining tactics." (citation omitted)); see also Weinraub v. Int'l Banknote Co., 422 F. Supp. 856, 859 (S.D.N.Y. 1976) ("Mere hard bargaining positions, if lawful, and the press of financial circumstances, not caused by the defendant, will not be deemed duress.").

  Moreover, Farrell's allegations provide no explanation for her failure to revoke the Release. See Bachiller, 2003 WL 1878416, at *4 ("[E]ven if plaintiff signed the agreement because she was in a `despondent state,' that doesn't explain why she failed to timely revoke it."). While Farrell accepted the benefits of the Release, see Check Payable to Elizabeth Farrell, dated December 31, 2002 (reproduced as Ex. 5 to Marks Affirm.), she apparently made no effort to revoke the Release until this suit was filed in May 2003.

  Given these circumstances, Farrell's claim that she signed the Release under duress is without merit and Farrell's waiver of her right to sue under the ADEA was "knowing and voluntary." Page 12

  B. Effect of the Release

  Paragraph 5 of the Release states that "[i]n exchange for Title Associate's [sic] payment . . .[Farrell] RELEASE[S] Title Associates . . . from ANY AND ALL CLAIMS . . . RELATED TO [HER] EMPLOYMENT, [HER] SEPARATION FROM EMPLOYMENT OR OTHERWISE." Release ¶ 5. Farrell specifically acknowledged that by signing the Release she was waiving any and all claims she had against Title Associates under the ADEA. Id. ¶ 10(d).

  The OWBPA provides:

No waiver agreement may affect the [Equal Employment Opportunity] Commission's rights and responsibilities to enforce [the provisions of the ADEA]. No waiver may be used to justify interfering with the protected right of an employee to file a charge or participate in an investigation or proceeding conducted by the Commission.
29 U.S.C. § 626(f)(4). Consistent with this provision, paragraph 10(k) of the Release provides:
You understand that you may challenge the knowing and voluntary nature of this release under the Older Worker[s] Benefit Protection Act (OWBPA) and the ADEA before a court, the Equal Employment Opportunity Commission (EEOC), or any state or local agency charged with the enforcement of any discrimination laws, despite the release language stated above. You also understand that nothing in this release prevents you from filing a charge or complaint of age discrimination with or from participating in an investigation or proceeding conducted by any agency charged with the enforcement of any discrimination laws. You understand, however, that if you pursue a claim against [Title Associates] under the OWBPA and/or the ADEA, [Title Associates] may seek to set off the amount paid to Employee for signing this release against any award she may obtain in such legal proceeding.
Release ¶ 10(k). Pointing to this paragraph, Farrell argues that the Release reserves her right to pursue her claims of discrimination in federal court. Farrell Affirm, ¶ 2(A); Reply Mem. ¶ 1. Page 13

  The Court rejects this argument. Paragraphs 5 and 10(d) of the Release plainly state that Farrell was giving up "all" claims under the ADEA. While paragraph 10(k) permitted Farrell to file an age discrimination claim administratively — which she did by filing a charge with the EEQC, see Complaint ¶ 10 — the only court action paragraph 10(k) permitted was the bringing of a challenge to the "knowing and voluntary nature of this release." Farrell's right to bring a suit in court on her underlying claim of age discrimination against Title Associates was clearly waived in the Release. See Release ¶¶ 5, 10(d). The fact that the EEOC issued Farrell a "right to sue" letter, see Notice of Right to Sue, dated May 14, 2003 (annexed to Complaint), is of no consequence because this letter could not enlarge the terms of the Release. In any event, the "right to sue" letter is consistent with Farrell's legal right to challenge in court whether the waiver was "knowing and voluntary."


  Because all the evidence presented to this Court reflects that Farrell knowingly and voluntarily waived any and all claims against Title Associates under the ADEA, there is "no genuine issue as to any material fact" and Title Associates is entitled to summary judgment under Fed.R.Civ.P. 56(c). The Clerk is requested to enter judgment and to close this case. Page 1


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