Amicus Curiae Brief — Oubre v. Entergy Operations, Inc.

K-»

ö FILED

(6) JUN 20 %% |

No. 96-1291 DGGE OE THE GLENS |

In the Supreme Court of the United States

OCTOBER TERM, 1996

DOLORES OUBRE, PETITIONER

v.

ENTERGY OPERATIONS, INC.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS .

FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES AND THE

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

AS AMICI CURIAE SUPPORTING PETITIONER

WALTER DELLINGER

Acting Solicitor General 9

GREGORY C. STEWART SETH P. WAXMAN

General Counsel Deputy Solicitor General

J. RAY TERRY, JR. BETH S. BRINKMANN

Deputy General Counsel Assistant to the Solicitor

General

GWENDOLYN YOUNG REAMS

Associate General Counsel Department of Justice

CAROLYN L. WHEELER Washington, D.C. 20530-0001

Assistant General Counsel (202) 514-2217

PAUL BoGas

Attorney

Equal Employment

Opportunity Commission

Washington, D.C. 20507

QUESTION PRESENTED

Whether petitioner’s failure to tender back sever-

ance payments to her employer constitutes ratifica-

tion of a waiver of claims under the Age Discrimina-

tion in Employment Act (ADEA), 29 U.S.C. 621 et

seq., notwithstanding the fact that under the ADEA,

as amended by the Older Workers Benefits Protection

Act (OWBPA), 29 U.S.C. 626(f), any waiver must be

knowing and voluntary, and must satisfy specifically

enumerated statutory prerequisites that were not

met by the waiver in this case.

(I)

*

TABLE OF CONTENTS

Page

Interests of the United States and the Equal

Employment Opportunity Commission l

EE eT 3

r 8

Argument:

An employee does not waive a claim under the

ADEA by execution of a release of claims and re-

tention of severance payments made thereunder,

if the release does not conform to the statutory

prerequisites for a knowing and voluntary waiver

of ADEA claims under the OWBPA ........................ 9

A. The text and structure of the OWBPA establish

that, absent a waiver that meets the OWBPA's

prerequisites, waiver of a right or claim under

the ADEA cannot oc mt 10

B. The history surrounding enactment of the —

any

OWBPA's waiver prerequi sites 17

C. The Court's decision in Hogue requires rejection

of the tender back doctrine under the ADE 23

EE 30

TABLE OF AUTHORITIES

Cases:

Astoria Federal Sav. & Loan Asen v. Solimino,

ET 14

Blakeney v. Lomas Info. Sys., Inc., 65 F.3d 482

(5th Cir. 1995), cert. denied, 116 S. Ct. 1042 (1996) . 7, 12

Blistein v. St. John's College, 74 F.3d 1459 (4th

GS TED crecncsentetescesencsrsnesvcsesnsnsemnssensensenstscesacseesece 12

(III)

IV

Cases—Continued: Page

Botefur v. City of Eagle Point, 7 F.3d 152 (9th Cir.

1 ͤ—— 27, 28

Brooklyn Saus. Bank v. O Neil, 324 U.S. 697

98 9—˖＋˖ĩ˖ñ4Z0c,.ͥ.Ü t. E 15

Constant v. Continental Tel. Co., 745 F. Supp.

1374 (D. C. I. 1800 ————˖.—ꝗ(.—ꝗ( . . 22

Fleming v. United States Postal Serv. AMF

O’Hare, 27 F.3d 259 (7th Cir. 1994), cert. denied,

513 U.S. 1085 (1998) — e 26, 27

Forbus v. Sears Roebuck & Co., 958 F.2d 1036

(11th Cir.), cert. denied, 506 U.S. 955 (1992) ..... 22, 25, 28

Grillet v. Sears, Roebuck & Co., 927 F.2d 217

0 11, 22

Hogue v. Southern Ry., 390 U.S. 516 (1968) ...... 9, 24, 26,

27, 28, 29

Home Box Office, Inc. v. Spectrum Elecs., Inc.,

100 F. R. D. 379 (E.D. Pa. 1983). 29

Isaacs v. Caterpillar, Inc., 765 F. Supp. 1359

C. D. 1 0000 ———7———— 26, 28

Long v. Sears Roebuck & Co., 105 F.3d 1529 (3d

%%% en passim

McKennon v. Nashville Banner Publishing Co.,

513 U.S. 352 (1995) 2.24, 28, 29

O Shen v. Commercial Credit Corp.:

784 F. Supp. 218 (D. Md. 1990), aff d. 930 F. 2d 358

(4th Cir.), cert. denied, 502 U.S. 859 (1991) ......... 22

930 F.2d 358 (4th Cir.), cert. denied, 502 U.S. 859

— 499122 77——˖ͥ—u————:9.———L———.—————— 12, 22

Oberg v. Allied Van Lines, Inc.:

59 Fair Empl. Prac. Cas. (BNA) 769 (N. D. Ill. 1992),

aff'd, 11 F.3d 679 (7th Cir. 1993), cert. denied,

511 U.S. 1108 (1994) .. - 25-26

11 F.3d 679 (7th Cir. 1998), cert. denied, 511 US.

110B % ———b. 11. 14, 15, 28, 29

Cases—Continued: Page

Raczak v. Ameritech Corp., 103 F.3d 1257 (6th Cir.

—BWwů— ͤ ———— 28

Smith v. Pinell, 597 F.2d 994 (5th Cir. 1979) .......... 28

Soliman v. Digital Equip. Corp., 869 F. Supp. 65

I 16

Turin v. Food Fair Stores, Inc., 197 F. Supp. 827

11 ö—üů2— . 29

United States v. Locke, 471 U.S. 84 (1985) ............. 14

Wahsner v. American Motors Sales Corp., 597

ene 28

Wamsley v. Champlin Refining & Chemicals, Inc.,

11 F.3d 534 (5th Cir. 1993), cert. denied, 115 S. Ct.

BG — 7, 11, 15, 16, 17, 23, 26, 27

Widener v. Arco Oil & Gas Co., 717 F. Supp. 1211

1 ——5ũ⸗ 22

Wittorf v. Shell Oil Co., 37 F.3d 1151 (Sth Cir.

OE —-— 12

Statutes and regulation:

Age Discrimination in Employment Act, 29 U.S.C.

621 et seq.

29 U.S.C. 623(a)(1)

29 U.S.C. 623(a)(2)

§ 7, 29 U.S.C. 626

§ 7(f), 29 U.S.C. 626(f)

§ 7(f 1), 29 U.S.C. HN) 3, 4, 8, 10, 11, 15, 16

§ 7(f 1M A), 29 U.S.C. SNN 3, 4, 10

§ 7(f 1B), 29 U.S.C. 626(f 1B) .......... 3, 4, 5, 7, 10

§ 7(fK1KC), 29 U.S.C. SH NHH MC 3, 4, 10

§ 7(f 1D), 29 U.S.C. SNN) 3, 4, 10

§ 7(f 1 XE), 29 U.S.C. SH NINE) 3, 4, 10

§ 7(f1 MF Mii), 29 U.S.C. 626(f 1 F Mii)

§ 7(f1MG), 29 U.S.C. 626(f 1G) ........... 4, 6, 7, 10,

14, 16

§ 7(f 1H), 29 U.S.C. 626(f 1H) .................... 6, 10

VI

Statutes and regulation—Continued: Page

§ 7(f)(1)H\i), 29 U.S. 62647) Hi) ................. 4, 10

§ 7(f (1 Hii), 29 U.S.C. 626(f)(1 Hii) .......... 4, 10

70002), 29 U.S.C. 6260 2) 4, 10, 11

§ 7(f 2A), 29 U.S.C. G26(F 2A) ) 4

§ 7(f (2B), 29 U.S.C. 626(f)(2)(B) 4

§ 7(£ (3), 29 U.S.C. 62606) 03) 4, 13

1? 2

Automobile Dealers Day in Cart Act, 15 U.S.C. 1221

— K 28

Federal Employer’s Liability Act, 45 U.S.C. 51

— . — 24

Older Workers Benefit Protection Act, Pub. L. No.

