Petition for Writ of Certiorari — Hines v. ABB Vetco Gray, Inc.

om Supreme Court, U.S.

' FILED

96 546 JUL 29 19%

No.

F THE CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1996

CHARLES HINES,

Petitioner,

V.

ABB VETCO Gray, INC.

Respondent.

ON PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

COLIN B. AMANN

DREW M. CAPUDER

CAPUDER, GAITHER & AMANN, L.L.P.

500 Dallas Street, Suite 1000

Houston, Texas 77002-4804

(713) 654-7455 (Telephone)

(713) 654-8711 (FAX)

Counsel of Record for Petitioner

July 29, 1996

EE PEE JETT SO Ne aE LOS RI Tt NG ” TT EO eens

Bid d : s 2 ; tie OER Bae

QUESTIONS PRESENTED

1. Whether an ADEA plaintiff, who signed a release which

clearly fails to comply with the Older Workers Benefit Protection Act

(29 U.S.C. § 626(f)), must repay any release consideration as a

condition to asserting claims under the ADEA.

2. Assuming an ADEA plaintiff must repay release

consideration under the circumstances set out in question 1, should the

plaintiff be given a reasonable amount of time to repay the release

consideration in light of the principles set out in RESTATEMENT

(SECOND) OF CONTRACTS § 381.(1978), especially considering whether

the employer’s conduct impaired the plaintiff's ability to repay the

consideration? |

PARTIES TO THE PROCEEDING

Petitioner Chuck Hines was the plaintiff in the United States

District Court, and was the appellant in the United States Court of

Appeals for the Fifth Circuit.

Respondent ABB Vetco, Inc. was the defendant in the United

States District Court, and was the appellee in the United States Court

of Appeals for the Fifth Circuit.

lil

TABLE OF CONTENTS

Page

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A. Introduction and Factual Background ............... 5

B. District Court Pleadings and Summary Judgment ..... 7

C. Opinion of the Court of Appeals ................... 8

iy NT MOE MEE Cc ce haat wa cancdehbsvnetecess 9

A. The Plain Language of the Older Workers Benefit

he es Win bya eh A gb Kine meas ees ee sa 10

B. The Conflict Between the Circuits on the “Pay Back”

EE Ce wa Pcie. ch wb eke s 6 Galen SHORES 8s 13

C. The Fifth Circuit’s Rule Fails to Provide A

“Reasonable” Amount of Time to Repay the Release

Oe is ha Si erehe hades Suaeeteken e's 13

i I Oe BAS ANN ah ha Se 40 6a OW ANS 0 30 0 Gee 14

TABLE OF AUTHORITIES

Federal Cases

Blakeney v. Lomas Information Systems, Inc.,

65 F. 3d 482 (Sth Cir.), cert. denied, 116 S. Ct. 1042 (1995)

Blistein v. St. John’s College,

tai So 7G. Le, * Re tear eee eee 13

Forbus v. Sears, Roebuck & Co..,

958 F.2d 1036 (11th Cir.), cert. denied, 113 S. Ct. 412 (1992)

6 CRE aE OES Oo he a Ee EEE PER ee 9, 13

Hogue v. Southern Ry. Co.,

Be Sec A SED 4 oo hares Oc oe PTE Ae ck 9,12

Isaacs v. Caterpillar, Inc.,

Fae es Ar as is ROE) cba ck avng es aaskaces 13

Oberg v. Allied Van Lines, Inc.,

11 F.3d 679 (7th Cir. 1993), cert. denied, 114 S. Ct. 2104

CRO os KR Du we eas Saas cha oe gs ei eeles 9, 12, 13

Oberg v. Allied Van Lines, Inc.,

1992 U.S. Dist. LEXIS 11208, 59 F.E.P. Cases 769 (N.D. Il.

1992), aff'd, 11 F.3d 679 (7th Cir. 1993), cert. denied, 114 S. Ct.

