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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1998
- **Citation:** 522 U.S. 422

## Text

Supreme Court, U.S.
FIEFLED

JUN 20 1997
DREIGE OF THE CLERK

No. 96-1291

IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1996

DOLORES M. OUBRE,
Petitioner,
v.

ENTERGY OPERATIONS, INC.,
Respondent.

On Writ of Certiorari to the
United States Court of Appeals
for the Fifth Circuit

BRIEF AMICUS CURIAE OF THE
AMERICAN ASSOCIATION OF RETIRED PERSONS
IN SUPPORT OF PETITIONER

CATHY VENTRELL-MONSEES*
LAURIE MCCANN
THOMAS OSBORNE
AMERICAN ASSOCIATION
OF RETIRED PERSONS
601 E Street, N.W.
Washington, DC 20049
(202) 434-2060
Counsel for Amicus Curiae
American Association of
Retired Persons
*Counsel of Record

|

TABLE OF CONTENTS

INTEREST OF AMICUS CURIAE
SUMMARY OF THE ARGUMENT

I. THE OLDER WORKERS’ BENEFIT
PROTECTION ACT ABROGATED THE
COMMON LAW _ PRINCIPLES’ OF
RADIFICATION AND TENDER BACK

A. The Plain Language of the OWBPA
Demonstrates Congress’ Clear Intent To

Abrogate the Common Law of Waivers,
Including The Principles of Ratification and

. The Doctrines of Ratification and Tender
Back Are At Direct Odds With the
Purposes of the ADEA, As Amended by the

. WAIVERS THAT VIOLATE THE OWBPA
ARE UNENFORCEABLE AS A MATTER OF —
PUBLIC POLICY

. THE OWBPA WAS ENACTED TO PROTECT
EMPLOYEES FROM OVERREACHING

CONCLUSION

ii

TABLE OF AUTHORITIES
CASES
Page
American Soc. of Mech. Engineers v. Hydrolevel Corp.,
456 U.S. $56 (1982) on ccvcccccccccccscssusucunes 4
Andrus v. Glover Constr. Co.,
446 U.S. 608 (1980)... ces ccccccccccsccsccseces 8
Astoria Federal Sav. & Loan Ass'n v. Solimino,
$01 U.S. 104 (1DP1) ..ccccccesccccessusuuanen 4,10
Carr v. Armstrong Air Conditioning, Inc.,
817 F. Supp. 54 (N.D. Ohio 1993) ........-..0005: 12
Collins v. Outboard Marine Corp.,
808 F. Supp. 590 (N.D. Ill. 1992) ......... 02 cece ees 7
Connecticut Nat'l Bank v. Germain,
$03 U.S. 249 (1992) .nccccccccccccccsssssssseeen 6
Continental Casualty Co. v. United States,
314 U.S. $27 (1942) wc cccccsccccsccnsccvonssees 9
Fleming v. U.S. Postal Service AMF O'Hare,
27 F.3d 259 (7th Cir. 1994), cert. denied,
513 U.S. 1085 (1995) .....ccccccccccecevcsceees 18
Forbus v. Sears Roebuck & Co.,
958 F.2d 1036 (11th Cir. 1992) ..........-.+-- 12, 19
Griffin v. Kraft Gen. Foods, Inc.,
62 F.3d 368 (11th Cir. 1995) ......-- ee ee eeee cuanl

Harrison v. Arlington Ind. School Dist.,
717 F. Supp. 453 (N.D. Tex.), aff'd without Op..,

891 F.2d 904 (Sth Cir. 1989) ..................... 9
Hazen Paper Co. v. Biggins,

Ne a. ccc ccccccces 2
Hogue v. Southern Ry. Co.,

I 4, 10, 12, 19
Isaacs v. Caterpillar, Inc.,

702 F. Supp. 711 (C.D. Ill. 1988) ................. 19
Isaacs v. Caterpillar, Inc.,

765 F. Supp. 1359 (C.D. Ill. 1991) ........ 4, 12, 13,19

Isbrandtsen Co. v. Johnson,
10

Lancaster v. Buerkle Buick Honda Co.,
809 F.2d 539 (8th Cir. 1987) ..................... )

Lockheed Corp. v. Spink,
re 2

Long v. sears Roebuck & Co.,
105 F.3d 1529 (3d Cir. 1997) .......000..0... passim