888008880. passim

Tit. II, $ 201, 104 Stat. 988 3

Tit. II, $ 2O2(b), 104 Stat. 984 cccccccceeereeennee 19

II ee ee 28

29 C.F.R. . ice) (8 19

Miscellaneous:

133 Cong. Rec. H12,392 (daily ed. Dec. 21, 1987) ....... 19

134 Cong. Rec. H8297 (daily ed. Sept. 26, 1988) ......... 19

~ 135 Cong. Rec. H7618 (daily ed. Oct. 26, 1989) ........... 19

136 Cong. Rec.:

p. H8738 (daily ed. Oct. 3, 1990) . 20

p. $13,607 (daily ed. Sept. 24, 1990) ...... .... .. 20

p. $13,611 (daily ed. Sept. 24, 1990) ...... 20

52 Fed. Reg. 32,293 (1987) 7—————.õ 19

H.R. Rep. No. 664, 101st Cong., 2d Sess. (1990) ....... 18, 19,

20, 23, 25, 27

S. Rep. No. 263, 101st Cong., 2d Sess. (1990) . 18-19, 20, 21

23

S. Rep. No. 79, 101st Cong., Ist Sess. (1989) ............... 18

Restatement (Second) of Contracts 14, 15, 17

}

In the Supreme Court of the United States

OCTOBER TERM, 1996

No. 96-1291

DOLORES OUBRE, PETITIONER

.

ENTERGY OPERATIONS, INC.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES AND THE

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

AS AMICI CURIAE SUPPORTING PETITIONER

INTERESTS OF THE UNITED STATES AND THE

3 die aacteate ore

(1)

2

waiver of claims within the meaning of the ADEA, as

amended by the Older Workers Benefit Protection

Act (OWBPA), 29 U.S.C. 626(f), an employee’s ADEA

claim is nonetheless waived if the employee retains

severance payments that were made in conjunction

with the release. In the view of the courts below, re-

tention of severance benefits ratifies an earlier,

otherwise invalid, ADEA release and is not subject to

the requirements of the OWBPA. The court of ap-

peals’ ruling thereby substantially affects the statu-

tory scheme fashioned by Congress to govern older

workers’ rights under the ADEA.

The Equal Employment Opportunity Commission

(EEOC) has a strong interest in ensuring that the

ADEA and the OWBPA are correctly interpreted to

serve their intended purposes. The EEOC has pri-

mary responsibility for administering and enforcing

the ADEA and has an interest in the effectiveness of

the entire congressional plan for eradicating age dis-

crimination, including private actions by employees

that further the purposes of the ADEA. The Court

has recognized that It he private litigant who seeks

redress for his or her injuries vindicates both the de-

terrence and the compensation objectives of the

ADEA.” McKennon v. Nashville Banner Publish-

ing Co., 513 U.S. 352, 358 (1995). Ensuring that pri-

vate litigants retain their full rights under the

OWBPA to pursue ADEA claims thus furthers the

mission of the EEOC to enforce the ADEA.

The ADEA’s prohibition against discrimination on

the basis of age extends to f. agencies. 29 U.S.C.

633a. Thus, the United States, as an employer, is

bound by the OWBPA’s provisions regarding waivers

under the ADEA.

STATEMENT

1. The ADEA makes it unlawful, inter alia, for an

employer “to fail or refuse to hire or to discharge any

individual or otherwise discriminate against any indi-

vidual with respect to his compensation, terms, condi-

tions, or privileges of employment, because of such

individual’s age;” or “to limit, segregate, or classify

his employees in any way which would deprive or tend

to deprive any individual of employment opportunities

or otherwise adversely affect his status as an em-

ployee, because of such individual’s age.” 29 U.S.C.

623(a)(1) and (2).

In 1990 Co amended the ADEA by enacting

the Older Workers Benefit Protection Act (OWBPA),

Pub. L. No. 101-433, 104 Stat. 978. Title II of the

OWBPA (§ 201, 104 Stat. 983) added a new subsection

(f) to Section 7 of the ADEA, 29 U.S.C. 626(f), which

now provides, in relevant part, that “[aJn individual

may not waive any right or claim under [the ADEA]

unless the waiver is knowing and voluntary.” 29

U.S.C. 626(f)(1). Section 7(f)(1) further mandates that

“a waiver may not be considered knowing and volun-

tary unless at a minimum,” the following specific re-

quirements are met: the waiver must be part of an

agreement written in a manner calculated to be un-

derstood by the average individual (29 U.S. C.

626(f)(1)(A)); the waiver must “specifically refer{] to

rights or claims arising under [the ADEA]” (29

U.S.C. 626(f)(1)(B)); the waiver cannot cover rights or

claims that arise after the date the waiver is

executed (29 U.S.C. 626(f)(1)(C)); in exchange for the

waiver, the employee must receive consideration in

addition to that which he or she is already entitled (29

U.S.C. 626(f)(1)(D)); the employee must be advised in

writing to consult with an attorney before executing

the agreement (29 U.S.C. 626(f)(1)(E)); the employee

must be given 21 days within which to consider the

1

agreement (or 45 days if the waiver is in connection

with a termination program offered to a group of em-

ployees) (29 U.S.C. 626(f)(1)(F)(i) and (ii)); the agree-

ment must provide that the employee can revoke the

agreement within seven days after its execution and

that the agreement shall not become effective or en-

forceable until after that period (29 U.S.C. 626(f)(1)

(G)); and, if the waiver is in connection with a termi-

nation program offered to a group of employees, the

employer must (at the commencement of the 45-day

period required under 29 U.S. C. 626(f)(1)(F)) inform

the employee in writing of certain information about

all the persons covered by the program (including

their ages) (29 U.S.C. 626(f)(1)(H)(i) and (ii)).

Section 7(f)(2) of the ADEA (also added by the

OWBPA) specifies that the only exception to the Sec-

tion 7(f)(1) prerequisites for a knowing and voluntary

waiver of an ADEA claim is a waiver that is “in set-

tlement of a charge filed with the [EEOC], or an ac-

tion filed in court by the individual or the individual's

representative,” alleging age discrimination under

Sections 4 or 15 of the ADEA. 29 U.S.C. 626(f) (2). In

such instances, a waiver “may not be considered

knowing and voluntary unless at a minimum,” the

first five requirements of Section 7(f)(1) are met (i.e.,

29 U.S.C. 626(f)(1)(A) through (E)), and the employee

is given a reasonable period of time within which to

consider the settlement agreement. 29 U.S.C. 626(f)

(2)(A) and (B). In any dispute regarding whether the

statutory minimum requirements have been met, “the

party asserting the validity of a waiver shall have the

burden of proving in a court of competent jurisdiction

that a waiver was knowing and voluntary pursuant to

paragraph (1) or (2)” of Section 7(f). 29 U.S.C. 626(f)

(3).

2. a. Petitioner, Dolores Oubre, was employed by

respondent, Entergy Operations, Inc., from 1987 until

5

the beginning of 1995. Resp. C.A. Br. 6-8. In the

fall of 1994, respondent implemented a new employee

evaluation process that annually ranked its salaried

employees in one of nine groups. Br. in Opp. 2. On

January 17, 1995, petitioner’s supervisors notified her

that she had been ranked in the lowest group. J.A.