BEE Ks ddd ok Ae SRR Raa eR LAER 13

O’Shea v. Commercial Credit Corporation,

930 F.2d 358 (4th Cir.), cert. denied, 502 U.S. 859 (1991) . 13

Wamsley v. Champlin Refining and Chemicals,

11 F.3d 534 (Sth Cir. 1993), cert. denied, 115 S. Ct. 1403

CSW paid Basil s be kwh Wb Fale SKS Mek Ok ee 11, 12, 14

Wittorf v. Shell Oil Co..,

Se ee eee ee as Se kA noo K as cee ns 12

Federal Statutes

eS oe Bo eee Ser niy Ig meaner 2

Ser Ses ao ak kG 0h ROA eS ewe hea eee Se

PE EES 5 Sk b0 dk 5A RE ae OE OW e Se 9-13

re BER Yo Fea | eR are eae. wr 6, 11

Oe Ch as RIT i ow BL a Sin A aS ha v8 she 6 NSS 4,43

pg th 8 we Ts A ) RRA RN aa ranma eae ere a 483

Se Ses BG 3k Ros 44 a ak Led ess wees CEDAR CORO 1]

A Sas Ae ED a 2a 5 EV ERE L MR CORSA SL Oe NwEES 11,12

Age Discrimination in Employment Act of 1967 (“ADEA”), 29 U.S.C.

ee I oo oa es a eo ke Cae ok ee arian 2,9

Older Workers Benefit Protection Act (“OWBPA”), Pub L. No. 101-

433, 104 Stat. 978, 983-4 (October 16, 1990) ............. re

Treatises and Secondary Materials

RESTATEMENT (SECOND) OF CONTRACTS § 381 (1978) ........ 14

vi

NOTES ON APPENDIX

Attached to this petition are the following documents:

Appendix A:

Appendix B:

Appendix C:

Appendix D:

Opinion (unpublished) of the Court of Appeals

for the Fifth Circuit, dated April 29, 1996,

affirming summary judgment in favor of ABB

Vetco Gray (employer).

Order [Opinion] of the district court, dated

September 14, 1995, granting summary judgment

in favor of ABB Vetco Gray.

Final Judgment of the district court, dated

September 14, 1995, entering final judgment in

favor of ABB Vetco Gray.

Affidavit of Charles Hines, dated September 2,

1995, which was attached to Hines’ opposition to

ABB Vetco Gray’s motion for summary

judgment.

Sis aa

No.

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1996

CHARLES HINES,

Petitioner,

V.

ABB VETCO GRAY, INC.

Respondent.

ON PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

The Petitioner, Charles Hines (“Hines’’), respectfully prays that a

Writ of Certiorari issue to review the judgment and opinion of the

United States Court of Appeals for the Fifth Circuit entered in this

proceeding on April 29, 1996.

1. Opinions Below

1. The district court granted summary judgment in favor of

ABB Vetco Gray, Inc. (ABB Vetco Gray”) on September 14, 1996. The

opinion of the district court is reproduced in the appendix at page B-1.

2

The final judgment of the district court is reproduced in the appendix

at page C-1. The district court’s opinion was not published.

2. The Court of Appeals for the Fifth Circuit affirmed the

district court on April 29, 1996. The opinion of the Fifth Circuit is

reproduced in the appendix at page A-1. The Fifth Circuit’s opinion

was not published. The affirmance, without an opinion, is reflected at

85 F.3d 624.

ll. Jurisdiction

3. | The judgment of the Fifth Circuit was entered on April 29,

1996 (Appendix A-1). The 90th day after the judgment was Sunday,

July 28, 1996, and this petition was filed the next business day,

Monday, July 29, 1996.

4. No motion for rehearing was filed with the Fifth Circuit.

There has not been any request for any extension concerning the

deadline for filing this petition for a writ of certiorari.

5. The jurisdiction of this Court is invoked pursuant to 28

U.S.C. § 1254(1).

lll. Statutory Provisions Involved

6. This petition centers around Section 201 of the Older

Workers Benefit Protection Act (““OWBPA”), Pub L. No. 101-433, 104

Stat. 978, 983-4 (October 16, 1990), which was codified at 29 U.S.C.