McKennon v. Nashville Banner Public Co.,
Fn 11,12

Mobil Oil Corp. v. Higginbotham,
es ss ccc ccccccces 6

iv

O'Connor v. Consolidated Coin Caterers Corp.,

Ses Gs GEE Uhnwevetescncaceustetedenes 2
Oberg v. Allied Van Lines, Inc.,

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

Fan ee Es . -- weenscesbeces’ 5, 10, 14, 18
Oscar Mayer & Co. v. Evans,

ee ee SE idbanvercenenssgsssssbnuwet 10
Raczak v. Ameritech Corp.,

Se CE OUOED ccccciccenddbecéees 12
Rubin v. United States,

Se ED. Geb bacdbctedditcicetdevesedes 6
Runyan v. National Cash Register Corp.,

787 F.2d 1039 (6th Cir. 1986) ................4... 9
Soliman v. Digital Equip. Corp.,

869 F. Supp. 65 (D. Mass. 1994) .............. 8, 12

Taylor v. Gordon Flesche Co.,
FO EE GED cc cvcccucescccececss 9

Town of Newton v. Rumery,
TS vcs cunchekeeseestbeuuvtedeus 14

United States v. Texas,
Fae Se SED cccccsesetdedbdcdeessuceuass 6

Vv

STATUTES AND LEGISLATIVE HISTORY

Age Discrimination in Employment Act, (ADEA),

29 U.S.C. § 621 ef seg. (1994)... 2.6... cece passim
Se EE cacentecwescecocectccccsecut 10
EE Ce cacedicnccccecseces passim
ED cen ep cece ccccecesceecth 9
IEE co ccccccccccceseceevess 8
i ED oc ccccccccesccecesecses 8
A ee re 8
ee ED occ dccececccccccccccecess 8
Federal Employees Liability Act (FELA),
Be Oe OI cccccccccessccccccss 10

Older Workers Benefit Protection Act (OWBPA),
Pub. L. No. 101-433, 104 Stat. 978, 983 (1990) .. passim

H.R. Rep. No. 221, 101" Cong., Ist Sess. (1989) ....... 16

H.R. Rep. No. 664, 101" Cong., 2d Sess.(1990) ~.... 11,13

S. Rep. No. 79, 101" Cong., Ist Sess. (1989) ...... 5,13,16

S. Rep. No. 263, 101" Cong., 2d Sess. (1990) ....... 11,13
MISCELLANEOUS

Restatement (Second) of Contracts § 85 .............-- 4

Restatement (Second) of Contracts §178(1) .......... 14

Restatement (Second) of Contracts § 178 (3) ........-. 15

vi
Restatement (Second) of Contracts § 179

Restatement (Second) of Contracts § 197

No. 96-1291

IN THE
Supreme Court of the United States
OCTOBER TERM, 1996

DOLORES M. OUBRE,
Petitioner,

v.

ENTERGY OPERATIONS, INC..,
Respondent.

BRIEF AMICUS CURIAE OF THE
AMERICAN ASSOCIATION OF RETIRED PERSONS
IN SUPPORT OF PETITIONER

STATEMENT OF THE CASE
AARP adopts the Petitioner’s statement.
INTEREST OF AMICUS CURIAE*

The American Association of Retired Persons (AARP) is a
nonprofit membership organization of more than 30 million

* AARP’s brief has not been approved or financed by petitioner or her
counsel or any other party.

2

persons age 50 or older that is dedicated to addressing the
needs and interests of older Americans. More than one-third of
AARP's ty the are Non Dinan individuals, many of whom are
protected scrimination in Employment Act,
(ADEA), 0 US. S.C. “f 621 et seq. (1994).

One of AARP's primary objectives is to achieve dignity and
equality in the work place t lice dough pie aide, rch , practices,
and policies regarding work its
research, publications, and raining progam. AARP seks
eliminate ageist stereotypes, to encourage employers to hire
and to retain older workers, and to help older workers
overcome the obstacles they encounter because of age. Since
1985, as part of its advocacy efforts, AARP has filed more than
150 amicus curiae briefs in the federal district and appellate
courts and in the U.S. Supreme Court the proper
interpretation and application of the ADEA. In this Court,
AARP has partici as amicus curiae in, among others, the
cases of Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993);
Lockheed Corp. v. Spink, 116 S. Ct. 1783 (1996); and
O'Connor v. Consolidated Coin Caterers Corp., 116 S. Ct.
1307 (1996).

AARP's concern in this case is that the courts not strip older
workers of carefully crafted statutory ions at the time
they are the most vulnerable to employer ——. If
ratification and tender back principles override the Older
Workers Benefit Protection Act (OWBPA), Pub. L. 101-433,
104 Stat. 978, 983 (1990), employers will have no incentive to

follow the requirements Congress deemed necessary to prevent
employer overreaching.

For these reasons, AARP submits its brief amicus curiae.
SUMMARY OF THE ARGUMENT

Congress affirmatively abrogated the common law
Rede ee ee an eens ee
II of the Older Workers Benefit Protection Act (OWBPA), Pub
L. No. 101-433, 104 Stat. 978, 983 (1990). The OWBPA was
enacted to prevent employers from unfairly obtaining waivers

eS a

bien Cine cree aed aso requirements
enforceable. A court cannot enforce a waiver to bar an ADEA
suit if even one of the OWBPA’s criteria is absent.