A18; Resp. C.A. Br. 7-8. They informed her that she

had the option either to resign and receive a

severance package, or to continue employment

pursuant to an action plan that would be developed for

her. Br. in Opp. 2. All employees ranked in the lowest

group were offered the same option. J. A. A17-A18.'

At the January 17 meeting, petitioner was provided

a letter that set forth the terms of the severance

package offered by respondent. J. A. A18; C. A. E.R. 1-

2. Attached to the letter was a release of claims peti-

tioner was required to sign in order to receive the

severance benefits. C.A. E.R. 4. Neither the letter

nor the release specifically referred to claims or

rights arising under the ADEA, as required under 29

U.S.C. 626(f)(1)(B).2 The letter notified petitioner

that she was required to sign the release and return

' Petitioner asserts (Pet. 2, 12) that respondent’s program

mandated that ten percent of its employees be ranked in the

lowest group. Petitioner also contends (Pet. 2-4) that persons

ranked in the lowest group were informed that if they were

ranked in the lowest group the following year as well, they

would be subject to termination without any severance pay.

And, petitioner alleges (Pet. 3-4) she was told by supervisors

that, although an action plan would be developed for her dur-

ing that following year, it would be virtually impossible for her

to move out of the lowest-ranked group even if she met all the

goals of the plan.

The release, nonetheless, purported to apply to all claims,

occurring on or before the date of the execution of the release

“which in any way relate to” petitioner’s “employment” with,

or “separation” from, respondent. C.A. E.R. 4.

6

it no later than February 1, 1995, or the severance

benefits would no longer be available to her. Id. at 2.

Thus, petitioner was not afforded the 45-day period in

which to consider the waiver, as required under 29

U.S.C. 626(f)(1)(F (ii), in connection with a group ter-

mination program (or even the 21-day period required

in connection with an individual employee termina-

tion, see 29 U.S.C. 626(f)(1)(F)(i)). Neither the letter

nor the release provided petitioner with information

about the other employees covered by the same em-

ployee termination program, as required under 29

U.S.C. 626(f)(1)(H). And neither the letter nor the re-

lease provided that petitioner could revoke the release

during the seven-day period following its execution or

that the agreement would not become effective or

enforceable until such period had expired, as required

under 29 U.S.C. 626(f)(1)(G).

On January 31, 1995, petitioner informed respon-

dent that she would accept the severance package, and

she signed the release. J.A. Al8. Respondent then

made the severance payments under the terms of the

agreement. J. A. A19.°

b. In September 1995 petitioner filed suit in the

United States District Court for the Eastern Dis-

trict of Louisiana, alleging that respondent construc-

tively discharged her on account of her age, in viola-

tion of the ADEA, 29 U.S.C. 621 et seq., and various

state laws. Pet. 2; Br. in Opp. 3. Respondent filed a

motion for summary judgment, contending that peti-

tioner had waived her right to bring an action under

the ADEA by virtue of having signed the release and

having failed to return the severance payments she

had received. J.A. Al; Pet. 5. Petitioner opposed the

3 Petitioner received one month of administrative leave,

then one month of base pay plus one week of pay for each year

of accredited service; the cash amount paid to her totalled

$6,258.62. Resp. C.A. Br. 10-11 & n.4.; Pet. 16; C.A. E.R. 1.

7

motion, contending that the release did not constitute

a knowing and voluntary waiver of her ADEA claim

because the release did not comply with the OWBPA

and because she was under economic duress at the

8 she accepted the severance package. Br. in Opp.

The district court entered summary judgment for

respondent. J.A. Al7-A21. The court found that it

was “undisputed that the release signed by [peti-

tioner] did not meet some of [the OWBPA’s] criteria,

including the requirements that specific reference to

ADEA rights be made, that a waiting period of at

least 45 days within which to consider the agreement

be given and that a seven day period following execu-

tion to revoke the agreement be provided.” J.A. A20

(citing 29 U.S.C. 626(f)(1)(B) and (F), and (G)). The

court noted, however, that the Fifth Circuit previ-

ously had held that “the failure to meet the require-

ments of subsections (A) through (H) of the OWPA

does not render the agreement void of legal effect

even though not ‘knowing and voluntary.’ Rather,

such waivers are only subject to being avoided at the

employee’s option.” /bid. (quoting in part Wamsley v.

Champlin Refining & Chemicals, Inc., 11 F.3d 534,

539 (5th Cir. 1993), cert. denied, 115 S. Ct. 1403 (1995)).

The court reasoned that, “[a]ecording to Wamsley,

where the employee chooses to retain and not tender

back the benefits paid in consideration for the agree-

ment, she manifests an intention to be bound by the

waiver and makes a new promise to abide by its

terms.” Ibid. (citing Wamsley, 11 F.3d at 540,

and Blakeney v. Lomas Info. Sys., Inc., 65 F.3d 482

(5th Cir. 1995), cert. denied, 116 S. Ct. 1042 (1996)).

Concluding that it was “not at liberty to disregard

the law announced by the Fifth Circuit,” the district

Pry dismissed petitioner’s complaint with prejudice.

id.

8

3. The court of appeals summarily affirmed. J.A.

A22-A23. Stating that it had reviewed the record and

the parties’ briefs and had found no reversible error,

the court of appeals affirmed “for the reasons

enunciated by the district court.” J.A. 23.

4. Petitioner then filed a petition for a writ of cer-

tiorari presenting three questions. On April 27, 1997,

the Court granted review limited to the third ques-

tion presented“ [whether the petitioner ratified an

otherwise invalid release by retaining compensation

paid and/or failing to tender back said sums received

pursuant to the terms of her separation of employ-

ment, thus making the release binding.” 117 S. Ct.

1466; Pet. i.

SUMMARY OF ARGUMENT

The court of appeals erred in ruling that an em-

ployee is barred from pursuing a claim under the Age

Discrimination in Employment Act (ADEA), 29

U.S.C. 621 et seq., by virtue of the fact that the em-

ployee retains severance payments made in conjunc-

tion with a release of claims that does not constitute a

knowing and voluntary waiver of ADEA claims under

the Older Workers Benefit Protection Act (OWBPA),

29 U.S.C. 626(f). Section 7(f)(1) of the ADEA, as

added by the OWBPA, unequivocally states (1) that an

individual “may not waive” any claim under the

ADEA unless the waiver is knowing and voluntary

and (2) that, in order to be considered knowing and

voluntary, a waiver of an ADEA claim must satisfy

detailed statutory prerequisites. There is no statu-

tory exception from the Section 7(f)(1) prerequisites

for cases in which a person retains severance pay-

ments made under a waiver that was not knowing and

voluntary.

The plain language and structure of the OWBPA

are clear on this point. The common law doctrine of

contractual ratification cannot be applied to override

9

the OWBPA’s explicit restriction on the waivability

of ADEA claims. The history and circumstances

surrounding enactment of the OWBPA also demon-

strate that Congress did not intend a ratification ex-

ception to the OWBPA’s waiver prerequisites.

An employee need not tender back severance pay-

ments he or she received in conjunction with a pur-

ported ADEA waiver prior to pursuing an action un-

der the ADEA. As this Court ruled with respect to

an analogous statute in Hogue v. Southern Ry., 390

U.S. 516 (1968), a tender back requirement would be

inconsistent with the purposes of the ADEA.

