Opinion ID: 1435113
Heading Depth: 2
Heading Rank: 3

Heading: Stock Benefits Under the Severance Agreement

Text: Appellants Bender and Mataczynski [4] challenge the district court's conclusion that the releases they provided for purposes of participating in the Severance Plan did not satisfy their obligations under that plan. Appellants claim that the release provided by the company under the Severance Plan that they were required to sign was much broader than what they term a standard release of claims because it included a confidentiality agreement, a noncompete agreement, a return of property agreement, a nondisparagement agreement, and an agreement as to injunctive relief. Appellants also assert that the substitute release that they provided included everything required by the Severance Plan for a valid release. An employer may validly condition the payment of severance benefits on the employee's agreement to release the employer from any and all claims. See Lockheed Corp. v. Spink, 517 U.S. 882, 893-94, 116 S.Ct. 1783, 135 L.Ed.2d 153 (1996) (explaining that requiring an employee to waive employment-related claims is a permissible quid pro quo in exchange for the employer's promise to provide increased benefits, such as provided in a severance plan); Petersen v. E.F. Johnson Co., 366 F.3d 676, 680 (8th Cir.2004) (upholding an employer's requirement that a participant must release claims under an old plan before he is entitled to benefits under a new plan). The plain language of the plan required the participants to provide the Company with a release in a form to be provided by the Company. (Appellants' App. at 66-67.) This condition clearly was not met. Further, the substitute release provided by the Appellants omitted an explicit element required of the release. The substitute release limited its coverage to known claims by providing that it covered claims arising out of actions occurring to the date of the execution of this Release of which the Participant is or has been made aware or has been reasonably put on notice. ( Id. at 76.) The Severance Plan required that unknown claims be included in the release by covering claims whether or not any such claim is known at the time of separation. ( Id. at 67.) Appellants' substitute release did not meet the conditions of the Severance Plan, and the district court did not err in granting summary judgment to Xcel on Appellants Bender's and Mataczynski's claims for stock benefits.