Source: http://ca10.washburnlaw.edu/cases/1999/08/97-1195.htm
Timestamp: 2020-02-16 18:57:25
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Matched Legal Cases: ['§ 626', '§ 626', '§ 626', '§ 175', '§ 203', '§ 24', '§ 633', '§ 626', '§ 216', '§ 216', '§ 626']

97-1195 -- Bennett v. Coors Brewing Co. -- 08/27/1999
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WARDER W. BENNETT, CHARLES BLALOCK, LEONARD L. GARRETT, ROBERT HANNAH, ERNEST HOWARD, JOHN MCMINIMEE, and JULIA A. SIMPSON,
COORS BREWING COMPANY, a Colorado corporation,
Nos. 97-1195 and 97-1221
(D.C. No. CIV-95-Z-2574)
A. APPELLANTS' ADEA CLAIMS
1. Knowing and Voluntary Release Execution
Section 201 of the OWBPA prohibits the waiver of ADEA claims if the waiver is not "knowing and voluntary." 29 U.S.C. § 626(f)(1). The statute provides that an ADEA waiver is not knowing and voluntary unless, "at a minimum," it complies with the requirements set out in the statute. Id. The statutory requirements are summarized as follows:
See 29 U.S.C. § 626(f)(1)(A)-(H).
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 "[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."
The OWBPA plainly states that the listed statutory requirements are a minimum for determining whether a waiver is knowing and voluntary. 29 U.S.C. § 626(f)(1) ("a waiver may not be considered knowing and voluntary unless at a minimum . . . " it complies with the listed statutory requirements.). In addition, the legislative history explicitly approves of the logical and plain meaning interpretation that the statutory requirements are not exclusive.
To establish a prima facie case of fraud under Colorado law, a plaintiff must present evidence of the following:
(1) "the defendant made a false representation of a material fact;"
Wiesen, 604 P.2d at 1192 (emphasis added) (quotations omitted). See also Anselmo v. Manufacturers Life Ins. Co., 771 F.2d 417, 420 (8th Cir. 1985) (holding that the fact that an employee faces a tough decision of either "accepting . . . termination perks or pursuing his legal rights under [an] employment agreement . . . does not mean that [the employee] lacked the requisite free will to make the decision."); Vail/Arrowhead, Inc. v. District Court for the Fifth Judicial Dist., Eagle County, 954 P.2d 608, 612 (Colo. 1998) ("A contract is voidable on the grounds of duress if a party's manifestation of assent is induced by an improper threat that leaves no reasonable alternative.") (emphasis added) (citing Restatement (Second) of Contracts § 175 (1981)). However, "[t]hreats to do what one may lawfully do [are] not duress." Heald v. Crump, 215 P. 140, 141 (Colo. 1923).
2. Scope of the Releases
Under Colorado law, "interpretation of the language of a contract is a question of law to be resolved by the court." Denver Ctr. for the Performing Arts v. Briggs, 696 P.2d 299, 306 (Colo. 1985). "[W]hether . . . a contract is ambiguous is also a question of law for the court." Id. However, "[t]he fact that the parties disagree as to the meaning of the terms of the contract does not lead necessarily to the conclusion that the contract is ambiguous." Id. "In ascertaining whether certain provisions of a document are ambiguous, the instrument's language must be examined and construed in harmony with the plain and generally accepted meaning of the words employed, and reference must be made to all the provisions of the agreement." Radiology Prof'l Corp. v. Trinidad Area Health Assoc., 577 P.2d 748, 750 (Colo. 1978). "The plain effect of a contract should not be destroyed by strained construction." Briggs, 696 P.2d at 306.
We agree with the district court that the plain meaning of the releases is to release any claims in any way relating to appellants' employment with Coors, which includes appellants' ADEA claims. "[I]t is a cardinal rule that an agreement . . . must be construed as a whole and effect given, if possible, to its every provision." Brown v. Brown, 419 P.2d 444, 445 (Colo. 1966). "[S]pecific terms and exact terms [in this case, the specifically listed ADEA claims] are given greater weight than general language." Restatement (Second) Contracts § 203(c) (1981). The releases specifically address any claims for discrimination based on age under the ADEA. Appellants' literal, out-of-context interpretation of a single, general sentence would destroy the plain meaning of the agreements and would, in effect, remove the specifically listed ADEA claims from the releases. The releases, when interpreted as a whole, have only one reasonable meaning ­ to bar all claims in any way relating to appellants' employment and discharge from Coors, specifically including appellants' ADEA claims. Therefore, we affirm the conclusion of the district court and hold that appellants' ADEA claims are barred by the unambiguous terms of the releases.
