Dwight D. Myricks v. Federal Reserve Bank of Atl.
2007 U.S. App. LEXIS 5241, 480 F.3d 1036, 89 Empl. Prac. Dec. (CCH) 42,731 (2007)
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Rule of Law:
When an employee, represented by counsel, signs a clear and unambiguous severance agreement that releases all legal claims in exchange for consideration, there is a strong presumption that the waiver of a pending Title VII claim was knowing and voluntary, absent fraud or duress.
Facts:
- Dwight Myricks, an employee of the Federal Reserve Bank of Atlanta, had a pending Title VII discrimination lawsuit against the Bank.
- While his lawsuit was on appeal, the Bank closed Myricks's department, eliminating his and approximately 200 other jobs.
- The Bank offered affected employees, including Myricks, a choice between two severance packages: one with enhanced benefits (one year's salary and improved retirement) in exchange for signing a general release of all legal claims, or a standard package of two weeks' salary without a release.
- Approximately 60 days before the deadline, the Bank sent a draft of the release to Myricks's attorney, explicitly stating in a letter that the release would cover all claims, including those in his pending lawsuit.
- Through his attorney, Myricks attempted to negotiate a separate, more generous settlement for his lawsuit, making a counteroffer of $111,580 in addition to the severance package.
- The Bank rejected Myricks's counteroffer and instead offered the enhanced severance plus an additional $6,600, which came with extra conditions. Myricks rejected this offer.
- On the final day to accept the severance offer, Myricks's attorney informed the Bank that Myricks intended to sign the standard severance agreement and release.
- Myricks then signed the severance agreement and general release without alteration, thereby receiving the enhanced benefits package.
Procedural Posture:
- Dwight Myricks filed a complaint in federal district court against the Federal Reserve Bank of Atlanta alleging employment discrimination under Title VII.
- The district court granted the Bank's motion for summary judgment.
- Myricks, as appellant, appealed to the U.S. Court of Appeals for the Eleventh Circuit, which reversed the summary judgment and remanded the case.
- On remand to the district court, the Bank again moved for summary judgment, this time on the grounds that Myricks had waived his claim by signing a severance agreement and general release.
- The district court granted the Bank's second motion for summary judgment, finding the release was knowing and voluntary.
- Myricks, as appellant, appealed this second grant of summary judgment to the U.S. Court of Appeals for the Eleventh Circuit.
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Issue:
Does an educated employee, who is represented by counsel and has ample time to review the terms, knowingly and voluntarily waive a pending Title VII discrimination claim by signing a general release in a severance agreement for enhanced benefits?
Opinions:
Majority - Pryor, Circuit Judge
Yes, the employee knowingly and voluntarily waived his pending Title VII discrimination claim. The validity of a Title VII waiver is determined by the totality of the circumstances, considering factors such as the employee's education, the time allowed for consideration, the clarity of the agreement, and the opportunity to consult with an attorney. In this case, Myricks was educated, had 60 days to consider the clear agreement, and was actively represented by counsel who negotiated with the Bank. Adopting the reasoning of the Seventh Circuit, the court held that a plaintiff who executes a release on the advice of independent counsel is presumed to have done so knowingly and voluntarily. Myricks's subjective belief that the release would not affect his pending lawsuit is insufficient to overcome the objective evidence and the clear, unambiguous language of the agreement he signed.
Analysis:
This decision reinforces the enforceability of general releases in severance agreements, particularly when an employee is represented by counsel. It establishes a strong presumption of validity that makes it difficult for employees to later challenge a release by claiming a subjective misunderstanding of its terms. By adopting the Seventh Circuit's presumption, the court shifts the burden heavily onto the employee to prove fraud or duress, which are difficult standards to meet. This precedent provides employers with greater certainty that a properly executed severance agreement will effectively end all legal disputes, including active litigation.
