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Parties Involved:
Public Service Company of New Mexico
Appellee
David Torrez
Appellant

Document Text:

PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

DAVID TORREZ, 

Plaintiff-Appellant, 

FILED 

United States Court of Appeals 

Tenth circuit 

JUL 2 0 1990 

ROBERT L. HOECKER 

Clerk 

v. 

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No. 89-2103 

PUBLIC SERVICE COMPANY OF 

NEW MEXICO, INC., 

Defendant-Appellee. 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF NEW MEXICO 

(D.C. No. 88-165 SC) 

Submitted on the briefs: 

Earl Mettler of Mettler & LeCuyer, P.C., Albuquerque, New Mexico, 

for Plaintiff-Appellant. 

Robert C. Conklin and Margaret E. Davidson of Keleher & McLeod, 

P.A., Albuquerque, New Mexico for Defendant-Appellee. 

Before LOGAN, JONES,* and SEYMOUR, Circuit Judges. 

*Honorable Nathaniel R. Jones, Circuit Judge, United States Court 

of Appeals for the Sixth Circuit, sitting by designation. 

PER CURIAM. 

Appellate Case: 89-2103 Document: 01019566070 Date Filed: 07/20/1990 Page: 1 
Plaintiff David Torrez appeals from an order of the district 

court granting summary judgment for defendant Public Service 

Company of New Mexico (PNM) and holding that Torrez's signing of a 

release at the time of his employment termination constituted a 

knowing and voluntary waiver of his right to bring an employment 

discrimination action pursuant to 42 u.s.c. §§ 1981, 2000c-5 

(1982). Torrez challenges the district court's consideration of 

only the language of the release, and not the totality of the 

circumstances and conditions under which the release was signed. 

we agree that the district court should have considered the 

totality of the circumstances, and conclude that it erred in 

granting summary judgment for PNM. 1 

The following facts are undisputed. Torrez was employed by 

PNM for eight years and eleven months as a journeyman mechanic, 

working foreman, and finally a foreman in the maintenance 

department of t he power plant. PNM notified Torrez on March 31, 

1986, that his position was being impacted as part of a downsizing 

of the company's work force due to economic problems. The 

notification letter also informed Torrez he had until April 30, 

1986, to select early retirement, voluntary separation, or 

involuntary separation. PNM later held an orientation for all 

affected employees to discuss the separation packages, and Torrez 

attended. 

1 After e xamining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); lOth Cir. R. 34.1.9. The case is therefore ordered 

submitted without oral argument. 

2 

Appellate Case: 89-2103 Document: 01019566070 Date Filed: 07/20/1990 Page: 2 
Because Torrez had been employed by PNM for less than nine 

and one-half years, he did not qualify for early retirement. His 

election. therefore was limited to either voluntary or involuntary 

separation. Both of these packages provided for full salary until 

July 31, 1986, plus one week of salary for each year of service, 

career counseling, and health, life, and dental insurance coverage 

until November 30, 1986. The primary difference between the two 

packages was that the voluntary package also provided for vesting 

of retirement benefits for an employee having five years of 

service with defendant. 

After requesting and receiving an estimate of his retirement 

benefits under a voluntary separation, on the last possible day 

Torrez chose the voluntary separation package to obtain the 

additional retirement benefits. At that time, he signed a release 

which provided: 

I, David F. Torrez, hereby release and discharge 

PNM, its officers, supervisors, agents, employees and 

all other persons or entities, for any and all claims 

which I have or might have, arising out of or related to 

my employment or resignation or termination from 

employment by or from PNM. I also acknowledge full 

settlement and satisfaction of such claims and I further 

understand that the consideration given by PNM is not to 

be construed as any admission of l i ability by PNM or its 

officers, supervisors, agents, employees or any other 

persons or entities being released. 

The terms of this release are contractual and all 

terms of this release are expressed in this document. I 

have read this release and fully understand it. 

Subsequently, Torrez commenced this racial/national origin 

employment discrimination lawsuit. PNM moved for summary 

judgme nt, asserting that Torrez had knowingly and voluntarily 

waived his right to bring the action by signing the release at the 

3 

Appellate Case: 89-2103 Document: 01019566070 Date Filed: 07/20/1990 Page: 3 
time of his employment termination. In granting summary judgment 

for PNM, the district court focused its analysis on the language 

of the release. The court held that the clear and unambiguous 

language of the release was evidence of Torrez's intent to waive 

the discrimination claims. Refusing to consider Torrez's 

subjective intent, the court stated that "[a] subjective intention 

not to waive civil rights claims is not sufficient to preserve 

those claims in the face of unambiguous language in a release 

agreement." District Court Opinion at 8. Finally, the court 

noted that Torrez failed to provide any evidence that PNM did not 

intend the release to apply to the full extent suggested by its 

wording. 