ARGUMENT

AN EMPLOYEE DOES NOT WAIVE A CLAIM UN-

DER THE ADEA BY EXECUTION OF A RELEASE

OF CLAIMS AND RETENTION OF SEVERANCE

PAYMENTS MADE THEREUNDER, IF THE RE-

LEASE DOES NOT CONFORM TO THE STATU-

TORY PREREQUISITES FOR A KNOWING AND

VOLUNTARY WAIVER OF ADEA CLAIMS UNDER

THE OWBPA

There is no question that the release drafted by re-

spondent and signed by petitioner did not include cer-

tain terms that are mandated by Section 7 of the

ADEA, 29 U.S.C. 626, as added by the OWBPA, to

support a knowing and voluntary waiver of claims un-

der the ADEA. See pp. 3-4, 7, supra.’ It is clear from

the statutory text, structure, and history of the

OWBPA, and from this Court’s precedents, that a

There is a dispute, however, regarding whether the re-

lease met certain other of the statutory prerequisites, e.g.,

whether petitioner received consideration to which she was not

already entitled. See Pet. 16-17, 19, 23-24; Br. in Opp. 13-14.

The courts below did not resolve that issue, and this Court lim-

ited its grant of review to the ratification issue.

10

release that does not meet the requirements of the

OWBPA does not constitute a knowing and voluntary

waiver of ADEA claims. An employee can pursue an

ADEA action in such circumstances, regardless of

the retention of severance benefits.

A. The Text and Structure of the OWBPA Estab-

lish That, Absent a Waiver That Meets the

OWBPA’s Prerequisites, Waiver of a Right or

Claim Under the ADEA Cannot Occur

1. Section 7(f)(1) of the ADEA, as added by the

OWBPA, unequivocally states that an individual

“may not waive any right or claim under [the ADEA]

unless the waiver is knowing and voluntary.” 29

U.S.C. 626(f)(1). Section 7(f) does not leave the term

“knowing and voluntary” undefined. It specifically

prohibits a waiver from being considered “knowing

and voluntary” unless, “at a minimum,” the require-

ments listed in Section 7(f)(1)(A) through (H) are met.

The unassailable corollary is that an individual may

not waive any claim or right under the ADEA unless

the requirements listed in Sections 7(f)(1)(A) through

(H) are met.

Under the approach adopted by the courts below,

however, employees waive their rights and claims un-

der the ADEA, even absent satisfaction of the statu-

tory requirements, if the employees retain severance

payments. The OWBPA, however, permits no such

exception to the “knowing and voluntary” waiver pre-

requisites imposed under Section 7(f)(1).’ The lan-

guage and structure of the OWBPA “plainly re-

5 The only exception to Section 7(f)(1)—set forth in

Section 7(f)(2)—applies to cases that involve settlement of a

charge that already has been filed with the EEOC or of a case

that already has been filed in court (and even then the excep-

tion only modifies slightly the prerequisites for a knowing and

voluntary waiver). That exception is inapplicable here.

11

strietl] an employee’s freedom to waive his rights or

claims under the ADEA.” Oberg v. Allied Van Lines,

Inc., 11 F.3d 679, 683 (7th Cir. 1993), cert. denied, 511

U.S. 1108 (1994). [Alfter grappling with the question

of whether to permit ADEA waivers at all,” Congress

enacted the OWBPA prerequisites and stated

“unequivocally that unless the enumerated require-

ments are met, an individual ‘may not waive’ ADEA

rights.” Long v. Sears Roebuck & Co., 105 F.3d 1529,

1539 (3d Cir. 1997).

The fact that Congress created only a single excep-

tion to the Section 7(f)(1) prerequisites, i. e., for cases

pending before the EEOC or in court (29 U.S.C.

626(f)(2)), further reinforces the OWBPA’s mandate.

Structuring the statute first to list the threshold re-

quirements for a valid ADEA waiver, followed by a

single exception, demonstrates that Congress did not

intend any other exceptions.

2. Disregard for the OWBPA’s clear mandate

that an individual “may not waive” an ADEA claim

absent a knowing and voluntary waiver—has been ra-

tionalized by the Fifth Circuit under the common law

doctrine of contract ratification. The courts below

followed Fifth Circuit authority that enactment of

the OWBPA in 1990 did not disturb earlier precedent

that an employee’s retention of severance benefits

ratifies an ADEA release. J.A. A20 (citing Wamsley

v. Champlin Refining & Chemicals, Inc., 11 F.3d 534,

536, 540-542 (5th Cir. 1993), cert. denied, 115 S. Ct.

1403 (1995) (applying Grillet v. Sears, Roebuck & Co.,

927 F. 2d 217, 220 (5th Cir. 1991))). In Wamsley, the

Fifth Circuit reasoned that: the common law doctrine

of contractual ratification of voidable contracts ap-

plies to ADEA waivers notwithstanding enactment of

the OWBPA; a release that does not constitute a

knowing and voluntary waiver under the OWBPA is

not void, but is merely voidable; an employee’s reten-

12

tion of severance payments constitutes a choice not to

avoid an invalid release and thereby serves as a ratifi-

cation which is a new promise not subject to the

waiver requirements of the OWBPA; and applying the

common law doctrine of tender back to preclude an

ADEA suit unless an employee returns all severance

payments is consistent with the purposes of the

ADEA. Id. at 538-542; see also Blakeney v. Lomas

Info. Sys., Inc., 65 F.3d 482, 484-485 (5th Cir. 1995),

cert. denied, 116 S. Ct. 1042 (1996); Wittorf v. Shell Oil

Co., 37 F.3d 1151, 1154 (5th Cir. 1994).°

a. The conclusion that an individual may waive

ADEA claims through ratification of an invalid

waiver flies in the face of the OWBPA’s mandate that

an individual “may not waive” any ADEA claim un-

less pursuant to a knowing and voluntary waiver. Re-

gardless of the applicability of the ratification doc-

trine to ADEA releases in pre-OWBPA cases, “the

enactment of the OWBPA changed the legal landscape

with respect to the release of ADEA claims. In light

of the (OWBPA], * the ratification doctrine does

6 The Fourth Circuit also has applied the contractual rati-

fication theory underlying its pre-OWBPA precedent to an

ADEA case that postdates the OWBPA. Blistein v. St. John’s

College, 74 F.3d 1459, 1465 (4th Cir. 1996) (applying O'Shea v.

Commercial Credit Corp., 930 F. 2d 358 (4th Cir.), cert. denied,

502 U.S. 859 (1991)). In Blistein, the Fourth Circuit explained

that, prior to enactment of the OWBPA, the circuits were split

“over how to determine whether an ADEA claim had been val-

idly released”—“(sJeveral circuits had adopted a federal com-

mon law ‘totality of the circumstances’ test,” while other

courts, including the Fourth Circuit in O'Shea, “had resorted

to ordinary state law contract principles in resolving the ques-

tion,” and it concluded that the OWBPA codified the totality-

of-circumstances test. 74 F.3d at 1465. The Third Circuit has

recognized—correctly, in our view—that the OWBPA sup-

plants both of the pre-OWBPA tests. Long, 105 F.3d at 1538 &

nn. 14, 15.

13

not apply to ADEA releases which fail to comply with

the OWBPA.” Long, 105 F.3d at 1534.