Moreover, even if had not supplanted contract
principles with the OWBPA, the Restatement (Second) of
Contracts states that, as a matter of — policy, waivers that
violate a statute, such as the OWB may not be enforced.
In enacting the OWPBA, Congress expressed its belief that due
cplyees,prteig older workers om positions of employers and
re ea ee unfair and abusive

that waivers

roe we tne a
cee intent
that do not with the OWB A not be enforced must

be respected. loyers be able to thwart the
express will of Congress by the ——s s
Se areas

on age Wi repercussion.

Finally, ratification and tender back must not be judicially
superimposed on the OWBPA because they harm the very
the OWBPA was designed to protect, older employees.
Susteren do not need the ratification and tender back
Socenans 0 gata CON Gan e discrimination lawsuits.
Employers need to y with the clear and specific
requirements of the OWBPA, which provide employers with
the defense they seek from age discrimination suits.

4
ARGUMENT

I. THE OLDER WORKERS BENEFIT PROTECTION
ACT ABROGATED THE COMMON LAW
PRINCIPLES OF RATIFICATION AND TENDER
BACK.

The common law principles of ratification and tender back’
are anomalous to both the letter and spirit of the OWBPA and
did not survive its enactment. Common law principles survive
a statute "only upon legislative default, applying where
Congress has failed expressly or impliedly to evince any
intention on the issue." Astoria Fed. Sav. & Loan Ass'n v.
Solimino, 501 U.S. 104, 110 (1991). In litigation under federal
statutes, common law doctrines are appropriately applied only
when the principles underlying such doctrines are consistent
with the congressional intent e or implied in the
statutes. American Soc. of Mech. Eng’rs v. Hydrolevel Corp.,
456 U.S. 556, 569 (1982).

Congress was convinced that the common law did not
adequately protect the rights of older workers asked to waive
their rights under the ADEA:

” “The common law doctrine of ratification results in the enforcement of
‘a promise to perform all or part of an antecedent contract of the promisor
previously voidable by him.’”” Long v. Sears Roebuck & Co., 105 F.3d
1529, 1535 n.10 (3d Cir. 1997) citing Restatement (Second) of Contracts
§ 85 (1981). The “tender back” doctrine “require[s] a refund as a
prerequisite to institution of suit.” Hogue v. Southern Ry. Co., 390 U.S.
516, 518 (1968).

In most cases, these two common law contract doctrines are
inextricably entwined. See Isaacs v. Caterpillar, Inc., 765 F. Supp. 1359,
1373 (C.D. Ill. 1991) (“States that require a tender to challenge a release
sometimes use the language ‘condition precedent to suit’ and sometimes use
the language of ‘ratification.’ But there is no meaningful difference between
the two.”).

a as

5

Even the decisions that have followed the more
protective ‘totality of the circumstances’ approach .. .
have not held that certain protective factors must be
present . . . The instant legislation, by contrast, will
limit unsupervised waivers to certain situations and then
spell out clear and ascertainable standards to govern
those situations.

S. Rep. No. 79, 101st Cong., Ist Sess. 17 (1989) (emphasis
added).”

In the OWBPA, Congress expressed a very specific intent
to restrict the circumstances under which an employer may
obtain a waiver’ of ADEA rights and claims. “[TJhe
enactment of the OWRPA changed the legal a
concerning waivers of AEA rights or claims. Long v. Sears
Roebuck & Co., 105 F.3d 1529, 1534 (3d Cir. 1997).

By specifically limiting the manner in which employers
may secure such waivers, * has occupied this area of
the law.” Oberg v. Allied Van Lines, Inc., 11 F.3d 679, 683
(7th Cir. 1993), cert. denied, 511 U.S. 1108 (1994).
Judicially imposing ratification and tender back onto the
comprehensive scheme that Congress created for
waivers of ADEA rights or claims would “rewrit[e] rules that

2 “In enacting the OWBPA, Congress . . . rejected the applicability of
common law contract principles and declined to embrace even the more
demanding ‘totality of the circumstances’ test.” Long v. Sears Roebuck &
Co., 105 F.3d 1529, 1538 (3d Cir. 1997).

¥ AARP concurs with the amicus curiae brief of the National Employment
Lawyers Association (NELA) that there is a significant distinction between
“waivers” and “releases,” despite the fact that some, including many courts,
use the terms interchangeably. Brief of NELA at 6. The OWBPA regulates
“waivers” of ADEA rights and claims. While a waiver may be a term
within a contractual agreement, a waiver is not a contract and contractual
principles should be irrelevant in determining whether or not a waiver is
valid and therefore enforceable.

6

Congress has affirmatively and specifically enacted.” Mobil
Oil Corp. v. Higginbotham, 436 U.S. 618, 625 (1978).