§ 626(f), Age Discrimination in Employment Act of 1967 (“ADEA”),

29 U.S.C. § 621 et seg. Section 626(f) reads as follows:

(f)(1) An individual may not waive any right or claim

under this chapter unless the waiver is knowing and

voluntary. Except as provided in paragraph (2), a

Saleh LCE

CEL

3

waiver may not be considered knowing and voluntary

unless at a minimum—

(A) the waiver is part of an agreement between

the individual and the employer that is written in a

manner calculated to be understood by such

individual, or by the average individual eligible to

participate;

(B) the waiver specifically refers to nights or

claims arising under this chapter;

(C) the individual does not waive rights or

claims that may arise after the date the waiver is

executed;

(D) the individual waives rights or claims only

in exchange for consideration in addition to anything

of value to which the individual already is entitled;

(E) the individual is advised in writing to

consult with an attorney prior to executing the

agreement;

(F)(i) the individual is given a period of at

least 21 days within which to consider the agreement;

or

(ii) if a waiver is requested in connection

with an exit incentive or other employment termination

program offered to a group or class of employees, the

individual is given a period of at least 45 days within

which to consider the agreement;

(G) the agreement provides that for a period of

at least 7 days following the execution of. such

agreement, the individual may revoke the agreement,

and the agreement shall not become effective or

enforceable until the revocation period has expired;

(H) if a waiver is requested in connection with

an exit incentive or other employment termination

program offered to a group or class of employees, the

employer (at the commencement of the period

specified in subparagraph (F)) informs the individual

4

in writing in a manner calculated to be understood by

the average individual eligible to participate, as to—

(i) any class, unit, or group of

individuals covered by such program, any eligibility

factors for such program, and any time limits

applicable to such program; and

(ii) the job titles and ages of all

individuals eligible or selected for the program, and

the ages of all individuals in the same job classification

or organizational unit who are not eligible or selected

for the program.

(2) A waiver 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, alleging age discrimination

of a kind prohibited under section 623 or 633a of this

title may not be considered knowing and voluntary

unless at a minimuin—

(A) subparagraphs (A) through (E) of

paragraph (1) have been met; and

(B) the individual is given a reasonable period

of time within which to consider the settlement

agreement.

(3) In any dispute that may arise over whether any

of the requirements, conditions, and circumstances set

forth in subparagraph (A), (B), (C), (D), (E), (F), (G),

or (H) of paragraph (1), or subparagraph (A) or (B) of

paragraph (2), 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).

(4) No waiver agreement may affect the

Commission's rights and responsibilities to enforce

this chapter. No waiver may be used to justify

interfering with the protected right of an employee to

5

file a charge or participate in an investigation or

proceeding conducted by the Commission.

IV. Statement of Case

A. Introduction and Factual Background

7. Hines was employed at ABB Vetco for 5 years until he was

fired on September 30, 1993.” He had been a foreman at the time of his

termination, with 50-60 people working under him.

8. Hines came to work on September 30, 1993 just like any

other day in his 5-year history at ABB Vetco. He had received no

warning of any problem or complaint, he had recently had an

“excellent” evaluation with a 5% raise, and the productivity and

efficiency statistics by which his department was judged were “up”

(some at 5-year highs) (Appendix D-2, { 3).

9. Bob McNamara, who had recently given Hines an

“excellent” review, came into Hines’ office and, without any warning

whatsoever, told Hines he was being laid off. McNamara then took

Hines into Sharon Clarkson’s office (human resources department)

(Appendix D-2—D-3, ¥¥ 5-6).

10. Clarkson stated that “we” can offer Hines a severance

package, “today” and “right now,” and that if Hines did not agree to it

“right now,” it would be withdrawn (Appendix D-2, {9 5-6). Hines then

had 2 options: (1) he could the take “severance offer,” with 8 weeks of

severance pay, or (2) he could reject the severance offer and would

of Hines was replaced by a man under 40 years of age (Appendix D-

6). Hines was 58 at the date of his termination, and ABB Vetco Gray did not

dispute Hines’ ability to establish a prima facie case (Appendix B-6).

