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holding that where the release explicitly encouraged the plaintiff to discuss the terms with an attorney, this factor weighed in favor of finding the release valid
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No. 11 Civ. 5245 (RJS)
10-04-2012
STACEY KRAMER, Plaintiff, v. VENDOME GROUP LLC, Defendant.
Plaintiff is appearing pro se. Defendant is represented by Zachary Winthrop Silverman of Edwards Wildman Palmer LLP, 750 Lexington Avenue, New York, New York 10022; and Emily M. Smith and Timothy P. Van Dyck of Edwards Wildman Palmer LLP, 111 Huntington Avenue, Boston, Massachusetts 02199.
MEMORANDUM AND ORDER :
Stacey Kramer ("Plaintiff"), proceeding pro se, brings this action against her former employer, Vendome Group LLC ("Defendant" or "Vendome"), claiming discrimination based on her disability, multiple sclerosis, under the Americans with Disabilities Act ("ADA"). Defendant argues that Plaintiff executed a release (the "Release"), thereby waiving any and all claims arising from the termination of her employment. Accordingly, Defendant moves to dismiss Plaintiff's claims pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons that follow, the Court grants Defendant's motion.
I. BACKGROUND
A. Facts
Defendant is a company that produces publications and manages events for professionals in the healthcare, real estate, and construction industries. From January 16, 2006 until her termination on March 31, 2010, Plaintiff worked for Defendant in the position of "Managing Editor." (Compl. at 3, 6.)
The following facts are taken from the Complaint ("Compl.") and the documents incorporated by reference therein. See Gregory v. Daly, 243 F.3d 687, 691 (2d Cir. 2001) (noting that, when considering a Rule 12(b)(6) motion to dismiss, a Court may consider documents incorporated by reference within the complaint). In consideration of Defendant's motion, the Court also considers Defendant's Memorandum of Law in Support of its Motion to Dismiss Plaintiff's Complaint ("Def.'s Br."), Plaintiff's Memorandum of Law In Support of Her Objection to Defendant's Motion to Dismiss Plaintiff's Complaint ("Pl.'s Br."), and, to the extent that they refer to documents incorporated by reference within the Complaint, the letters, declarations, and accompanying exhibits submitted in connection with the motion.
In early March 2010, Defendant placed Plaintiff on a "performance improvement plan" (the "Plan"). (See id. at 7; Decl. of William Newberry, dated April 27, 2012, Doc. No. 27 ("Newberry Decl."), Ex. 1 (Plan).) This Plan, which Plaintiff signed, outlined her performance issues and the steps that Plaintiff needed to take to avoid further action against her, including possible termination. (Id.)
Later that month, Debbie Cibelli, Defendant's Director of Human Resources, met with Plaintiff and told her that "things [weren't] working" and that "it doesn't look good." (Compl. at 7.) Cibelli indicated that, were Plaintiff to sign the Release, Plaintiff would receive a layoff and a package that included, inter alia: (1) one month's salary; and (2) qualification for a Consolidated Omnibus Budget Reconciliation Act of 1984 ("COBRA") subsidy through the American Recovery and Reinvestment Act, which was then set to expire on March 31, 2010. (See Newberry Decl. Ex. 2 (Release) at 2; Compl. at 7.) By signing the release, Plaintiff agreed to:
waive and release and promise never to assert any and all claims or charges that [Plaintiff has] or might have against [Defendant]. . . . These claims include, but are not limited to[,] claims for discrimination arising under federal, state[,] and local statutory or common law such as . . . the American[s] with Disabilities Act . . . .(Release at 2.) Plaintiff asked to take a copy of the Release to review with her husband and an attorney, but Cibelli refused. (See Compl. at 7.) Instead, on a separate piece of paper, Cibelli outlined in longhand a description of some of the provisions of the Release. (Id.)
On this separate piece of paper, Cibelli also included descriptions of two alternative options for Plaintiff, in which Plaintiff could: (1) take sick leave until April 1, 2010, at which point she could still be terminated but without, inter alia, the COBRA subsidy; or (2) take disability leave, having her doctor certify that she was unable to work. (See Pl.'s Ltr., dated Mar. 20, 2012 ("Pl.'s Mar. 20 Ltr."), Ex. A; Compl. at 7.) Under either option, however, Plaintiff arguably would have still been subject to termination upon her return and without the one month's salary or the COBRA subsidy, which was then set to expire on March 31, 2010. (Cf. Pl.'s Mar. 20 Ltr. Ex. A.)