In addition to the plain language of the OWBPA’s

prohibition on noncomplying waivers, the overall

structure of the OWBPA makes clear that application

of the common law ratification doctrine to ADEA re-

leases would conflict with that scheme. The prereq-

uisites enacted go well beyond common law principles

and require a higher threshold of protection for

waivers of ADEA claims. As a structural matter, the

OWBPA alters the manner of enforcing an ADEA

waiver. Whereas under common law an employee

challenging a waiver bore the burden of establishing

that a waiver was not knowing and voluntary, the

OWBPA imposes on the party asserting the validity

of the waiver the burden of proving that the waiver is

knowing and voluntary. See Long, 105 F.3d at 1539

(citing 29 U.S.C. 626(f)(3)). That approach evidences

an intent on the part of Congress to place the risk of

nonpersuasion on an employer who is seeking to en-

force a waiver, in contrast to ratification which holds

an employee to an obligation that an employer could

not have enforced.

The specific OWBPA prerequisites to a knowing

and voluntary waiver also reflect a displacement of

the ratification doctrine. That doctrine simply “is

logically inconsistent with the specific terms of the

OWBPA.” Long, 105 F.3d at 1539 n.17. “To conclude

otherwise would be to say that Congress only in-

tended that the OWBPA requirements apply to the

‘first’ waiver.” Jd. at 1539-1540. Indeed, permitting

common law ratification would permit an employer to

do an end run around the entire statutory scheme.

Thus, the common law doctrine of ratification sim-

ply cannot be invoked in disregard of the detailed

statutory framework of the OWBPA. Common law

principles are “not to be applied in defiance of a stat-

14

ute’s overriding purposes and logic.” United States v.

Locke, 471 U.S. 84, 98 (1985). Here, application of the

common law ratification doctrine is precluded because

it would be incompatible with the statutory scheme of

the OWBPA. See Astoria Federal Sav. & Loan

Ass’n v. Solimino, 501 U.S. 104 (1991) (refusing to ap-

ply common law doctrine of collateral estoppel to

state administrative findings in ADEA case inconsis-

tent with congressional intent underlying ADEA).

b. Permitting application of the ratification doc-

trine to ADEA waivers that do not comply with the

OWBPA also is inappropriate because noncomplying

waivers are void, not merely voidable. “The propriety

of calling a transaction a voidable contract rests pri-

marily on the traditional view that the transaction

is valid and has its usual legal consequences until

the power of avoidance is exercised.” Restatement

(Second) of Contracts § 7, emt. e (1981). The OWBPA

states, however, that an ADEA waiver “shall not be-

come effective or enforceable until” after expiration

of the seven-day revocation period following execution

of the agreement. 29 U.S.C. 626(f)(1)(G). Thus, an

ADEA waiver that does not comply with the OWBPA

is not valid and does not have “its usual legal conse-

quences” that a party must choose to avoid. In order

to have any legal consequences, an ADEA waiver

must meet the OWBPA prerequisites, including sur-

viving a seven-day period during which the employee

is afforded the right to revoke it. Absent such cir-

cumstances, any purported release of ADEA claims is

without legal effect. See Oberg, 11 F.3d at 685 (ADEA

waiver that does not meet OWBPA prerequisites 1s

“dead by force of law“). As such, ratification cannot

7 The Third Circuit has reasoned that whether noncomply-

ing ADEA waivers are void or voidable is not relevant because,

under either characterization, a court still must decide

whether an employee’s retention of severance benefits should

15

occur because “[vjoid promises are not legally binding

and thus, are not contracts.” Wamsley, 11 F.3d at 539

(citing Restatement (Second) of Contracts § 7, cmt. a

(1981)).*

Moreover, it is far from clear that an employee like

petitioner has a “power of avoidance.” See Restate-

ment (Second) of Contracts § 7 (1981) (in order to

constitute voidable contract subject to ratification,

party must have power to avoid legal relations created

by contract). The Fifth Circuit’s assertion that a

noncomplying ADEA waiver is “subject to being

avoided at the election of the employee,” Wamsley, 11

F.3d at 539, cannot be reconciled with the OWBPA’s

plain statement that “[aJn individual may not waive

any right or claim under [the ADEA)” unless the

waiver complies with the OWBPA’s prerequisites. 29

U.S.C. 626(f)(1) (emphasis added). The OWBPA sim-

ply does not permit an employee to elect whether to

avoid an ADEA waiver that does not comply with the

OWBPA.“

bar his or her ADEA claim or whether tender back is required.

Long, 105 F.3d at 1537. District courts have taken differing

approaches, but a majority of those outside of the Fourth, Fifth

and Seventh Circuits have adopted the Oberg analysis. Id. at

1536 n.12 (citing cases).

8 Contrary to the Fifth Circuit’s assertion (see Wamsley, 11

F.3d at 539 n.8), Congress’ failure to use the term “void” is of

no consequence. Providing that an agreement is not effective

or enforceable renders the agreement void. And waiver

agreements may be deemed void where the relevant statute

does not label such agreements “void.” Brooklyn Savs. Bank

v. O’Neil, 324 U.S. 697, 710-713 (1945) (absence of statutory lan-

guage prohibiting waiver of rights under Fair Labor Standards

Act does not preclude finding that such waivers are “void as

contrary to public policy”).

The Fifth Circuit has suggested that, if noncompliance

with the provisions of Section 7(f)(1) renders an ADEA release

16

c. Inany event, even if an ADEA waiver that does

not comply with the OWBPA could be characterized

as merely “voidable,” and even if the applicability of

the ratification doctrine to ADEA waivers survived

enactment of the OWBPA, the Fifth Circuit’s ap-

proach would still be unsound. There is no support

for its conclusion that ADEA claims can be waived

through ratification that does not comply with the

OWBPA. The Fifth Circuit merely declared, without

citation, that an employee’s ratification constitutes a

new promise and als a new promise that creates a

new obligation, it is not subject to the waiver re-

quirements of § 626, and thus, such requirements

void, there would be no need for Section 7(f)(1)(G) of the

ADEA, 29 U.S.C. 626(f)(1)(G). See Wamsley, 11 F.3d at 539.

The Fifth Circuit misreads Section 7(f)(1)(G). As explained

above, Section 7(f)(1)(G) requires that an ADEA waiver pro-

vide the employee with a seven-day period in which he or she is

entitled to revoke the agreement, and it provides that the re-

lease does not become effective or enforceable until after expi-

ration of that revocation period. Contrary to the premise un-

derlying the Fifth Circuit’s interpretation, Section 7(f)(1)(G)

does not serve as a safeguard against releases that do not com-

ply with the other provisions of Section 7(f)(1). Section

7(f1G) does not apply to such noncomplying releases. It

does not grant an employee the authority to void a non-comply-

ing release because such noncomplying releases already are

void. Rather, Section 7(f)(1)(G) applies to agreements that are

in compliance with all the OWBPA prerequisites and that oth-

erwise meet the statutory threshold for knowing and voluntary

ADEA waivers. It permits the employee a short period within

which to revoke such an agreement prior to its effective date,

for any reason or for no reason, e. g., an employee may change

his or her mind based on the other employees who execute the

agreement, or he may simply suffer from signer’s remorse,

quickly changing his mind about the wisdom of the release af-

ter he signs it. See Soliman v. Digital Equip. Corp., 869 F.

Supp. 65, 69 n.14 (D. Mass. 1994).

17

pose no bar to its enforcement.” Wamsley, 11 F.3d at

540 n.11.

The Fifth Circuit has acknowledged, however, that

“if the same grounds for avoidance exist when the

new promise is made, the party again enjoys the

power to avoid performance under the new promise.”