On appeal, Torrez argues he did not knowingly and voluntarily 

waive his right to bring this action by signing the release. 

Torrez contends that his intent and understanding must be assessed 

at trial and should not have been decided by summary judgment. 

Additionally, he asserts that the totality of the circumstances 

supports a finding that there was no knowing and voluntary waiver. 

We review a summary judgment order de TIQYQ, and apply the same 

legal standard used by the district court under Rule 56(c) of the 

Federal Rules of Civil Procedure. See Osgood v. State Farm Mut. 

Auto. Ins. Cq., 848 F.2d 141, 143 (lOth Cir. 1988). Summary 

judgment should be granted only if "there is no genuine issue as 

to any material fact and . the moving party is entitled to 

judgment as a matter of law. " Fed. R. Civ. P. 56(c). In applying 

this standard, we shall examine "the factual r ecord and r easonable 

inferences therefrom in the light most favorable to the party 

4 

Appellate Case: 89-2103 Document: 01019566070 Date Filed: 07/20/1990 Page: 4 
opposing summary judgment." Abercrombie v. City of Catoosa, 896 

F.2d 1228, 1230 (lOth Cir. 1990). 

Both Title VII and section 1981 employment discrimination 

claims may be waived by agreement, see Freeman v. Motor Convoy, 

Inc., 700 F.2d 1339, 1352-53 (11th Cir. 1983), but the waiver of 

such claims must be knowing and voluntary, see Alexander v. 

Gardner-Denver Co., 415 U.S. 36, 52 n.l5 (1974); Trujillo v. 

Colorado, 649 F.2d 823, 827 (lOth Cir. 1981); see also Shaheen v. 

B.F. Goodrich Co., 873 F.2d 105, 107 (6th Cir. 1989) (waivers 

knowingly and voluntarily made enforced absent typical exceptions 

for fraud, duress, lack of consideration, or mutual mistake). 

Waivers of federal remedial rights, however, are not lightly to be 

inferred. Watkins v. Scott Paper Co., 530 F.2d 1159, 1172 (5th 

Cir.), cert. denied, 429 u.s. 861 (1976). 

In considering whether a general release was knowing and 

voluntary, some circuits purport to apply ordinary contract 

principles and focus primarily on the clarity of language in the 

release. See Pilon v. University of Minn., 710 F.2d 466 (8th Cir. 

1983); Runyan v. National Cash Register Corp., 787 F.2d 1039, 1044 

n.lO (6th Cir.) (en bane) (waiver of ADEA rights), cert. denied, 

2 479 u.s. 850 (1986). The majority of circuits, however, 

2 While the courts in both Pilon and Runyan stated that they 

were only applying general contract principles to determine the 

sufficiency of the waivers, a reading of those courts' opinions in 

their "entirety reflects the fact that the court[s] considered 

other factors." Conventry v. u.s. Steel Corp., 856 F.2d 514, 522 

n.9 (3rd Cir. 1988). Although the court in Pilon primarily 

considered the contract language, for example, it emphasized that 

the plaintiff had been represented by counsel and had not used a 

standard form agreement, but had negotiated the specific language 

utilized in the release. 710 F.2d at 468. Similarly, the Runyan 

court observed that the plaintiff there was not a low-paid worker 

5 

Appellate Case: 89-2103 Document: 01019566070 Date Filed: 07/20/1990 Page: 5 
explicitly look beyond the contract language and consider all 

relevant factors in assessing a plaintiff's knowledge and the 

voluntariness of the waiver. See Stroman v. West Coast Grocery 

Co., 884 F.2d 458, 462 (9th Cir. 1989); Riley v. American Family 

Mut. Ins. Co., 881 F.2d 368, 373-74 (7th Cir. 1989); Bormann v. 

AT & T Communications, Inc., 875 F.2d 399, 403 (2d Cir.) (waiver 

of ADEA rights), cert. denied, 110 S. Ct. 292 (1989); Cirillo v. 

Area Chern. Co., 862 F.2d 448, 451 (3d Cir. 1988) (waiver of ADEA 

rights); Coventry v. United States Steel Corp., 856 F.2d 514, 522-

23 (3d Cir. 1988) (waiver of ADEA rights); Rogers v. General Elec. 