3. Tender Back
The district court held in the alternative that, even if the releases were not knowing and voluntary, appellants ratified the releases and could not challenge their validity because they did not "tender back" or return the severance benefits they received from Coors before bringing suit. Colorado law provides that "[o]ne seeking to remedy fraudulent inducement of a contract must elect either to rescind the entire contract to restore the conditions existing before the agreement was made, or to affirm the entire contract and recover the difference between the actual value of the benefits received and the value of those benefits if they had been as represented." Trimble v. City & County of Denver, 697 P.2d 716, 723 (Colo. 1985).
In the context of ADEA claims, however, federal law has abrogated this common law doctrine through Congress' policy decision requiring heightened protection for older workers, implemented in the OWBPA. See Oubre v. Entergy Operations, Inc., 118 S. Ct. 838, 841-42 (1998). In Oubre, an opinion decided during the pendency of this appeal, an employee who, as part of a termination agreement, signed a release of all claims against the employer in exchange for severance pay, subsequently sued the employer for age discrimination in violation of the ADEA. The employer argued that the employee had ratified the release by failing to return the monies she had received. The Supreme Court specifically rejected this argument, holding that an employee's failure to tender back benefits could not act as a ratification for a release of an ADEA claim that is void under the OWBPA. The Court stated that "[t]he statutory command is clear: An employee 'may not waive' an ADEA claim unless the waiver or release satisfies the OWBPA's requirements." Id. at 841. The Court went on to say:
In addition to the reasons articulated by the district court, Coors argues that appellants' ADEA claims are barred by 29 U.S.C. 626(d)(2). Section 626(d) provides, in pertinent part, that:
Subsection (b)(2) extends the time period to 300 days if section 633(b) applies. Section 633(b) applies to states that have statutorily prohibited age discrimination. Here, 633(b) applies because the State of Colorado has statutorily prohibited employment discrimination on the basis of age, see Colo. Rev. Stat. § 24-34-402, and, therefore, the 300-day limitation period of subsection (d)(2) applies in this case. See 29 U.S.C. § 633(b).
The appellants accepted their benefit packages and resigned from Coors between September 8 and October 28, 1993. Coors argues that the latest date that any of the appellants could have been "constructively discharged" was November 5, 1993 ­ the last date the seven-day revocation period ended for any of the appellants. Using November 5, 1993, as the latest possible date for the alleged unlawful practice by Coors, the 300-day filing period mandated by 29 U.S.C. 626(d)(2) would have expired on September 1, 1994. Appellants (except Ms. Simpson) filed their claims with the EEOC between September 7 and 16, 1994. Coors argues, therefore, that appellants' claims are untimely and barred by the statute because none of appellants filed charges with the EEOC before September 1, 1994.
Applying Hulsey, we agree with Coors that the very latest date any of the appellants' claims could be considered to have arisen was on November 5, 1993. As stated by appellants, "[t]his is an employment discrimination case in which [appellants] . . . allege that [Coors] violated the [ADEA] by constructively discharging them because of their age." Aplts' Br. at 1. The allegedly discriminatory action by Coors was the constructive discharge of appellants because of their age. At the latest, this discharge occurred on November 5, 1993, the last day the seven-day revocation period ended for any of the appellants. While the hiring of new, younger employees might be evidence of Coors' alleged discriminatory intent at the time appellants left Coors, it is the alleged discriminatory "discharge" that appellants seek to redress. Appellants admit as much when they state that their "claims are primarily based on misrepresentations made by Coors which occurred on October 12, 1993 (elimination of 9.36 FTEs), October 14, 1993 (outsourcing still being considered), and November 5, 1993 (concealment of discriminatory intent at time of termination)." Aplts' Reply Br. at 6-7. Thus, November 5, 1993 is the very latest date any of the appellants' constructive discharge claims could be considered to have arisen and none of the appellants filed an administrative claim within 300 days of this date.