Wamsley, 11 F.3d at 539 n.7. It cites the Restate-

ment’s discussion of the common law doctrine that,

under the ratification doctrine, the “new promise may

itself be voidable for the same reason as the original

promise, or it may be voidable or unenforceable for

some other reason.” See Restatement (Second) of

Contracts § 85 emt. b (1981). The Restatement goes

on to explain, by way of example, that some States re-

quire that in order for a new promise of a former in-

fant to constitute ratification of a promise that was

otherwise voidable because entered into while the

person was still an infant, the new promise must be in

writing and signed. Ibid. Similarly, the OWBPA’s

dictate that an individual “may not waive” an ADEA

claim unless the OWBPA“'s prerequisites are met, ap-

plies whether the purported waiver is accomplished

by signing a release, or by ratification. Thus, any

new promise made through ratification is also subject

to the OWBPA.

B. The History Surrounding Enactment of the

OWBPA Demonstrates That Congress Did Not

Intend Any Ratification Exception To the

OWBPA's Waiver Prerequisites

The intent reflected in the OWBPA’s clear lan-

guage, mandating compliance with the statutory pre-

requisites and not admitting of exceptions therefrom

for ratification, is evident from the legislative record.

1. The Senate Report makes clear that a waiver

that does not meet the OWBPA’s prerequisites is

void, of no legal effect. Thus, the OWBPA “provides

for the first time by statute that waivers not super-

18

vised by the EEOC may be valid and enforceable if

they meet certain threshold requirements and are

otherwise shown to be knowing and voluntary.” S.

Rep. No. 263, 101st Cong. 2d Sess. 31 (1990) (S. Rep.

No. 263) (emphasis added). The Senate Report

stresses that all statutory prerequisites must be met,

regardless of other “knowing and voluntary” consid-

erations. Jd. at 32. Moreover, it specifies that, be-

cause permitting ADEA waivers that were not super-

vised by the EEOC was a substantial change from

past law, the Senate Committee intended “that the

requirements * * * be strictly interpreted to protect

those individuals covered by the Act.” Id. at 31.

(emphasis added).“

2. The intent to protect older workers and to en-

sure that their ADEA claims were not subject to

waiver, absent compliance with the statutory prereq-

uisites, could not be clearer from the legislative rec-

ord. The Senate Report unequivocally states that the

OWBPA was intended to “ensure[] that older workers

are not coerced or manipulated into waiving their

rights to seek legal relief under the ADEA.” S. Rep.

No. 263 at 5. It specified that the statutory prerequi-

sites to a valid ADEA waiver were included “with the

intent of according basic due process protections to

employees who are asked to execute waivers.” Id. at

© The legislative record demonstrates that Congress in-

tended the OWBPA to “limit waivers to certain situations and

then spellled] out clear and ascertainable standards to govern

those situations.“ H.R. Rep. No. 664, 101st Cong., 2d Sess. 27

(1990). That approach was intended to “clarify an unsettled

area of the law” and eliminate the litigation that had arisen

regarding ADEA releases based on the many different factors

and criteria applied in the former case-by-case approaches

under the totality-of- the- eireumstances test and the state-

contract-law test. /bid; see also S. Rep. No. 79, 101st Cong., Ist

Sess. 17 (1989); see note 6, supra.

19

32. The circumstances surrounding the enactment of

the OWBPA reveal that there was no intent to permit

disregard for the restrictions on ADEA waivers

through ratification of waivers that failed to afford

employees the statutory protections. The OWBPA

was enacted against a backdrop that disfavored any

waivers of ADEA claims and that led to authorization

for certain waivers only because of the statutory pro-

tections created.

Prior to enactment of the OWBPA, the EEOC had

promulgated a regulation that permitted waivers of

ADEA claims without supervision by the EEOC so

long as the waivers were “knowing and voluntary.”

52 Fed. Reg. 32,293 (1987); 29 C. F. R. 1627.16(c) (1987).

The regulation identified factors relevant to the de-

termination whether a waiver is “knowing and volun-

tary,” but the only mandatory requirements were

that it not apply to prospective rights or claims and

that it not be in consideration for benefits to which

the employee was already entitled. Jbid."

Almost immediately thereafter, Congress ex-

pressed concern about permitting any waivers of

ADEA claims and suggested that the EEOC’s “rule

was without legal foundation and contrary to public

policy.” H.R. Rep. No. 664, 101st Cong., 2d Sess. 20

(1990) (H.R. Rep. No. 664). Congress suspended op-

eration of the EEOC regulation for fiscal year 1988

and the following two years. See 133 Cong. Rec.

H12,392 (daily ed. Dec. 21, 1987); 134 Cong. Rec. H8297

(daily ed. Sept. 26, 1988); 135 Cong. Rec. H7618 (daily

ed. Oct. 26, 1989). Notwithstanding Congress’s sus-

pension of the regulation, however, some lower courts

The OWBPA ultimately rendered the EEOC’s rule,

permitting unsupervised waivers without the protections of the

OWBPA, of no force or effect. Pub. L. No. 101-433, § 202(b),

104 Stat. 984 (1990).

20

ruled that releases were permitted under the ADEA

in certain circumstances. H.R. Rep. No. 664 at 21-22.

In 1990, a legislative proposal in the House of Rep-

resentatives was introduced, similar to one intro-

duced the preceding year, that would have permitted

ADEA waivers, but only where the employee already

had made a claim under the ADEA—and therefore

was fully aware of the rights he or she was waiving.

See H.R. Rep. No. 664 at 5, 7, 49-50. Even in such in-

stances, a waiver would have been recognized only if

it had been knowing and voluntary and had met cer-

tain prerequisites similar to those currently con-

tained in the OWBPA. Id. at 5. The House proposal

would have prohibited altogether waivers of ADEA

claims as part of individual early retirement or early

group incentive programs, such as the separation

program at issue in this case. Id. at 7, 52-54. The

House Report explained that older workers can be un-

fairly forced to waive their ADEA rights, especially

in “large-scale terminations and layoffs, where an in-

dividual employee would not reasonably be expected to

know or suspect that age may have played a role in

the employer’s decision, or that the program may be

designed to remove older workers from the labor

force.” Id. at 22-23.

That House bill eventually gave way to a Senate bill

passed later that year. 136 Cong. Rec. $13,611 (daily

ed. Sept. 24, 1990); 136 Cong. Rec. H8738 (daily ed. Oct.

3, 1990). The Senate bill permitted ADEA waivers in

circumstances not supervised by the EEOC or courts,

but the Senate Report emphasizes that, inſlieu of su-

pervision, the significant statutory requirements

must be met. See S. Rep. No. 263 at 31.

2 Although the Senate bill was amended in certain limited

respects subsequent to the completion of the Senate Report

(see, e.g. 136 Cong. Rec. $13,607 (daily ed. Sept. 24, 1990)), the

provisions relevant in the instant case were not altered.

21

The Senate bill also permitted waivers in conjunc-

tion with early retirement or early group incentive

programs, such as the program at issue in this case.

It imposed additional requirements in such circum-

stances, however, regarding the information that

must be provided by the employer to support a valid

waiver. S. Rep. No. 263 at 6. The Senate Report

notes the special issues that arise in the context of

group termination and reduction programs, and em-

phasizes that, in such instances, “the need for ade-

quate information and access to advice before waivers

are signed is especially acute.” Id. at 32. As opposed

to individual separation agreements, the terms of

group programs generally are not subject to negotia-

tion between the parties and the affected employees

who are unlikely to have a reason to suspect that the

action is based on their individual characteristics.

Ibid. The Senate Report explains that

[t]he principal difficulty encountered by older

workers in these circumstances is their inability

to determine whether the program gives rise to a

valid claim under the ADEA. In many circum-

stances, an older worker will have no information

at all regarding the scope of the program or its

eligibility criteria. The informational require-

ments set forth in the bill are designed to give all

eligible employees a better picture of these factors.