A. The Plain Language of the OWBPA Demonstrates

ae oe Intent To the Common
w vers, Including Princi of
Ratification and Tender Back. -

This Court has long recognized that "[i]n order to abrogate
a common law principle, the statute must ‘speak directly’ to
the question addressed by the common law." United States v.
Texas, 507 U.S. 529, 534 a a Mobil Oil Corp. v.
Higginbotham, 436 U.S. 618, 625 (1978). The specific
question addressed by the principles of ratification and tender
back is whether an employee may waive any right or claim
under the ADEA merely by failing to return the benefits
received in exchange for the waiver. Congress could not have
spoken any more directly to this question when it declared
that "[a}n individual may not waive any right or claim under
this Act unless the waiver is knowing and voluntary." 29
U.S.C. § 626(f)(1) (emphasis added).

[Cjourts must presume that a legislature says in a
Statute what it means and means in a statute what it
Says there . . . . When the words of a statute are
unambiguous, then, this first canon is also the last;
‘judicial inquiry is complete.’

Connecticut Nat’l Bank v. Germain, 503 U.S. 249, 254
(1992) quoting Rubin v. United States, 449 U.S. 424, 430
(1981). With the language “an individual may not waive,”
Congress e ly divested individuals of any power to
waive the OWBPA's protections or its requirements.

In addition to the explicit language in § 626(f)(1),
Congress set forth a bottom line that all waivers must satisfy
to be legally enforceable. Congress mandated that "a waiver

-~ 7

may not be considered knowing and voluntary unless at a
minimum” all of the statutory requirements are met.”

Because the OWBPA establishes minimum or threshold
requirements, Griffin v. Kraft Gen. Foods, Inc., 62 F.3d 368,
373 (11th Cir. 1995), absolute technical compliance with its
provisions is required. The absence of even one of the
OWBPA's requirements invalidates a waiver. Collins v.

* Section 626(f)(1) of the ADEA, as added by the OWBPA, requires that
a waiver of “any right or claim” contain the following:

(A) the waiver is in writing and in plain language;

(B) the waiver specifically refers to rights or claims under the
ADEA;

(C) the waiver does not cover prospective rights or claims;

(D) the waiver is in exchange for valuable consideration in
addition to any benefits or amounts to which the
individual already is entitled;

(E) the individual is advised in writing to consult with an
attorney prior to signing the agreement containing the
waiver;

(F) the individual is given at least 21 days within which to
consider the agreement; however, if the waiver is
requested in connection with a group termination
program, each individual must be given at least 45 days
to consider the agreement;

(G) if a waiver is requested in connection with an exit
incentive or other employment termination program
offered to a group or class of employees, then at the
outset of the 45-day period the employer must inform
each eligible employee, in writing, of the class of
employees who are eligible, the specific eligibility
requirements, any applicable time limits on participation,
the job titles and ages of all employees eligible or
selected for the program, and the ages of all employees
in the same job classification or organizational unit who
are not eligible or selected; and

(H) the individual must be given at least 7 days to revoke the
agreement after signing it.

8

Outboard Marine Corp., 808 F. Supp. 590, 594 (N.D. Ill. 1992)
("Under the OWBPA, a release cannot be deemed knowing and
voluntary unless all of the technical requirements of the
OWBPA have first been satisfied.") (emphasis added). See
also Soliman v. Digital Equip. Corp., 869 F. Supp. 65, 69 n.13
oe hoa 1994) (““OWBPA .. . establishes a floor, not a
ceiling.”).

Congress recognized a single exception to its mandate that
waivers of ADEA rights and claims must satisfy all of the
OWBPA’s requirements to be enforceable. Congress only
excused waivers “in settlement of a charge filed with the Equal
Employment Opportunity Commission, or an action filed in
court by the individual or the individual’s representative,” 29
U.S.C. § 626(f)(2), from meeting all of the OWBPA’s
requirements. Such waivers need only meet criteria (A)
through (E), 29 U.S.C. § 626(f)(2)(A), and a modified version
of criterion (F).*

Despite Congress’ clear intent to create a single exception,
the Respondent would have this Court judicially engraft two
others through the doctrines of ratification and tender back.
Moreover, the exceptions these doctrines would add have the
potential to swallow the rule established by the OWBPA.
These doctrines effectively require enforcement of a waiver
without any regard to whether it meets any of the OWPBA’s
criteria. These doctrines enforce waivers whenever an
individual accepts consideration and does not tender it back
prior to bringing an age discrimination lawsuit. These
doctrines render the content of the waiver, and, thus, the
OWBPA itself, irrelevant.

“Where Congress explicitly enumerates certain exceptions
to a general prohibition, additional exceptions are not to be
implied, in the absence of a contrary legislative intent.” Andrus

* The individual must be provided a “reasonable,” but unspecified, period
of time within which to consider the settlement agreement, 29 U.S.C.
§ 626(f)(2)(B), as opposed to the 21-day and 45-day periods specified in
§§ 626(f)(1)(F)(i) and (F)(ii) for all other waivers.