6

immediately be “out on the street,” with no severance pay of any sort

(Appendix D-3, { 6).

11. Clarkson had documents already prepared for Hines’

signature when Hines was escorted into her office, including a release

(Appendix D-2, J 5, D-8). Clarkson showed Hines page | of the

“release” letter, which stated the severance package the company was

offering him “right now” only. Clarkson then turned to page 2 of the

letter, which contained the release language and a signature block for

Hines, and stated that “we” need your signature “here” (pointing to the

signature block) for you to get your check. Neither Clarkson nor

McNamara said anything about asking Hines to release any

employment discrimination claims (Appendix D-3, { 7).

12. Hines then signed the release letter, which he understood to

be taking care of severance and vacation pay—but he did not

understand it as a release of employment discrimination claims

(Appendix D-3, ¥ 7).

13. At the time he was fired, Hines had not received any

indication of dissatisfaction from his employer, and had made no effort

to seek other employment. Indeed, being fired was potentially

catastrophic to Hines because his wife had breast cancer surgery, had

subsequent surgery because of complications, and was under continuing

care in connection with the breast cancer—the prospect of losing their

health insurance was horrifying to Hines. His wife worked part time,

and her income was not nearly sufficient to allow them to make their

minimum monthly payments (including a home mortgage and car

payment) (Appendix D-6, { 14).

14. Hines was not advised by ABB Vetco in connection with the

release to consult with an attorney (in violation of 29 U.S.C.

§ 626(f)(1)(E)), was not given 21 days to consider the proposed release

7

agreement (in violation of 29 U.S.C. § 626(f)(1)(F)(i)), and was not

advised that he could revoke the agreement 7 days after signing it (in

violation of 29 U.S.C. § 626(f)(1)(G)) (Appendix D-4, J 10).

15. The “release” contained language releasing all employment

discrimination claims, including tose under the ADEA (Appendix D-

9).

B. District Court Pleadings and Summary Judgment

16. Hines sued ABB Vetco Gray for age discrimination under the

ADEA; and ABB Vetco filed an answer and a counterclaim against

Hines, alleging breach of contract and that Hines had released all claims

in issue in this lawsuit (Appendix B-1). Hines’ answer to the

counterclaim alleged that the release violated the Older Workers

Benefit Protection Act (“OWBPA”) and was not “knowing and

voluntary.” ABB Vetco Gray admitted that the release (Appendix D-

8—D-9) failed to comply with the OWBPA (Appendix B-4).

17. ABB Vetco Gray filed a motion for summary judgment

contending that, although the release failed to comply with the

OWBPA, Hines had ratified the release by not repaying the release

consideration before filing suit (Appendix B-4). The district court

granted ABB Vetco Gray’s motion for summary judgment (Appendix

B-1) and entered final judgment against Hines (Appendix C-1).

18. Hines’ Original Answer to ABB Vetco Gray's counterclaim

made an unconditional tender of the release consideration in the form

of an offset against any recovery. Hines’ answer also stipulated, in the

event he lost his lawsuit, that a judgment would be entered against him

in the amount of the release consideration (Appendix A-2—A-3). Hines

did not literally repay the release consideration. However, he filed a

motion to continue the summary judgment decision because he was in

8

the process of raising the necessary funds; but the district court denied

the motion for continuance on the ground that it was then too late

(almost 2 years after the signing of the release) to repay the release

consideration (Appendix B-5).

C. Opinion of the Court of Appeals

19. The Fifth Circuit affirmed the district court’s rendition of

summary judgment, and held that a “failure to ‘tender back’ the

consideration paid in exchange for the waiver of specific claims in a

timely manner precludes a suit on those claims by the terminated

employee” (Appendix A-2).

20. The Fifth Circuit addressed Hines’ stipulation that ABB

Vetco Gray would receive an offset in the amount of the severance

consideration, and ruled that such a tender of the consideration would

render the Fifth Circuit’s “tender back” rule “meaningless” (Appendix

A-2).