On March 29, 2010, Plaintiff signed the Release. (See Release at 2.) Pursuant to its terms, the Release granted Plaintiff seven days to show the Release to a lawyer, change her mind, and revoke it following signature. (Id. ("You acknowledge that you will have seven days from the date you sign this [Release] to revoke the [Release] . . . ."); id. ("It is understood that you are hereby advised that during this time, you should discuss its terms and effects with an attorney.").) Plaintiff did not, however, discuss the Release with an attorney, nor did she attempt to revoke it prior to receiving a severance payment or filing her charge of discrimination (the "Charge") with the Equal Opportunity Commission (the "EEOC"). (See Compl. at 7.) Several weeks after Plaintiff signed the Release, on April 15, 2010, President Obama signed into law the Continuing Extension Act of 2010, retroactively extending the COBRA subsidy from the former cut-off date of March 31, 2010 to May 31, 2010. See 26 U.S.C. § 6432.
B. Procedural History
On November 10, 2010, Plaintiff filed her Charge with the EEOC, alleging, under the ADA, that Defendant's "decisions not to promote [her], to place [her] on a [Plan], and to pressure [her] into leaving the company by using [her] disability and need for continued insurance coverage as a form of leverage, were based on discriminatory reasons on account of [her] disability." (Compl. at 7.) By letter dated April 27, 2011, the EEOC notified Plaintiff that it was dismissing the Charge; the letter also provided Plaintiff with a "Notice of Suit Rights," indicating that any lawsuit "must be filed within 90 days of [her] receipt of this notice." (Id. at 5 (emphasis omitted).) Plaintiff received the letter on the following day - April 28, 2011. (Id. at 4.)
The EEOC Charge, which is attached to the Complaint, is a public record of which the Court may take judicial notice without converting Defendant's motion into a motion for summary judgment. See, e.g., Muhammad v. N.Y.C. Transit Auth., 450 F. Supp. 2d 198, 204-05 (E.D.N.Y. 2006).
On July 25, 2011, within ninety days of Plaintiff's receipt of the EEOC letter, Plaintiff initiated this action by filing a complaint. (Doc. No. 2.) Defendant filed its motion to dismiss on April 27, 2012 (Doc. No. 26), and the motion was fully submitted as of May 29, 2012. On June 29, 2012, the Court heard oral argument on Defendant's motion.
II. DISCUSSION
A. Legal Standard
On a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court must accept all well-pleaded allegations contained in the complaint as true and draw all reasonable inferences in the plaintiff's favor. See ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007); Grandon v. Merrill Lynch & Co., 147 F.3d 184, 188 (2d Cir. 1998). Pro se filings in particular are read liberally and interpreted "to raise the strongest arguments that they suggest." Pabon v. Wright, 459 F.3d 241, 248 (2d Cir. 2006) (internal quotation marks omitted). To state a legally sufficient claim, a complaint must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). By contrast, a pleading that only "offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" Id. (quoting Twombly, 550 U.S. at 555). If the plaintiff "ha[s] not nudged [her] claims across the line from conceivable to plausible, [her] complaint must be dismissed." Twombly, 550 U.S. at 570.
B. Validity and Enforceability of
the Release
As noted above, at the heart of this matter is whether, by signing the Release, Plaintiff waived any and all claims arising from the termination of her employment. It is well-established that employees "may validly waive a claim of discrimination so long as the waiver is made knowingly and willfully." Bormann v. AT & T Commc'ns, Inc., 875 F.2d 399, 402 (2d Cir. 1989) (internal quotation marks omitted). To identify whether a release of federal discrimination claims is made knowingly and willfully, courts in this Circuit use the "totality of the circumstances" test. Id. at 403 (internal quotation marks omitted). This test considers six factors:
1) the plaintiff's education and business experience, 2) the amount of time the plaintiff had possession of or access to the agreement before signing it, 3) the role of plaintiff in deciding the terms of the agreement, 4) the clarity of the agreement, 5) whether the plaintiff was represented by or consulted with an attorney, and 6) whether the consideration given in exchange for the waiver exceeds employee benefits to which the employee was already entitled by contract or law.Id. These factors "are neither exhaustive nor must all of [them] be satisfied before a release is enforceable." Laramee v. Jewish Guild for the Blind, 72 F. Supp. 2d 357, 360 (S.D.N.Y. 1999); see also Matusovsky v. Merrill Lynch, 186 F. Supp. 2d 397, 400 (S.D.N.Y. 2002) ("Not every factor must be present for a waiver to be enforceable."). The Court will consider each in turn.