9

v. Glover Constr. Co., 446 U.S. 608, 616-17 (1980), citing
Continental Casualty Co. v. United States, 314 U.S. 527, 533
(1942). Since Congress has clearly stated that the only
circumstance in which a waiver need not meet all of the
OWBPA’s requirements is when the waiver is in settlement of
a pending EEOC charge or court action, no other exceptions
may be implied.

Finally, Congress spoke loudly and clearly in expressing its
intent to abrogate contract principles through the OWBPA’s
specific provisions that supplant and exceed common law
requirements concerning waivers. For example, the
requirement that the waiver be in writing, 29 U.S.C.
§ 626(f)(1)(A), overrules decisions enforcing oral waivers. See,
e.g., Taylor v. Gordon Flesche Co., 793 F.2d 858, 862 (7th Cir.
1986). The requirement that the waiver be written in a manner
“calculated to be understood by the average individual eligible
to ——. 29 U.S.C. § 626 (f)(1)(A), overrules cases
holding that if the plaintiff understood the waiver, whether
anyone else would have understood it is irrelevant. See Runyan
v. Nat’l Cash Register Corp., 787 F.2d 1039, 1044 (6th Cir.
1986) (en banc). The requirement that waivers specifically
refer to the ADEA overrules cases that enforced waivers that
did not refer to the statute. See, e.g, Lancaster v. Buerkle
Buick Honda Co., 809 F.2d 539, 540 (8th Cir. 1987). The
provisions requiring written advice to consult with a lawyer and
providing a revocation period were unheard of at common law.
Because of its special concern for employees terminated in
reductions in force, Congress added two additional
requirements for group terminations -- the extension of the time
for the employee’s consideration of the waiver from 21 to 45
days and the disclosure of job titles and ages of affected
employees. These requirements constitute a complete
departure from the common law.

In addition, under common law, an employee challenging
a waiver had the burden of showing that it was not "knowing
and voluntary." See, e.g., Harrison v. Arlington Ind. School
Dist., 717 F. Supp. 453, 455 (N.D. Tex.), aff'd without op., 891
F.2d 904 (5th Cir. 1989). The OWBPA shifts this burden to
the employer. See 29 U.S.C. § 626(f)(3). “The requirements

10

established in order for releases to be ‘knowing and voluntary’
under the OWBPA clearly exceed the protections available
under the common law.” Long v. Sears Roebuck & Co., 105
F.3d 1529, 1539 (3d Cir. 1997).

The statutory text could not be clearer, nor could the
legislative intent. Congress stated that only when each of the
OWBPA’s requirements is met will a waiver be considered
valid and enforceable. If a waiver fails to comply with even
one of these conditions, then “[n]o matter how many times
parties may try to ratify such a contract, the language of the
OWBPA, ‘an individual may not waive,’ forbids any waiver.”
Oberg v. Allied Van Lines, Inc., 11 F.3d 679, 683 (7th Cir.
1993), cert. denied, 511 U.S. 1108 (1994).

B. The Doctrines of Ratification and Tender Back Are
At Direct Odds With the Purposes of the ADEA, As
Amended by the OWBPA.

“[W]hen a statutory purpose to the contrary is evident,
common law principles may not be applied.” Jsbrandtsen Co.
v. Johnson, 343 U.S. 779, 783 (1952). See also Astoria Fed.
Sav. & Loan Ass'n v. Solimino, 501 U.S. 104, 108 (1991). The
impact that common law principles would have on a federal
statute’s purpose and objectives determines whether they may
be imposed on the statute. Hogue v. Southern Ry. Co., 390
U.S. 516, 518 (1968). Hogue, the only S Court decision
to consider a “tender back” requirement for waivers of claims
under a federal remedial statute, rejected the doctrine. After
determining the impact on the purpose and objectives of the
Federal Employees Liability Act (FELA), 45 U.S.C. § 51 ef
seq. (1939), the Court ruled that a tender requirement would be

“wholly incongruous with the general policy of the Act.” 390
U.S. at 518. Ratification and tender back requirements would
—— purposes of the ADEA, as amended by the

A.

Congress enacted the ADEA to eliminate arbi age
discrimination in the workplace. Oscar Mayer & Co. v. Evans,
441 U.S. 750, 756 (1979); 29 U.S.C. § 621(b). The Act’s
objectives are to deter discrimination and to compensate

11

victims for injuries caused by the ibited discrimination.
McKennon v. Nashville Banner Pub. Co., 115 S. Ct. 879, 884
(1995). The “vital element” that allows these objectives to be
realized is that § 626(c) of the ADEA grants an age
discrimination victim “a right of action to obtain the authorized
relief.” Jd at 884. Congress enacted the OWPBA to protect
that “vital element” from overreaching employers.