21. The Fifth Circuit did not set out the basis for deciding what

was a “timely” repayment of the consideration, but stated that the

repayment had to be made “shortly after” discovery of the alleged

“deficiency” of the release (Appendix A-3).

22. Hines alleged that it had only been 4 months since he had

learned that there was a “deficiency” concerning the release (Appendix

D-5, ¥ 13), but the Fifth Circuit stated that Hines’ efforts to continue

the summary judgment proceeding to allow him to actually repay the

money “came almost two years after he was terminated, six months

after he filed suit, and four months after [ABB] Vetco [Gray] notified

him of their intention to rely upon their waiver agreement as a defense”

(Appendix A-3).

9

V. Reasons for Granting Writ

23. This case involves a simple reading of the plain language of

the Older Workers Benefit Protection Act of 1990 (“OWBPA”), which

States that an employee “may not waive” ADEA rights unless a release

is in compliance with the OWBPA. 29 U.S.C. § 626(f)(1). The Fifth

Circuit has held that, the plain language of the OWBPA

notwithstanding, the employee may waive ADEA rights under a

defective release if the employee does not repay the release

consideration “timely” or “shortly after discovery of the alleged

deficiency” (Appendix A-3).

24. The Fifth Circuit’s “pay back” requirement is inconsistent

with the plain language of the OWBPA and this Court’s holding in

Hogue v. Southern Ry. Co., 390 U.S. 516, 517 (1968), where a pay back

of release consideration was not required under the Federal Employers

Liability Act (“FELA”). The Fifth Circuit’s “pay back” requirement is

also squarely in conflict with the holdings of the Seventh and Eleventh

Circuits. See Oberg v. Allied Van Lines, Inc., 11 F.3d 679, 683-84 (7th

Cir. 1993) (plaintiff not required to pay back the release consideration

as a condition to filing suit where release was deficient under

OWBPA), cert. denied, 114 S. Ct. 2104 (1994); Forbus v. Sears,

Roebuck & Co., 958 F.2d 1036 (11th Cir.), cert. denied, 113 S. Ct. 412

(1992) (same).

25. Even if the “pay back” requirement is consistent with the

language of the OWBPA, the Fifth Circuit has applied it without regard

to public law concepts of equity or common law contract principles

which would allow a “reasonable” amount of time to repay the

consideration, especially taking into account (for “reasonable” time)

whether the employer’s conduct has contributed to the employee’s

inability to promptly repay the release consideration.

10

26. The combined effect of the Fifth Circuit’s position is that it

literally rewards those employers who most egregiously violate the

OWBPA, where the employee is fired without notice and without the

opportunity to find new employment, so that the employee must use the

release consideration to pay necessary living expenses. The Fifth

Circuit’s “pay back” rule fails to take into account the suddenness of

the termination, the egregiousness of the OWBPA violation, and

whether the employer’s potentially unlawful conduct impaired the

employee’s financial ability to repay the consideration.

A. The Plain Language of the Older Workers Benefit

Protection Act

27. The OWBPA limits a person’s power to waive ADEA

claims: “An individual may not waive any right or claim under this

chapter unless the waiver is knowing and voluntary.” 29 U.S.C.

§ 626(f)(1) (emphasis added).

28. The OWBPA then states that a release “may not be

considered knowing and voluntary unless at a minimum”:

(A) the waiver is part of an agreement

between the individual and the employer that is written

in a manner calculated to be understood by such

individual, or by the average individual eligible to

participate;

(B) the waiver specifically refers to rights

or claims arising under this chapter;

(C) the individual does not waive nghts

or claims that may arise after the date the waiver is

executed;

(D) the individual waives rights or claims

only in exchange for consideration in addition to

anything of value to which the individual already is

entitled;

11

(E) the individual is advised in writing to

consult with an attorney prior to executing the

agreement;

(Fi) the individual is given a period

of at least 2] days within which to consider the

agreement; or

(ii) if a waiver is requested in

connection with an exit incentive or other employment

termination program offered to a group or class of

employees, the individual is given a period of at least

45 days within which to consider the agreement;

(G) the agreement provides that for a

period of at least 7 days following the execution of

such agreement, the individual may revoke the

agreement, and the agreement shall not become

effective or enforceable until the revocation period has

expired[.]