Alternatively, appellants argue that even if their ADEA claims arose on November 5, 1993, the 300-day filing period should be equitably tolled because of Coors' fraudulent concealment of their claims. Equitable tolling, like equitable estoppel, "provide[s] for tolling of the statute of limitations when a plaintiff's unawareness of his ability to bring a claim -- either unawareness of the facts necessary to support a discrimination charge or unawareness of his legal rights -- is due to defendant's misconduct." Christopher v. Mobil Oil Corp., 950 F.2d 1209, 1215 (5th Cir. 1992). "It is well settled that equitable tolling of the ADEA . . . is appropriate only where the circumstances of the case rise to the level of active deception . . . where a plaintiff has been lulled into inaction by her past employer." Hulsey v. KMart, Inc., 43 F.3d at 557 (quotations omitted). "When such deception is alleged on the part of an employer, the limitations period will not be tolled unless an employee's failure to timely file results from either a deliberate design by the employer or actions that the employer should unmistakably have understood would cause the employee to delay filing his charge." Id. (quotations omitted). Equitable tolling "is not warranted where an employee is aware of all of the facts constituting discriminatory treatment but lacks direct knowledge of the employer's subjective discriminatory purpose." Christopher, 950 F.2d at 1216.
For example, in Meyer v. Riegel Prods. Corp., 720 F.2d 303, 307 (3d Cir. 1983), a case very similar to the present action, the court held that the 300 day limitation period could be equitably tolled. In Meyer, Mr. Joseph W. Meyer brought suit against Riegel Products Corporation, Inc., claiming age discrimination under the ADEA. Mr. Meyer had been dismissed from Riegel four years before he would be entitled to full pension benefits, when the company was purchased and reorganized by the James River Corporation. The Third Circuit held that Riegel's alleged misrepresentation, that Mr. Meyer had been dismissed as part of a reorganization, furnished grounds for equitable tolling. After stating the rules regarding equitable tolling discussed above, the court reasoned that "[g]iven plaintiff's allegations, either of these phenomena ­ [the alleged pretextual reorganization and the alleged surreptitious plan to replace plaintiff with a younger worker] viewed in a light most favorable to plaintiff ­ could have caused him to temporarily defer filing with the Department of Labor." Id. at 307. Thus, the court concluded, Mr. Meyer "has surmounted his initial hurdle: alleging acts that, taken as alleged, could persuade a court to activate the doctrine of equitable tolling." Id. at 308.
Appellants' ADEA claims are remanded to the district court to consider whether under the totality of the circumstances the waivers were valid in light of appellants' allegations of fraud. If the district court finds that the waivers were not knowing and voluntary (i.e., that there was fraud), then the waivers do not bar appellants' ADEA claims. The court must then determine whether equitable tolling under 29 U.S.C. § 626(d)(2) applies and, if so, whether appellants' filed their claims with in the required period. However, if the district court determines that the waivers were knowing and voluntary and that there was no fraud, then appellants' ADEA claims are barred by the unambiguous terms of the releases.
B. APPELLANTS' STATE LAW CLAIMS
In the present case, appellants have affirmed the releases, after full knowledge of the "truth" respecting their allegation of fraudulent representations, by retaining their separation benefits. Appellants may not, under Colorado law, claim that they were fraudulently induced into signing the releases. To do so would allow appellants, "with knowledge of fraud, [to] speculate upon the advantages or disadvantages of [the releases], receive [the] benefits, and thereafter repudiate all its obligations." Tisdel v. Central Sav. Bank & Trust, 6 P.2d 912, 917-18 (Colo. 1931). Unlike appellants' ADEA claims, the OWBPA does not prevent appellants from ratifying the releases as to their state law claims. The Supreme Court specifically noted in Oubre that a release may be effective as to some claims but not as to the ADEA claims. Oubre, 118 S.Ct. at 842. That is the precise situation in this case.
Similar to their ADEA claims, appellants argue that the releases do not bar their state law claims because their state law claims accrued after they signed the releases, at the end of the seven-day revocation period when the releases became effective and appellants were "discharged" from Coors. However, like their ADEA claims, the releases specifically list the state law claims asserted by the appellants: "all common law rights and claims, such as breach of contract, express or implied, tort, whether negligent or intentional, wrongful discharge and any claim for fraud, omission or misrepresentation." Aplts' App., vol I, at 89. Again, appellants' strained construction of a single, general sentence would have the effect of removing these specifically listed claims from the releases, destroying their plain meaning when interpreted as a whole. The releases have but one reasonable meaning ­ to bar all of appellants' state law claims. Therefore, we affirm the conclusion of the district court and hold that appellants' state law claims are barred by the unambiguous terms of the releases.