The of the OWBPA amendments to the ADEA is
to" “ensure{ | that older workers are not coerced or manipulated
into waiving Ne 203, ISlet Cone. relief under the ADEA."
S. Rep. No. 263, 101st Sess. 2 (1990). Congress
ped a eb pe wan ha en
practices by requiring employers to draft and seek waivers in
strict compliance with the Act’s provisions. The legislative
history of the OWBPA makes clear that Congress did not want
an older worker to be precluded from pursuing a meritorious
ADEA claim unless she has knowingly and voluntarily
relinquished the right to do so.

In order to employees’ right to seek relief under the
ADEA, the OWBPA restricts an employer’s use of waivers as
a defense to an ADEA claim. statute requires, at a

minimum, that the waiver comply with the technical
requirements of the Act. Cognizant that an employer's
abusive and unfair practices may result in an ee’s
involuntary or uninformed waiver —y ADEA rights,”

desi the OWBPA to ensure that the door to

ADEA claims remains open to all but those who and
voluntary choose to close it. “The objectives of the AD
furthered when even a single employee establishes that an

© See H.R. Rep. No. 664, 101st Cong., 2d Sess. 51 (1990) (“Apart from
specifying that a waiver must be knowing and voluntary, the legislation
provides further requirements. Although some of these requirements may
be further indicia of whether a waiver is knowing or voluntary, each
requirement set forth in the bill must be satisfied independent of the
knowing and voluntary factor for any waiver to be lawful.”).

Y HR. Rep. No. 664, 101st Cong., 2d Sess. 22-23 (1990).

12

S. Ct. at 885. If an ee fails to bring a claim of age
discrimination because cannot afford to tender back the
consideration received for an invalid waiver, the of the

* See, e.g, Forbus v. Sears Roebuck & Co., 958 F.2d 1036, 1041 (11th Cir.
1992) (“Forcing older employees to tender back their benefits in order to
attempt to regain their jobs would have a crippling effect on the ability of
such employees to challenge releases based on misrepresentation or
duress.”); Raczak v. Ameritech Corp., 103 F.3d 1257, 1270 (6th Cir. 1997)
(“A tender-back requirement would deter meritorious ADEA filings.”);
Isaacs v. Caterpillar, Inc., 765 F. Supp. 1359, 1367 (C.D. Ill. 1991) (Hogue
rests on view that a tender requirement would deter meritorious challenges
to waivers in FELA lawsuits; a tender requirement will have just as
crippling an effect on ADEA challenges); Soliman v. Digital Equip. Corp.,
869 F. Supp. 65, 70 (D. Mass. 1994) (“To require plaintiff to tender back
_ the benefits he has received as a precondition of going forward with his
lawsuit would likely chill his prospects of prosecuting what may be a
meritorious claim.”); Carr v. Armstrong Air Conditioning, Inc., 817 F.
Supp. 54, 58 (N.D. Ohio 1993) (a tender requirement would deter
meritorious challenges to waivers in ADEA claims).

13

Isaacs v. Caterpillar, 765 F. Supp. 1359, 1367 (C.D. Ill. 1991).

Moreover, Congress explained the need for protective
waiver provisions, stating:

S. . No. 79, 101st ., Ist Sess. 9 (1989), adopted by
ie in S. Rep. er § 101st Cong. 2d Sess. 15 (1990);
H.R. Rep. No. 664, 101st Cong., 2d Sess. 23 (1990) (citations
omitted).

vulnerable to coercive and abusive waiver practices and clearly

affect their ability to challenge an employer’s

policies or If ratification and tender back are
i on the OWBPA, many employees will have

little choice but to let ’ discriminatory policies and

practices and unpunished. “No matter how
i releases might violate the requirements of the

[ PA], employees would be precluded from challenging
iven when were

ate Caterpillar 165 F. Supp. 1359, 1367 (C.D. Ill. 1991).

Given the likelihood that an older employee would be

tender back requirement would effectively pertnit employers
‘0 Seriiats ieee Eocaahes tte ANOA and
the OWBPA altogether, without fear of repercussion.

Even if Congress had not abrogated the common law and
. ied this area of the law” with the OWBPA, Oberg v.
Allied Van Lines, Inc., 11 F.3d 679 (7th Cir. 1993), cert.
denied, 511 U.S. 1108 (1994), and even if contract law
appmed 0 (Seas, Ge pertinent sections of Go Reststenens
(Second) of Contracts demonstrate that employers whose
waiver agreements violate the OWBPA may ‘

|

policy harmed by enforcement of the agreement.” Town of

Newton v. Rumery, 480 U.S. 386, 392 (1987), citing
Restatement (Second) of Contracts § 178(1).2 Any interest in
imposing ratification and tender back on the OWBPA clearly
is outweighed by what will result if illegal waivers are enforced
-- employers will have a license to discriminate based on age
without repercussion, and thousands of older workers will lose
their ght to seek redress against unlawful discrimination.