Id. at 34.

Application of the ratification doctrine to ADEA

waivers that do not comport with the OWBPA’s

statutory prerequisites would contravene this in-

tended congressional design. An employee who signs

a purported ADEA waiver that does not afford him the

protections intended by Congress under the OWBPA

would, nonetheless, be bound by that otherwise invalid

waiver if the employee decided to keep the severance

benefits paid to him. But the fact that an employee,

22

such as petitioner, retains benefits paid as part of a

group termination program, does not establish that

the employee has obtained any of the information

about the other employees covered by the program as

mandated by the OWBPA or that any other protec-

tions of the OWBPA have been afforded the employee.

3. The legislative history of the OWBPA contains

no reference to the doctrine of contractual ratifica-

tion or to case law that invokes that doctrine. Long,

105 F.3d at 1539 n.17. Apparently, at the time the

OWBPA was enacted, no court of appeals had held

that an ADEA waiver that was not knowing and vol-

untary could be ratified through the retention of sev-

erance benefits.” Moreover, the caselaw relating to

Ry the time of the enactment of the OWBPA, three re-

ported district courts had discussed the ratification theory in

the context of a purported waiver of ADEA rights, although in

each instance the court relied on that approach as an alterna-

tive theory. See Constant v. Continental Tel. Co., 745 F. Supp.

1374 (C.D. III. 1990); O’Shea v. Commercial Credit Corp.,, 734 F.

Supp. 218 (D. Md. 1990), aff'd, 930 F.2d 358 (4th Cir.), cert.

denied, 502 U.S. 859 (1991); Widener v. Arco Oil & Gas Co., 717

F. Supp. 1211 (N.D. Tex. 1989). The determinations by the

Fourth and Fifth Circuits that retention of severance benefits

ratifies an ADEA waiver that is not otherwise knowing and

voluntary, postdated enactment of the OWBPA, although both

determinations were initially announced in cases to which the

OWBPA did not apply because the release predated its enact-

ment. See O’Shea v. Commercial Credit Corp., 930 F.2d 358

(4th Cir.), cert. denied, 502 U.S. 859 (1991); Grillet v. Sears,

Roebuck & Co., 927 F.2d 217 (5th Cir. 1991). The Eleventh

Circuit also addressed the issue in an opinion that followed en-

actment of the OWBPA and which did not apply the OWBPA

because the release predated its enactment, but it reached a

result contrary to the Fourth and Fifth Circuit, disagreeing

with the ratification analysis of O’Shea and Grillet. Forbus v.

Sears Roebuck & Co., 958 F.2d 1036, 1040-1041 (11th Cir.), cert.

denied, 506 U.S. 955 (1992).

23

ADEA waivers that was discussed did not involve any

application of the ratification doctrine. See, e.g., H.R.

Rep. No. 664 at 26-27 (citing cases).

Congress did, however, consider the issue of an em-

ployee’s simultaneous retention of severance benefits

and pursuit of an ADEA claim. At least one corpora-

tion raised the concern that it would have to bear the

high costs of litigating ADEA claims even where it

had paid significant consideration for releases as part

of a departure program. See H.R. Rep. No. 664 at 87

(dissenting views); see also S. Rep. No. 263 at 64

(minority views). Thus, it was understood that the

OWBPA would permit an employee who signed an in-

valid waiver to pursue his or her ADEA claim while

retaining the separation benefits paid under the

waiver. See Long, 105 F.3d at 1540 n.19. At one point

a substitute was proposed in committee, apparently in

response to that concern. The substitute would have

required that, if a waiver “is set aside for any reason,

any damages received through a discrimination action

shall be offset by the consideration received for the

waiver,” but it was not adopted by the committee.

H.R. Rep. No. 664 at 91 (emphasis added); see also id.,

at 23-30. There was no suggestion that the waiver

would have been ratified by the employee’s retention

of the consideration already received.

C. The Court’s Decision in Hogue Requires Rejec-

tion of the Tender Back Doctrine Under the

ADEA

The Fifth Circuit has suggested that, even if the

ratification doctrine would not bar an ADEA suit

such as petitioner’s, the suit is barred because peti-

tioner did not tender back the severance payments

she had received in conjunction with the invalid

ADEA waiver before she pursued her suit under the

ADEA. See Wamsley, 11 F.3d at 540-542. That ap-

proach is inconsistent with this Court’s opinion in

24

Hogue v. Southern Ry., 390 U.S. 516 (1968) (per cu-

riam).

In Hogue, the Court held that an injured employee

was not required to tender back the consideration he

had received from his employer in exchange for a re-

lease of claims before the employee could bring suit

under the Federal Employer’s Liability Act (FELA),

45 U.S.C. 51 et seg. As a threshold matter, the Court

made clear that federal law, not state common law

principles, controlled the issue. 390 U.S. at 517. The

Court concluded that requiring a tender back as a

prerequisite to suit under the FELA would be

“wholly incongruous with the general policy of the

Act,” i. e., to provide injured employees a right to re-

cover for injuries negligently inflieted by their em-

ployer. Id. at 518. The Court ruled, however, that the

sum already paid by the employer and retained by the

employee must be deducted from the recovery (if any)

obtained through a FELA lawsuit. [bid.

The Hogue rationale applies with full force to cases

under the ADEA. Long, 105 F.3d at 1541-1544. Like

the FELA, the ADEA is a federal remedial statute

designed to compensate employees for injuries caused

by their employers’ conduct and to deter employers

from engaging in such conduct. See McKennon v.

Nashville Banner Publishing Co., 513 U.S. 352, 357-

358 (1995) (“[t]he private litigant who seeks redress

for his or her injuries vindicates both the deterrence

and the compensation objectives of the ADEA”). And,

like imposition of a tender back requirement under

the FELA, imposition of such a requirement under

the ADEA would compromise the statute’s underly-

ing purposes of compensating victims and deterring

employers. A tender back requirement would enable

an employer to escape sanction for age discrimination

when a terminated employee lacks the resources to

tender back his severance benefits prior to filing

25

suit—a situation not unlikely in the group intended to

be protected by the OWBPA. See H.R. Rep. No. 664 at

23. Few individuals suddenly deprived of their job and

their income would be able to tender back large sever-

ance payments:

Forcing older employees to tender back their sev-

erance benefits in order to attempt to regain their

jobs would have a crippling effect [sic] on the

ability of such employees to challenge releases

obtained by misrepresentation or duress. Such a

rule would . . . encourage egregious behavior on the

part of employers in forcing certain employees into

early retirement for the economic benefit of the

company. The ADEA was specifically designed to

prevent such conduct * * *.

Long, 105 F.3d at 1541-1542 (quoting Forbus v. Sears

Roebuck & Co., 958 F.2d 1036, 1041 (11th Cir.), cert.

denied, 506 U.S. 955 (1992). And employees who do not

receive the information required under the OWBPA

by the time of the tender decision “would be no better

off than before the OWBPA was enacted; they could be

forced to make critical decisions [whether to

surrender severance pay or waive all claims under the

ADEA] without information deemed essential by

Congress.” Id. at 1542. A tender back requirement

would render the OWBPA a nullity by “encourag{ing]

ae to ignore the specific provisions of the Act

in hopes that by the time their former employees

discover that the releases that they signed are

voidable, they will be in no economic position to

tender back or refuse to accept the special severance

benefits accorded them.” Oberg v. Allied Van Lines,

Inc., 59 Fair Empl. Prac. Cas. (BNA) 769, 773 (N.D.