1. Plaintiff's Education and
Business Experience
The first factor turns on whether a plaintiff had sufficient ability at the time of signature to be "capable of understanding" the release. E.g., Nicholas v. Nynex, Inc., 929 F. Supp. 727, 731 (S.D.N.Y. 1996). Importantly, a party need not have had a higher education degree or substantial business experience for this factor to weigh in favor of upholding a release. See Laramee, 72 F. Supp. 2d at 360 (collecting cases and noting that having a high school education and a secretarial position does not warrant invalidating a release).
Here, because Plaintiff worked as an editor at Vendome for four years, "received promotions, [as well as] salary increases" (Compl. at 3), "dealt with human resources [ . . . ,] paid taxes[, and] understood that [her] employment was governed by various federal, state[,] and local laws" (Tr. of Pre-Motion Conference, Mar. 7, 2012, at 16-17), the Court has little difficulty concluding that Plaintiff had sufficient intelligence, ability, and experience to be capable of understanding the Release. Accordingly, this factor weighs strongly in favor of finding that Plaintiff's waiver was knowing and willful.
2. Plaintiff's Time to Review the Release
Prior to Signature
Turning to the second factor, there is no dispute that Plaintiff had at least four days to consider the Release before signing it. In this district, courts have concluded that four days is sufficient time for a plaintiff "to acquaint herself with [a r]elease's terms and make a considered decision." Cordoba v. Beau Deitl & Assocs., No. 02 Civ. 4951 (MBM), 2003 WL 22902266, at *5 (S.D.N.Y. Dec. 8, 2003); accord Dewey v. PTT Telecom Neth., US, Inc., No. 94 Civ. 5983 (HB), 1995 WL 542447, at *2 (S.D.N.Y. Sept. 12, 1995).
The parties dispute the date of Plaintiff's meeting with Cibelli. Defendant appears to argue that they met on March 25, 2010, whereas Plaintiff argues that they met on March 23. (See Def.'s Br. at 3; Pl.'s Br. at 2.) However, for purposes of the motion to dismiss, the Court accepts Plaintiff's account as set forth in her Complaint. See ATSI Commc'ns, 493 F.3d at 98; (Compl. at 7).
Here, Plaintiff makes much of the fact that Defendant did not permit Plaintiff to take the document home to review pre-signature and instead gave Plaintiff only "a separate piece of paper" with the Release's "key provisions," not including the waiver provision. (Pl.'s Br. at 2-3; Pl.'s Mar. 20 Ltr. at 3.) However, as noted above, the Release did expressly provide Plaintiff with a seven-day period in which she was free to revoke her acceptance after signature. (Release at 2); see Evans v. Waldorf-Astoria Corp., 827 F. Supp. 911, 913 (E.D.N.Y. 1993) (holding that a release was valid where the plaintiff had access to the agreement for only a few hours before executing it), aff'd, 33 F.3d 49 (2d Cir. 1994) ; cf. Farrell v. Title Assocs., Inc., No. 03 Civ. 4608 (GWG), 2004 WL 5131862, at *4 (S.D.N.Y. Feb. 20, 2004) (explaining that, in the context of the Age Discrimination in Employment Act, a "knowing and voluntary" waiver requires a seven-day revocation period post-signature). Thus, this factor likewise weighs in favor of Plaintiff's waiver being knowing and willful.
3. Plaintiff's Role in Deciding the
Release's Terms
Courts in this district have held that a plaintiff can be said to have had "a significant role in deciding the terms of [a release]" where she has, for example, bargained for an increase in severance payment. E.g., Russomanno v. Murphy, No. 09 Civ. 8804 (RJH), 2011 WL 609878, at *4 (S.D.N.Y. Feb. 16, 2011). Here, it does not appear that Plaintiff had any role in deciding the terms of the Release or in negotiating the amount of her severance payment. (See Compl. at 7; see Pl.'s Mar. 20 Ltr. Ex. A.) Accordingly, this factor weighs in favor of Plaintiff and against Defendant.
4. Clarity of the Release's Language
Turning to the fourth factor, the Court finds that the language of the Release is "clear and unambiguous." Matusovsky, 186 F. Supp. 2d at 400. As noted above, the Release stated - in plain English that would be clear to a layperson - that upon signing the Release, Plaintiff would "waive and release . . . all claims or charges that [Plaintiff has] or might have against [Defendant, including] . . . claims for discrimination arising under . . . the American[s] with Disabilities Act." (Release at 2); see also Matusovsky, 186 F. Supp. 2d at 399-400 (concluding that a release stating that the plaintiff "release[s] and give[s] up any and all claims which [the plaintiff] may have against [the defendant,] . . . including those of which [the plaintiff is] not aware and those not mentioned in this release," was "clear and unambiguous" and "written in plain English" (citation omitted)); Laramee, 72 F. Supp. 2d at 361 (noting that where a release "is written in plain English," a plaintiff cannot "avoid its consequences by claiming that she did not understand its terms"). Accordingly, the Court finds the language of the Release to be clear and unambiguous, weighing in favor of a finding that Plaintiff's waiver was knowing and willful.