Co., 781 F.2d 452, 456 (5th Cir. 1986). In so doing, these courts 

have considered the following circumstances and conditions under 

which the release was signed: 

"(1) the clarity and specificity of the release 

language; (2) the plaintiff's education and business 

experience; (3) the amount of time plaintiff had for 

deliberation about the release before signing it; (4) 

whether [p]laintiff knew or should have known his rights 

upon execution of the release; (5) whether plaintiff was 

encouraged to seek, or in fact received benefit of 

counsel; (6) whether there was an opportunity for 

negotiation of the terms of the Agreement; and (7) 

whether the consideration given in exchange for the 

waiver and accepted by the employee exceeds the benefits 

to which the employee was already entitled by contract 

or law." 

Cirillo, 862 F.2d at 451. 

In our view, the totality of the circumstances approach is 

the better one. While evaluation of the language of the contract 

is necessary to determine the validity of the waiver of 

discrimination claims, our inquiry cannot end there. Especially 

with "little education and little understanding of [his] legal 

rights. . . . Rather, [the plaintiff was] a well-paid, 

well-educated labor lawyer." 787 F.2d at 1044. 

6 

Appellate Case: 89-2103 Document: 01019566070 Date Filed: 07/20/1990 Page: 6 
"[i]n light of the strong policy concerns to eradicate 

discrimination in employment, a review of the totality of the 

circumstances, considerate of the particular individual who has 

executed the release, is also necessary." Coventry, 856 F.2d at 

522-23; see also Watkins, 530 F.2d at 1172 ("[t]o assume that, 

notwithstanding strong evidence to the contrary, a signature 

implies understanding is to allow a rule of contract law to play 

too salient a part in the administration of a remedial civil 

rights statute"). 

In assessing the totality of the circumstances in this case, 

we conclude there are material issues of fact precluding summary 

judgment. The language of the release, although clear and 

unambiguous, failed to mention specifically waiver of employment 

discrimination claims. See Cirillo, 862 F.2d at 450 (employee 

advised of equal employment laws, encouraged to consult employee 

relations representative, and release specified employment 

discrimination claims); Rogers, 781 F.2d at 453-54 (release 

specifically mentioned Title VII). As we have stated above, 

unambiguous language cannot derail our analysis of whether the 

waiver was made knowingly and voluntarily. Here, Torrez has 

stated that it did not occur to him when he signed the release 

that he might be waiving possible discrimination claims. He 

testified he believed he was releasing claims arising out of the 

voluntary termination and the benefits package he was accepting. 

This is not an unreasonable conclusion for a high school educated 

employee, unfamiliar with the law. 

7 

Appellate Case: 89-2103 Document: 01019566070 Date Filed: 07/20/1990 Page: 7 
Moreover, Torrez neither consulted with an attorney nor 

received encouragement from defendant to do so before he signed 

the release. See Cirillo, 862 F.2d at 450 (employer suggested 

employee should consult attorney regarding release); Coventry, 856 

F.2d at 525 & n.13 (lack of advice of attorney relevant); Rogers, 

781 F.2d at 456 (employee advised by employer to consult 

attorney). Torrez did not have the opportunity to negotiate the 

terms of the release, which was a standard form. When Torrez 

chose the voluntary separation package, he was required to sign 

the release. The choice between the two separation packages was a 

"Hobson's choice," see Coventry, 856 F.2d at 524, because Torrez 

had to opt between a nearly-certain layoff with no retirement 

benefits or obtaining the future retirement benefits available 

only if he signed the release. He testified at his deposition 

that he signed the release in order to save his retirement 

b f . h h h f 1 h h db . 1 . d 3 

ene 1ts, even t aug e e t e a een unJust y term1nate . 

In sum, Torrez was in the unenviable position of having to 

sign the release or lose his retirement benefits. He had a high 

school education, the release did not specifically mention release 

of employment discrimination claims, and Torrez did not consult 

with an attorney nor have an opportunity to negotiate the terms of 

the release. He testified he viewed the release as releasing only 

those claims arising out of the termination plan. Under the 

totality of the circumstances, the evidence before the district 

3 This choice indicates there may have been duress in the form 

of unfair economic pressure placed on plaintiff to sign the 

release. See Coventry, 856 F.2d at 524 n.12. 

8 

Appellate Case: 89-2103 Document: 01019566070 Date Filed: 07/20/1990 Page: 8 
court presented a material question of fact as to whether Torrez 

knowingly and voluntarily signed the release. 

The judgment of the United States District Court for the 

District of New Mexico is VACATED, and the action is REMANDED for 

further proceedings in accordance with this opinion. 

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