Ill. 1992), aff'd, 11 F.3d 679 (7th Cir. 1993), cert. denied,

26

511 U.S. 1108 (1994); Isaacs v. Caterpillar, Inc., 765 F.

Supp. 1359, 1367 (C.D. Ill. 1991).

The fact that the ADEA and its purposes are not

identical to the FELA and its purposes does not pre-

clude application of the Hogue rationale to ADEA

cases:

The mandate of Hogue is that tender back re-

quirements imposed in connection with the release

of federal rights be evaluated in light of the general

policy of the statute in question. That the ADEA

as amended by the OWBPA serves a purpose

distinct from that underlying the FELA does not

change the fact that a tender back requirement is

“wholly incongruous” with the general policies of

the ADEA and the OWBPA. In enacting the

OWBPA, Congress specifically regulated ADEA

releases in order to provide employees with

protection not available at common law. To strip

them of this protection through application of the

common law principle of tender back would be

anomalous indeed.

Long, 105 F.3d at 1541 n.22; but see Wamsley, 11 F.3d

at 542. In Fleming v. United States Postal Serv.

AMF O Hare, 27 F.3d 259 (7th Cir. 1994), cert. denied,

513 U.S. 1085 (1995), Judge Posner explained that, al-

4 Respondent’s contention (Br. in Opp. 12) that failure to

apply the tender back doctrine in ADEA cases would deter

employers from offering severance benefits misconstrues the

purposes and effect of the OWBPA. The OWBPA’s purpose

was to serve as an incentive to an employer to comply with its

requirement of a knowing and voluntary waiver, including the

OWBPA’'s statutory prerequisites, when the employer obtains

waiver of ADEA claims from their employees. Compliance

with the OWBPA's requirements (which an employer has the

ability to control through the manner in which it drafts re-

leases and offers severance programs) provides an employer

with a defense to a suit alleging violation of the ADEA.

27

though tender ack generally would be a precondition

to rescission of a contract, “[wJhen federal law limits

a class of releases, as in cases under the Federal Em-

ployers’ Liability Act, or the closely parallel Jones

Act, or the Age Discrimination in Employment Act,

each of which regulates releases, * * * the common

law rule requiring tender * * * may have to give

way.” Id. at 261.” Moreover, although the Fleming

court questioned the breadth of the rule precluding

tender back under any federal law limiting releases, it

emphasized that “/o/f course a worker who has exe-

cuted a void release should not be barred from chal-

lenging it by his inability to tender back the consid-

eration received, as the effect would be to make the

release enforceable as a practical matter.” Ibid.

(emphasis added).”

® The Fleming court declined to exempt Title VII from a

tender back requirement because, in its view, Hogue cannot “be

detached fre. its context, that of a federal statute that regu-

lates releases, displacing common law rules.” 27 F.3d at 261-

262. By so ruling, the court expressly disagreed with Botefur

v. City of Eagle Point, 7 F.3d 152, 155-156 (9th Cir. 1993). That

disagreement is of no consequence in the instant case, however,

because the OWBPA is “precisely such a statute” that regulates

releases, displacing common law rules. Long, 105 F.3d at 1540

n.20.

The Fifth Circuit's concern (Wamsley, 11 F.3d at 539

n.9) that, absent a tender back requirement, employees will

finance their lawsuits against employers with funds provided

by the employers, ignores the nature of the statute at issue.

The class of employees protected by the OWBPA is one of the

groups least likely to have the luxury of expending the funds

received (usually severance benefits) on litigation expenses

rather than living expenses because of the unlikelihood of their

finding new employment and the possibility that they may not

yet be entitled to Social Security or other retirement benefits.

See H.R. Rep. No. 664 at 23; see also Long, 105 F.3d at 1543.

And, of course, any employees “with baseless claims have

28

The Third and Seventh Circuit both have expressly

held that “analogizing the policy of [the] ADEA to

that of [the] FELA, and thus applying Hogue, is cor-

rect.” Oberg, 11 F.3d at 684; Long, 105 F.3d at 1541-

1542; see also Forbus, 958 F.2d at 1040-1041 (applying

Hogue in context of invalid ADEA release that pre-

dated OWBPA); Isaacs v. Caterpillar, Inc., 765 F.

Supp. at 1367." Indeed, courts regularly have ex-

tended the reasoning of Hogue outside the context of

FELA, including to statutes that are not as analo-

gous to FELA as is the ADEA. See Smith v. Pinell,

597 F.2d 994, 996 (5th Cir. 1979) (Jones Act, 46 U.S.C.

688); Botefur v. City of Eagle Point, 7 F.3d 152, 156

(9th Cir. 1993) (42 U.S.C. 1983; noting that Hogue “is

generalizable to suits under other federal compensa-

tory statutes”); Wahsner v. American Motors Sales

Corp., 597 F. Supp. 991, 998 (E.D. Pa. 1984) (Auto-

mobile Dealers’ Day in Court Act, 15 U.S.C. 1221 et

seq.; emphasizing that benefits under federal statute

may not be denied by state common law rules, and

strong financial incentives to keep severance payments rather

than risk them in prolonged litigation.” Ibid. Further, re-

spondent itself states that it is “undisputed that the overwhelm-

ing majority of plaintiffs enter into contingent fee arrange-

ments with their lawyers, whereby the costs of litigation are

taken from the ultimate recovery.” Br. in Opp. 12. Attorney’s

fees are available as part of the award in an ADEA suit.

McKennon, 513 U.S. at 357.

7 A panel of the Sixth Circuit also has considered the ques-

tion of tender back, albeit apart from the issue of ratification

(which was not yet ripe due to the remand of the question

whether the release complied with the OWBPA). Raczak v.

Ameritech Corp., 103 F.3d 1257 (1997). The majority of that

panel held that the employees were not required to tender back

the consideration they had received as a precondition to main-

taining their suit under the ADEA. Id. at 1268-1270 (opinion of

Jones, J.); Id. at 1071 (opinion of Guy, J.).

29

ruling that plaintiffs did not ratify their rele

failure to tender back); Home 3 Office, 3 7

Spectrum Elecs., Inc., 100 F.R.D. 379, 382 n.1 (E. D.

Pa. 1983) (communications laws); Turin v. Food Fair

Stores, Inc., 197 F. Supp. 827, 830-831 (E.D. Pa. 1961)

(antitrust law); see also Long, 105 F.3d at 1541 n.21

(citing cases).

As in Hogue, severance benefits retained by the

employee may be offset against any recovery in the

ADEA suit. See Hogue, 390 U.S. at 518. The ADEA

gives federal courts “the discretion to ‘grant such le-

gal or equitable relief as may be appropriate to effec-

tuate the purposes of [the Act].“ McKennon, 513

US. at 357-358. It may be appropriate for a court to

offset initial benefits paid to a particular employee

against the ADEA award to that individual to the ex-

tent the two are duplicative, so long as the relief ul-

timately granted effectuates the purposes of the

— See Long, 105 F.3d at 1543; Oberg, 11 F.3d at

30

CONCLUSION

The judgment of the court of appeals should be

reversed and the case remanded for further proceed-

ings.

Respectfully submitted.

WALTER DELLINGER

Acting Solicitor General

GREGORY C. STEWART SETH P. WAXMAN

General Counsel Deputy Solicitor General

J. RAY TERRY, JR. BETH S. BRINKMANN

Deputy General Counsel Assistant to the Solicitor

GWENDOLYN YOUNG REAMS General

Associate General Counsel

CAROLYN L. WHEELER

Assistant General Counsel

PAUL BOGAS

Attorney

Equal Employment

Opportunity Commission

JUNE 1997