5. Plaintiff's Consultation with an Attorney
The fifth factor focuses on whether Plaintiff was represented by or consulted with an attorney prior to signing the Release. Courts in this district have held that a release's encouragement to consult with an attorney weighs in favor of the agreement's enforceability. See Bachiller v. Turn On Products, Inc., No. 00 Civ. 8701 (JSM), 2003 WL 1878416, at *4 (S.D.N.Y. Apr. 14, 2003) , aff'd, 86 F. App'x 465 (2d Cir. 2004) ; see also Hsueh v. Bank of N.Y., No. 05 Civ. 5345 (JSR), 2006 WL 2778858, at *5 (S.D.N.Y. Sept. 26, 2006) (holding that the release was valid partly because it informed plaintiff of the opportunity to consult with counsel prior to signing). Plaintiff was neither represented by, nor consulted with, an attorney prior to signature. Indeed, because Cibelli "wouldn't give [Plaintiff] a copy of [the Release] pre[-]signature," she could not "take [it] to a lawyer" before signing it. (Tr. of Oral Arg., June 29, 2012 ("Tr."), at 8-9; see Compl. at 7.) However, the Release explicitly "encouraged [Plaintiff] to take [the Release] to a lawyer" post-signature and expressly provided Plaintiff with a seven-day window in which she could revoke her acceptance of the Release for any reason whatsoever. (See Tr. 8; Release at 2.)
Plaintiff nonetheless points to the Release's non-disclosure language, arguing that "she did not believe that she could discuss the terms [of the Release] with an attorney" because it would have been considered a disclosure, in violation of the Release. (Pl.'s Br. at 3.) However, Plaintiff's confusion does not reflect an underlying ambiguity in the document, nor that she was prevented from consulting with an attorney. Indeed, the very next sentence of the Release provides, in plain terms, that "[Plaintiff] should discuss [the Release's] terms and effects with an attorney." (Release at 2.) Given this clear language, that Plaintiff chose not to review the Release with an attorney does not mean that she did not have the opportunity to do so.
The non-disclosure provision states, "[y]ou agree that you will not disclose, or cause to be disclosed in any way, any information or documents relating to the operations of the Company, or the terms of this Agreement, except for the purpose of enforcing this Agreement, should that ever be necessary." (Release at 2.)
As a result, the Court finds that this factor does not undermine the validity of the Release and, in fact, weighs in favor of a finding that the release was knowing and willful.
6. Consideration
The final factor for the Court to consider turns on whether the Release's consideration exceeded the benefits that Plaintiff would have received absent her signature. Courts in this district have held that a plaintiff's receipt of compensation to which she was "not otherwise entitled" is sufficient consideration for a valid release. Bachiller, 2003 WL 1878416, at *4; see also Laramee, 72 F. Supp. 2d at 361 (finding adequate consideration for a plaintiff's execution of release where an employer gave the plaintiff severance pay and health care coverage).
Although qualification for the COBRA subsidy, among other things, might have made termination pursuant to the Release more attractive for Plaintiff, the Release explicitly states that the severance pay alone constituted consideration for the Release. (Release at 2.) Thus, as a result of signing the Release, Plaintiff received a month's salary and other benefits that she would not have been entitled to had she simply been terminated. See Laramee, 72 F. Supp. 2d at 361 (finding that this factor weighed in favor of the validity of a release where the "plaintiff received greater compensation than she would have been entitled to had she not signed the release"); Dewey, 1995 WL 542447, at *2 (finding that this factor weighed in favor of the validity of a release where the plaintiff received "one month's salary, employee benefits[,] and other benefits, even though [the plaintiff's] employment contract did not entitle her to any compensation for resigning"). Accordingly, this factor weighs in favor of the validity of the Release.
* * *
Considering all of these factors, as well as the totality of the circumstances, the Court finds, based upon the facts alleged in the Complaint and the language of the Release, that Plaintiff signed the Release knowingly and willfully, and, therefore, the Release is valid and enforceable.
C. Duress
Plaintiff raises a similar but distinct argument that the Release is voidable on the grounds of duress. Specifically, she asserts that "Defendant used her eligibility for benefits under COBRA and the premium subsidy as a tool for Plaintiff to sign the Release[ and that] . . . her need for continued insurance coverage was leveraged to pressure her to leave." (Pl.'s Br. at 2.)
