Opinion ID: 2998119
Heading Depth: 2
Heading Rank: 2

Heading: Allstate’s Appeal

Text: Allstate appeals the district court’s conclusion that while Schneider had breached his agreement with the Company 14 Nos. 04-2310 & 04-2365 (the Release), Allstate was not entitled to damages arising from that breach. Schneider wanted to have his cake and eat it too. In spite of his signing the Release he sued under the ADEA. In the meantime, he took full advantage of Option Two by selling his book and retaining the bonus (and the benefit of the forgiven loan). Allstate claims damages in the amount of $126,000: $120,000 for the economic interest in his book of business Schneider was able to sell; $5,000 for the bonus he was given for signing the Release; and $1,000 for the forgiveness of an advance Allstate had given him. Allstate does not seek attorney’s fees. The Release signed by Schneider provided that the employee “hereby release[s], waive[s], and forever discharge[s] Allstate . . . from any and all liability, actions, charges, causes of action, demands, damages, entitlements or claims for relief or remuneration of any kind whatsoever, . . . including . . . any claim for age or other types of discrmination prohibited under the [ADEA, Title VII, the ADA, and ERISA].” Allstate and the district court consider the Release a covenant not to sue and consequently, Allstate argues Schneider breached the covenant when he sued Allstate. We disagree. The Release does not amount to a covenant not to sue, but rather is a release from liability for any potential past claims. While the Release gives Allstate a defense that prevents Schneider from winning, the Release does not contain plain language that amounts to an agreement not to sue. As the Eighth Circuit recently noted, “[a] release of claims and a covenant not to sue serve different purposes.” Thomforde v. Int’l Bus. Machs. Corp., 406 F.3d 500, Nos. 04-2310 & 04-2365 15 5 503 (8th Cir. 2005). The latter does not result in breach upon the filing of a suit. Instead, it provides Allstate with an effective affirmative defense should a claim be raised. Because the Release was a release of claims and not a covenant not to sue, Schneider did not breach the Release with his suit. Allstate received the benefit of its bargain— an 6 affirmative defense. Summary judgment should have been granted in favor of Schneider on Allstate’s claim of breach.