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Wright v. Eastman Kodak Co.

August 22, 2006

KENNETH WRIGHT, PLAINTIFF,
v.
EASTMAN KODAK COMPANY, DEFENDANT.
GARY THOMPSON, PLAINTIFF,
v.
EASTMAN KODAK COMPANY, DEFENDANT.



The opinion of the court was delivered by: David G. Larimer United States District Judge

DECISION AND ORDER

Plaintiffs, Kenneth Wright and Gary Thompson, commenced these actions against their employer, Eastman Kodak Company ("Kodak"), alleging that Kodak has discriminated against them on account of their race in violation of 42 U.S.C. §§ 1981 and 2000e-5, and the New York State Human Rights Law, Exec. L. § 296.*fn1 Kodak has moved for partial summary judgment dismissing all of plaintiffs' claims that arose prior to certain dates, pursuant to releases that plaintiffs previously signed as part of a settlement of their claims against Kodak.*fn2

BACKGROUND

In 1999, following a series of discussions with the National Association for the Advancement of Colored People ("NAACP"), Kodak established an "Alternative Dispute Resolution Peer Review Process" for certain discrimination claims. Affidavit of Clara Michiko Ooyama (Dkt. #19) ¶ 6. Under this process, an employee complaining of discrimination can submit that complaint to the NAACP, which then passes it on to Kodak.

Kodak then assigns the claimant a "coach" (who is not a Kodak employee) to help the claimant prepare and submit the claim and supporting documentation to a panel of three or four Kodak employees ("ADR Panel"). Ooyama Aff. ¶ 9. The ADR Panel eventually makes findings and a recommendation to the "Corporate Sponsors," who are Kodak officers whose duty it is to decide whether to offer the claimant a settlement on behalf of Kodak, and if so in what amount. Ooyama Aff. ¶ 13. The claimant may meet with one of the Corporate Sponsors, and based on those discussions the Corporate Sponsors may decide to increase the offer. Ooyama Aff. ¶ 17. The claimant may decline the offer, but if he accepts, as part of the settlement he must sign a release in favor of Kodak. Ooyama Aff. ¶ 14.

Both Wright and Thompson have served on the ADR Panel, and they have also submitted their own claims to the panel. Plaintiffs, who are both African-American, alleged differential treatment in pay and position compared to white employees, disparate treatment with respect to various aspects of their jobs, and that they were subjected to a hostile work environment because of their race.

Through the ADR process, Wright and Thompson were eventually offered, and accepted, payments from Kodak of $21,388 and $10,000, respectively. Wright Dkt. #19-4 at 28; Thompson Dkt. #19-4 at 34. Wright also received a wage grade increase of $73 per week. Dkt. #19-4 at 28.

In return for these payments, each plaintiff "agree[d] to release Kodak from, and waive all claims or causes of action relating to [his] employment ... ." Each plaintiff also agreed not to sue Kodak "based upon facts which [he] raised or could have raised to support such claims," and that if plaintiff did bring such a lawsuit, he would "return all payments received pursuant to this agreement." The settlement agreements provided, however, that Wright and Thompson did not waive any claims that arose after their hearings before the ADR Panel, which occurred on October 26 and December 3, 1999 respectively. Wright Dkt. #19 at 28; Thompson Dkt. #19-4 at 34.

Plaintiffs commenced these actions in July 2004. They allege various types of race discrimination, particularly in the areas of pay and promotion. They also bring hostile-work-environment claims, and claims of unlawful retaliation.

DISCUSSION

In opposition to Kodak's motion, plaintiffs contend that the releases they signed are void and unenforceable because they were procured through fraud and duress. Specifically, plaintiffs contend that at the time they signed the settlement agreements containing the releases, they were unaware of the magnitude of their damages. They contend that the ADR Panel and the Corporate Sponsors assigned to their claims were privy to information that was not disclosed to plaintiffs, although it is not entirely clear what information they are referring to. Plaintiffs seem to suggest that when the Equal Employment Opportunity Commission ("EEOC") issued probable cause findings in both their cases in February 2004, this made plaintiffs aware that there had been systemic discrimination against black employees at Kodak, but it is not clear how this information would have affected plaintiffs' decisions concerning whether to settle their own individual claims.

Plaintiffs also contend that when they signed the releases, they were under "intense pressure" to sign the releases because they were aware of several other ADR panelists who had been removed from the ADR Panel and returned to their prior positions at Kodak after complaining about the ADR process. Plaintiffs assert that the fear of returning to their prior, racially hostile work environments "put an incredible amount of stress and pressure" on them to sign the releases. Wright Dkt. #24 ¶ 24; Thompson Dkt. #24 ¶ 25.

In assessing these arguments, and determining the validity and enforceability of the releases, the Court looks for guidance not only to Second Circuit precedent but to New York law. See VKK Corp. v. National Football League, 244 F.3d 114, 122 (2d Cir. 2001); Consolidated Edison, Inc. v. Northeast Utilities, 332 F.Supp.2d 639, 646 (S.D.N.Y. 2004). Under New York law, a "release is a type of contract governed by principles of contract law." Consolidated Edison, 332 F.Supp.2d at 122 (citing Golden Pac. Bancorp v. Fed. Deposit Ins. Corp., 273 F.3d 509, 514 (2d Cir. 2001); Zilinskas v. Westinghouse Elec. Corp., 248 A.D.2d 777, 778 (3d Dep't 1998)).

In addition, "it is well settled that stipulations of settlement are favored by the courts, and are not to be lightly cast aside." Brock v. Brock, 256 A.D.2d 375, 376 (2d Dep't 1998) (citing Hallock v. State of New York, 64 N.Y.2d 224, 230 (1984)). The burden of proof is therefore on the party seeking to avoid the release. Hayes v. Lipinski, 239 A.D.2d 835, 835 (3d ...


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