The Restatement (Second) of Contracts explains why
contractual terms that violate public policy may not be
enforced:

In general, parties may contract as they wish, and
courts will enforce their agreements without
passing on their substance. Sometimes, however,

* A public policy against the enforcement of promises or other terms may
be derived by the court from

(a) legislation relevant to such a
policy, or

(b) the need to protect some aspect of
the public welfare . . . .

Restatement (Second) of Contracts § 179.

15

acy ap og eect te
contract is outweighed some overriding
interest of society and will refuse to enforce a

the promisor as such. Two reasons lie behind this
reluctance. First, a refusal to enforce the promise
may be an appropriate sanction to discourage
undesirable conduct, either by the parties
themselves or by others. Second, enforcement of
the promise may be an inappropriate use of the
judicial process in carrying out an umsavory
transaction.

Restatement (Second) of Contracts, Chapter 8, Unenforceability
on Grounds of Public Policy, Introductory Note. .

In enacting the OWBPA, C decided that protecting
older workers from unfair and abusive waiver practices
“outweighed” any interest in gi effect to employers’ and
employees’ “freedom of contract.” ing to enforce invalid
waivers is an “ jate sanction” to discourage employers
from ignoring the OWBPA.

The Restatement identifies four factors to consider “[ijn
weighing a public policy against enforcement of a term.
These factors are:

(a) the strength of that policy as manifested by
legislation or judicial decisions,

(b) the likelihood that a refusal to enforce the
term will further that policy,

(c) the seriousness of any misconduct involved
and the extent to which it was deliberate, and
(d) the directness of the connection between
that misconduct and the term.

Restatement (Second) of Contracts § 178 (3).

16

These four factors command that a waiver that violates the
OWBPA, which is the “term” at issue, may not be enforced
as a matter of public policy.

First, the OWBPA is an exceptionally strong expression of
the public policy against the “manipulation of older workers”
based on their “lack of information or expertise.” S. Rep. No.
79, 101st Cong., 1st Sess. 9-12 (1989).

Second, rejecting the doctrines of ratification and tender
back as a means for employers to enforce their illegal waivers
advances the OWPBA’s of protecting individuals from
being coerced or into waiving their ADEA rights
or claims. Without these doctrines to fall back on,
will have greater incentive to comply with the
requirements of the OWBPA. All that the employer as the
drafter of the waiver needs to do to obtain an enforceable
waiver of ADEA rights and claims is simply to follow the
statute’s “cookbook” requirements.” When an employer drafts
a waiver in accordance with the minimum standards,
the legislative intent that an employee’s decision to waive her
ADEA rights be “knowing and voluntary” will be advanced.

Third, the OWBPA’s legislative history amply documents
the employer overreaching and other misconduct that

Congress to enact waiver legislation.” Not surprisingly,
are allegations of coercion and misrepresentation in this case.

i A waiver of ADEA rights or claims is usually a “term” in a separation
agreement.

1 “Employers should not need the ratification doctrine in order to ensure
that their releases are effective: they need to comply with the OWBPA.”
Long v. Sears Roebuck & Co., 105 F.3d 1529, 1543 (3d Cir. 1997).

4 “The House and Senate hearing records are replete with evidence of
older workers who have been manipulated or coerced into waiving their
rights under the ADEA.” H.R. Rep. No. 221, 101st Cong., Ist Sess. 10
(1989).

17

Finally, a direct relationship exists between the employer’s
misconduct and the i waiver. As stated above,

provided employers clear instructions for drafting a valid
waiver. elttenadaiedierdan

The Restatement not only establishes that waivers that
violate the OWBPA are unenforceable on grounds of public

policy, it also negates a tender back Section 197,
entitled “Restitution Generally Una vailable.” provides

Except as stated in Sections 198 and 199
[Restitution in Favor of Party who Is Excusably

Ignorant or Is Not Equally in the Wrong, and
Restitution Where Party Withdraws if Situation Is

under or in return for a that is
unenforceable on grounds of c policy unless
denial of restitution would cause

forfeiture

Comment:

a. Rationale. In general, if a court will not, on
grounds of public policy, aid a promisee by
enforcing the promise, it will not aid him by
mn en any tg a
has rendered in return for the unenforceable
promise. Neither will it aid the promisor by
allowing a claim in restitution for
that he rendered under the unenforceable
promise. /t will simply leave both parties as it
finds them, even though this may result in one of
them retaining a benefit that he has received as a
result of the transaction.

Restatement (Second) of Contracts § 197 (emphasis added).
In short, the common law rule as distilled by the

Restatement is that an employer, having created a waiver which
violates the OWBPA, cannot seek return (restitution) of the

18
consideration = for the waiver. Nor can the employer
enforce the defective waiver. Instead, the employer’s remedy
is a set off of the amount of consideration paid for the waiver
against any judgment for the employee”

Iii. THE OWBPA WAS ENACTED TO PROTECT
EMPLOYEES FROM OVERREACHING
EMPLOYERS.