29 U.S.C. § 626(f) (emphasis added). Subsections 626(f)(1)(B),

626(f)(1)(F)(i), and 626(f)(1)(G) are italicized because those are the

sections that ABB Vetco Gray failed to satisfy in the release presented

to Hines.

29. The OWBPA further states that, in “any dispute that may

arise” as to whether the § 626(f)(1) requirements are met, the “party

asserting the validity of a waiver shall have the burden of proving in a

court of competent jurisdiction that a waiver has been knowing and

voluntary pursuant to” § 626(f)(1) or (2). See 29 U.S.C. § 626(f)(3).

30. The Fifth Circuit’s holding clearly allows waiver under

circumstances in which the OWBPA literally denies the employee the

power to effect a waiver (Appendix A-2). Although the Fifth Circuit's

opinion below did not explain its rationale, it has previously explained

that it is not enforcing the release agreement that is deficient under the

OWBPA. See Wamsley v. Champlin Refining and Chemicals, 11 F.3d

12

534, 540 n.11 (Sth Cir. 1993), cert. denied, 115 S. Ct. 1403 (1995).

Instead, the Fifth Circuit’s rule enforces a “new promise, evidenced by

subsequent conduct, to be bound by the terms of the original waiver

agreements.” 11 F.3d at 540 n.11. Yet, the plain language of the

OWBPA requires that any agreement, old or new, must satisfy the

terms of the Act, so that the employee literally has no power to waive

the ADEA claims. See 29 U.S.C. § 626(f)(1) (employee “may not

waive” ADEA claims under release that is deficient); 29 U.S.C.

§ 626(f)(3) (party asserting “validity of waiver’ has “burden of

proving” that requirements of OWBPA were satisfied).

31. A pay back requirement was rejected by this Court in Hogue

v. Southern Ry. Co., 390 U.S. 516, 518 (1968), addressing an

improperly obtained release of FELA claims. The plaintiff in Hogue

was not required to pay back the consideration as a condition to filing

suit, and the defendant was protected through the allowance of an offset

(in the amount of the release consideration) against the plaintiff's

recovery. 390 U.S. at 518; see also Oberg v. Allied Van Lines, Inc., 11

F.3d 679, 684 (7th Cir. 1993) (same holding with ADEA & OWBPA),

cert. denied, 114 S. Ct. 2104 (1994).

¥ The Fifth’s Circuit’s “pay back” rule was developed in Blakeney

v. Lomas Information Systems, Inc., 65 F. 3d 482 (Sth Cir.), cert. denied, 116

S. Ct. 1042 (1995); Wittorf v. Shell Oil Co., 37 F. 3d 1151, 1154 (Sth Cir.

1994); and Wamsley v. Champlin Refining and Chemicals, 11 F.3d 534, 540

n.11 (Sth Cir. 1993), cert. denied, 115 S. Ct. 1403 (1995).

13

B. The Conflict Between the Circuits on the “Pay

Back” Requirement

32. The Fifth Circuit’s pay back rule” is in conflict with the

Seventh and Eleventh Circuits: Oberg v. Allied Van Lines, Inc., 11 F.3d

679, 683-84 (7th Cir. 1993), cert. denied, 114 S. Ct. 2104 (1994);

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

denied, 113 S. Ct. 412 1992); Oberg v. Allied Van Lines, Inc., 1992

U.S. Dist. LEXIS 11208, *19, 59 F.E.P. Cases 769 (N.D. Ill. 1992),

aff'd, 11 F.3d 679, 683-84 (7th Cir. 1993), cert. denied, 114 S. Ct. 2104

(1994); Isaacs v. Caterpillar, Inc., 765 F. Supp. 1359 (C.D. Ill. 1991).