Coors argues that it is entitled to its attorneys' fees because the releases are enforceable contracts shifting attorneys' fees. The releases state: "[y]ou agree that, if you bring any kind of legal claim against Coors that you have given up by signing this Agreement, then you will be violating this Agreement and you must pay all legal fees, other costs and expenses incurred by Coors in defending against your claim." Aplts' App., vol. I, at 89.
In response, appellants argue that a defendant/employer may not recover attorneys' fees under section 626(b) of the ADEA. Section 626(b) incorporates the remedial provision of the Fair Labor Standards Act, 29 U.S.C. § 216(b) (the "FLSA"), which provides that "[t]he court . . . shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action." 29 U.S.C. § 216(b). The appellants argue that under this language, which expressly provides for a plaintiff to recover attorneys' fees, it is implicit that a defendant/employer may not recover attorneys' fees for claims under the ADEA. They further argue that this "federal policy" reaches to appellants' pendent state law claims and preempts any state law contractual right to recover attorneys' fees.
First, it is unclear that appellants' initial premise ­ that a defendant/employer prevailing on a "released" ADEA claim may not receive attorneys' fees ­ is a correct statement of the law. While we have found no decision nor have the parties provided a decision that has specifically addressed contractual fee shifting under the ADEA, courts have generally held that the common law exceptions to the American rule apply to a defendant under the ADEA. For example, courts have specifically allowed defendants to recover attorneys' fees under Alyeska's "bad faith" exception. See, e.g., EEOC v. O & G Spring & Wire Forms Specialty Co., 38 F.3d 872, 883 (7th Cir. 1994) ("By explicitly changing [the American rule] with respect to plaintiffs but remaining silent with respect to defendants, the most sensible reading is that the FLSA and the ADEA adopt the common law rule with respect to prevailing defendants."); Gray v. New England Tel. & Tel. Co., 792 F.2d 251, 260 n.1 (1st Cir. 1986) ("Under ADEA, an award of attorney's fees is only authorized for plaintiffs. However, defendants may obtain fees under Alyeska." (citation omitted)).
However, assuming arguendo that appellants' initial premise is correct and there is some federal policy prohibiting defendants from recovering fees under the ADEA, there is nothing to indicate that federal policy should alter the common law rule regarding attorneys' fees for pendent state law claims. Contrary to appellants' argument, for which they present no authority, pendent jurisdiction over state law claims in a federal ADEA action does not generally preempt state law remedies. See, e.g., Cancellier v. Federated Dep't Stores, 672 F.2d 1312, 1318 (9th Cir. 1982) ("The ADEA does not preempt the award of tort damages on pendent state claims."); Moody v. Pepsi-Cola Metro. Bottling Co., Inc., 915 F.2d 201, 210 (6th Cir. 1990) ("[I]t is our best judgment that because there is no clear statement of Congressional intent to preempt, no requirement on any party to act in accordance with state law at the risk of violating federal law, and nothing inherent in the nature of age discrimination which requires federal preeminence, this [emotional damages pendent state law claim] is not an appropriate case for preemption.").
In addition, the requirements for releases under the OWBPA do not restrict an employer's right to contract regarding attorneys' fees. Rather, the requirements are extensive and give employees every opportunity to understand the terms of the releases (like the specific fee shifting provision at issue here), including encouraging employees to consider the terms of the releases with the advice of counsel. See 29 U.S.C. § 626(f)(1)(A)-(H).
Finally, the conclusion that any federal policy concerning fee shifting does not extend to pendent state law claims is consistent with the Supreme Court's holding in Oubre. In Oubre, the Court declined to extend the "federal policy" of the OWBPA ­ extirpating the common law doctrine of "tender back" for ADEA claims ­ to pendent state law claims. Oubre, 118 S.Ct. at 842. Similarly, we decline to extend any federal policy regarding fees embodied in the ADEA to pendent state law claims.
URL: http://ca10.washburnlaw.edu/cases/1999/08/97-1195.htm.