In determining whether or not the principles of ratification
and tender back may be used to enforce waivers that do not
comply with the OWBPA, it is critical to remember that, first
and foremost, the OWBPA was enacted to protect employees
from abusive and unfair waiver practices.

The OWBPA was designed to protect employees
negotiating with employers, not to protect employers
from overreaching plaintiffs. Employers are, by far, in
a better position to protect their own interests than are
older employees.

Long, 105 F.3d at 1543. However, the principles of ratification
and tender back benefit employers over employees, the
intended beneficiaries of the OWBPA, in two very significant
ways.

First, ratification and tender back do not return the parties
to the status quo, as many employers est. these
doctrines provide a significant windfall to employers.
Consideration for a waiver agreement provides an employer
with benefits that far exceed a defense against future age
discrimination lawsuits. The employer is able to terminate a
typically long-term, highly-paid employee and will no longer
have to pay her salary and benefits. employer is able to
reduce the size of its work force, which often is one of its main

See Long, 105 F.3d at 1543; Oberg, 11 F.3d at 684; Fleming v. U.S.
Postal Service AMF O'Hare, 27 F.3d 259, 261 (7th Cir. 1994), cert. denied,
513 U.S. 1085 (1995).

19

objectives.” The amount the employer pays the employee also
“typically incorporates consideration for multiple factors not
challenged in an age case: waivers for other violations of law
or contract, rolled-in vacation and sick time, and a public
relations benefit to the employer that itself may deter other
litigation.” Long, 105 F.3d at 1544.

Although an employee receives some benefits that she
might not ordinarily receive when she signs a waiver, she gives
up a substantial amount in return. In addition to her right to
relief under the ADEA and other statutes, the employee loses
her job, her salary and continued benefits. Moreover, if the
employee returns the consideration, she is “deprived of money
paid to induce him to retire, yet he or she is not restored to
employment; all he or she gets is the rescission of his or her
release.” Jsaacs v Caterpillar, Inc., 765 F.Supp. at 1367.

In addition, it cannot be said that an individual who is
permitted to challenge age discrimination without first
returning the benefits receives a “windfall.” If the waiver is
declared invalid and the individual prevails in the suit, the
benefits the individual received can be offset against the
recovery” If the waiver is upheld, the employer received what
it paid for - a valid defense against the merits of the lawsuit”
Finally, if the waiver is struck down and the employee loses her
lawsuit on the merits, the employer may complain that it paid
for a waiver that failed. However, such a complaint should not
fall on sympathetic ears since it was the employer whose faulty

‘¥ “The purpose of [early retirement] programs is to induce people to retire
earlier than they otherwise would have done. Such early retirement is an
economic benefit to the company. To get it, the company offers the
employee money for leaving early.” /saacs v Caterpillar, Inc., 765 F. Supp.
at 1367.

Y Hogue, 390 U.S. at 518; Forbus, 958 F.2d at 1041.
i A waiver is no guarantee that a suit will not be filed; it simply is a

defense against a suit once filed. /saacs v. Caterpillar, 702 F. Supp. 711,
715 (C. D. Ill. 1988).

20

drafting of the waiver subjected it to suit. After all, the
employer only had to comply with the OWPBA’s provisions
and the waiver would have done its job.

Second, permitting ratification and tender back would allow
employers to discriminate based on age without repercussion.
By capitalizing on older loyees’ economic vulnerability,
employers may coerce employees into signing waivers that
clearly violate the OWBPA in order to buy silence against
complaints of age discrimination. Indeed, the Respondent in
this case admits that its waiver does not ly with the
OWBPA. Yet, it claims it is not subject aan for its
alleged discriminatory practices. If ratification and tender back
override the OWBPA, employers, like the t here,
will have no incentive to comply with the OWBPA’s waiver
provisions.

Ratification and tender back unjustly enrich employers at
the expense of the older employees for whose benefit the
OWBPA was enacted. Ratification and tender back encourage
employers to violate the OWBPA while buying immunity from
challenges to their discriminatory policies and practices. These
common law principles may not be imposed on the ADEA, as
amended by the OWBPA.

21
CONCLUSION

For the foregoing reasons, AARP respectfully submits that
the judgment of the United States Court of Appeals for the
Fe Cou Gane Se nee a eS eo
rule that Congress abrogated the common law principles 0
ratification and tender back when it enacted the OWBPA’s
comprehensive and remedial rules governing waivers of ADEA
rights and claims.

Respectfully submitted,

Cathy Ventrell-Monsees*
Laurie McCann
Thomas Osborne
American Association

of Retired Persons
601 E Street, N.W.
Washington, DC 20049
(202) 434-2060

Counsel for Amicus Curiae
American Association

of Retired Persons
*Counsel of Record

June 20, 1997

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0050%3A09. Public record. Not legal advice.