33. The Seventh Circuit in Oberg v. Allied Van Lines, Inc., 11

F.3d 679, 683-84 (7th Cir. 1993), cert. denied, 114 S. Ct. 2104 (1994),

examined both the language and legislative history of OWBPA and

rejected any requirement for the plaintiff who has signed a defective

release to “tender back” the severance benefits. 11 F.3d at 683-84. The

Seventh Circuit focused on § 626(f)(1) (“an individual may not

waive”), and held that (a) the OWBPA “forbids any waiver,” and

(b) that an employee “as a matter of law” cannot “ratify” an agreement

violative of § 626(f)(1). 11 F.3d at 684.

C. The Fifth Circuit’s Rule Fails to Provide A

“Reasonable” Amount of Time to Repay the

Release Consideration

. 34. Even if the Fifth Circuit’s “pay back” rule is consistent with

the OWBPA, the Fifth Circuit’s application of that rule inexplicably

“The Fourth Circuit has agreed with the Fifth Circuit in adopting the

“pay back” rule: Blistein v. St. John’s College, 74 F.3d 1459, 1465-66 (4th

Cir. 1996) (noting split in circuits); O’Shea v. Commercial Credit

Corporation, 930 F.2d 358, 362 (4th Cir.), cert. denied, 502 U.S. 859 (1991).

14

fails to take into account what may be a “reasonable” amount of time

for the employee to repay the release consideration. The Fifth Circuit

has based its “pay back” rule on common law contract principles,

Wamsley v. Champlin Refining and Chemicals, 11 F.3d 534, 540

nn.10&11 (Sth Cir. 1993), cert. denied, 115 S. Ct. 1403 (1995), yet

those contract principles would clearly allow a plaintiff a “reasonable”

amount of time to repay the consideration, and the defendant’s behavior

or misbehavior would be taken into account on what constitutes a

“reasonable” time.

35. The Restatement of Contracts addresses when a party

seeking rescission must repay consideration for a contract, and

expresses the requirement in terms of a “reasonable” amount of time.

RESTATEMENT (SECOND) OF CONTRACTS § 381 (1978). The

Restatement states that a number of factors should be considered in

determining what constitutes a “reasonable” amount of time, including

whether the delay may have resulted in justifiable reliance by the

defendant, whether the ground for avoidance was the result of fault by

either party, and whether the defendant’s conduct contributed to the

delay. See RESTATEMENT (SECOND) OF CONTRACTS § 381(3)(b)-(d)

(1978).

Vi. Conclusion

36. The petition for a writ of certiorari should be granted.

15

Respectfully submitted,

COLIN B. AMANN

DREW M. CAPUDER

CAPUDER, GAITHER & AMANN, L.L.P.

500 Dallas, Suite 1000

Houston, Texas 77002-4804

(713) 654-7455 (Telephone)

(713) 654-8711 (FAX)

Counsel of Record for Petitioner

A-1

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 95-40805

Summary Calendar

CHARLES HINES,

Plaintiff-Counter

Defendant-Appellant,

versus

ABB VETCO GRAY, INC.,

Defendant-Counter

Claimant-Appellee,

Appeal from the United States District Court

for the Southern District of Texas

(G-95-CV-215)

Before REAVLEY, SMITH and PARKER, Circvit

Judges.

PER CURIAM, *

Hines sued ABB Vetco Gray, Inc. (Vetco) for

age discrimination a year and a half after his

termination.” Because Hines had signed a waiver

agreement which explicitly waived any claims

for age discrimination and because Hines had

failed to "tender back" the consideration paid

by Vetco for the waiver in a timely manner, the

district court granted a summary judgment for

Vetco.

Hines appeals.

® Pursuant to Local Rule 47.5, the court has determined

that this opinion should not be published and is not

precedent except under the limited circumstances set

forth in Local Rule 47.5.4.

Y €9m 29 U.8.c. §$ § 622 gt. seq. (Age

Discrimination in Employment Act of 1967); Tex. Lab. Code

Ann. § 21.001 et. seq. (Texas Commission on Human Rights

Act).