To prove economic duress, a party seeking to void a contract must plausibly plead that the release in question was procured by (1) "a threat, (2) which was unlawfully made, and (3) caused involuntary acceptance of contract terms, (4) because the circumstances permitted no other alternative." Bachiller, 2003 WL 1878416, at *4 (internal quotation marks omitted); see also Foundry Capital Sarl v. Int'l Value Advisers, LLC, 947 N.Y.S.2d 98, 99-100 (App. Div. 2012) (affirming dismissal where there was "no actionable duress alleged by the complaint" (internal quotation marks omitted)). However, a party "cannot successfully claim duress as a defense to a contract when [s]he had an alternative to signing the agreement," such as pursuing her legal remedies. Reid v. IBM Corp., No. 95 Civ. 1755 (MBM), 1997 WL 357969, at *7 (S.D.N.Y. June 26, 1997) (internal quotation marks omitted); see also id. (holding that rejecting severance benefits and pursuing legal claims is a reasonable alternative to executing a release, "even if a hefty financial incentive is offered for signing [a r]elease").
Furthermore, "a mere demonstration of financial pressure or unequal bargaining power will not, by itself, establish economic duress." Interpharm, Inc. v. Wells Fargo Bank, Nat'l Ass'n, 655 F.3d 136, 142 (2d Cir. 2011). Critically, to prove duress, a plaintiff must demonstrate that the difficult circumstances she faces are a result of the defendant's actions. Mazurkiewicz v. N.Y.C. Health & Hosps. Corp. , 585 F. Supp. 2d 491, 500 (S.D.N.Y. 2008) ("[T]he duress (the threat) must emanate from the party who is attempting to obtain the agreement."), aff'd, 356 F. App'x 521 (2d Cir. 2009); cf. Bus. Incentives Co. v. Sony Corp. of Am., 397 F. Supp. 63, 69 (S.D.N.Y. 1975) ("Mere hard bargaining positions, if lawful, and the press of financial circumstances, not caused by the defendant, will not be deemed duress. The alleged duress must be proven to have been the result of defendant's conduct and not of the plaintiff's own necessities."). Indeed, to constitute duress, a defendant's actions must have amounted to "threats that preclude[d] the exercise of [a plaintiff's] free will." Reid, 1997 WL 357969, at *7; see also Interpham, 655 F.3d at 137 (affirming dismissal where plaintiff failed to plead plausibly that defendant "made a wrongful threat" (internal quotation marks omitted)).
Here, Plaintiff makes no allegations that Defendant made any threats against her that precluded her exercise of free will when she signed the Release. Although Plaintiff alleges that she felt "compelled to take advantage of [Defendant's] offer" while she "had the chance" (Compl. at 7), the circumstances did permit alternatives, including pursuing legal remedies. Moreover, Plaintiff's assertion that "the pressure to obtain health insurance was duress" (Pl.'s Br. at 2) conflates her need for the severance benefits (including one month's pay and the COBRA subsidy) and improper pressure from Defendant. That Plaintiff may have felt pressure to sign the Release given her financial constraints and medical needs is understandable. However, that pressure, when not caused by Defendant, is insufficient to prove duress.
Because the Court finds that the Release is valid and enforceable and that Plaintiff has failed to plausibly plead duress, the Court need not address Defendant's alternative argument - that Plaintiff ratified the Release. (See Def.'s Br. at 8-9.) --------
III. CONCLUSION
Although sympathetic to the difficult position in which Plaintiff found herself, the Court concludes that Plaintiff made a knowing and willful waiver of all of her claims when she signed the Release. As such, Plaintiff's claims do not rise to the level of legal plausibility required to survive Defendant's motion to dismiss. Accordingly, the Court grants Defendant's motion in its entirety and with prejudice. The Clerk of the Court is respectfully directed to terminate the motion located at Doc. No. 26 and to close this case. SO ORDERED.
/s/_________
RICHARD J. SULLIVAN
United States District Judge Dated: October 4, 2012
New York, New York
* * *
Plaintiff is appearing pro se.
Defendant is represented by Zachary Winthrop Silverman of Edwards Wildman Palmer LLP, 750 Lexington Avenue, New York, New York 10022; and Emily M. Smith and Timothy P. Van Dyck of Edwards Wildman Palmer LLP, 111 Huntington Avenue, Boston, Massachusetts 02199.
A copy of this Memorandum and Order was sent to:
Stacey Kramer 28-15 34th Street Apt. 1D Astoria, New York 11103