A-2

Waiver agreements failing to meet the

requirements of the Older Workers Benefits

Protection Act of 1990 are voidable at the

election of the terminated individual.* We have

held that failure to “tender back" the

consideration paid in exchange for the waiver

of specified claims in a timely manner

precludes a suit on those claims by the

terminated employee.*’ Hines requests that we

overrule such precedent and follow contrary

decisions from other circuits.* However, prior

panel opinions are binding precedent on

subsequent panels absent action by the court en

banc, the Supreme Court, or the legislature.”

Next, Hines asserts that he unconditionally

tendered the money to Vetco. His

"unconditional tender" occurred in his Original

Answer to Vetco's Counterclaim where he

stipulated that any recovery on his suit should

be offset by the severance agreement, or in the

event that he did not recover any money, the

district court should enter a judgment against

him in the amount of the severance agreement.

Hines argument is unpersuasive. Such a reading

would render our "tender back" rule

meaningless, permitting employees to retain the

* Blakeney v. Lomas Information Systems, Inc., 65

F.3d 482 (Sth Cir. 1995) cert. denied, 116 S.Ct. 1042

(1995); Wittorf v. Shel) Oi) Co., 37 F.3d 1151, 1154 (Sth

Cir. 1994); Wamsley v. Champlin Refining & Chemicals,

Inc., 11 F.3d 534, 539 (Sth Cir. 1993), cert. denied, 115

$.Ct. 1403 (1995); gee 29 U.S.C. § 626(£)(1) (Older

Workers Benefits Protection Act).

¥ Blakeney, 65 F.3d at 485; Wittorf, 37 F.3d at

1154; Wamsley, 11 F.3d at 539.

* See Oberg v. Allied Van Lines, Inc., 11 F.3d 679

(7th Cir. 1993), cert. denied, 114 S.ct. 2104 (1994);

Forbus yv. Sears, Roebuck €& Co., 958 F.2d 1036 (lith

Cir.), cert. denied, 113 $.Cct. 412 (1992).

* _ Lefarge Corp. v. Hartford Cas. Ins. Co., 61 F.3d

389, 403 (Sth Cir. 1995).

A-3

benefits of their bargain while at the same

time not upholding their end of the bargain --

waiving their right to sue.

Finally, Hines disputes the district court's

finding that he "did not even attempt to

rescind [the waiver agreement] until nearly two

years after he signed the contract, at which

point [(Hines's]) opportunity to avoid the waiver

agreement had long since lapsed."*’ Hines argues

that a mere four months passed between the date

he learned the waiver agreement was voidable

when Vetco raised the defense and the date the

district court granted Vetco's summary

judgment.

To properly rescind the contract, Hines had

to “restore the status quo ante," and the

recision “had to occur. shortly after the

discovery of the alleged deficiency." on

September 5, 1995, Hines filed a Motion for

Continuance on Vetco's Motion for Summary

Judgment requesting an additional two weeks to

“finalize the transaction whereby he [was]

raising the funds." The district court denied

Hines's motion on the basis that, even if it

granted the motion, Hines's attempt at recision

was too late.* Hines's efforts to rescind the

contract did not occur "shortly after the

discovery of the alleged deficiency."* Hines's

Motion for Continuance came almost two years

after he was terminated, six months after he

filed suit, and four months after Vetco

notified him of their intention to rely upon

the waiver agreement as a defense. The

district court did not err in granting Vetco's

© Dist. Ct. Op. p. 5

2 Blakeney, 65 F.3d at 485.

e Diet. GC. Ge. wp. 6, Bi.

® Blakeney, 65 F.3d at 485.

A-4

summary judgment. +’

AFFIRMED.

U.S. COURT OF APPEALS

FILED

APRIL 29, 1996

CHARLES R. FULBRUGE III

CLERK

- Blakeney, 65 F.3d at 482 n.3 (a tender which came

“twenty-two months after termination, eight months after

filing suit, and seven months after [the company's)

motion for summary judgment alerted them to the waiver

defense" was too late).

B-1

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

GALVESTON DIVISION

CHARLES HINES %

§

vs. § CIVIL ACTION NO. G-95-215

§

ABB VETCO GRAY ,

INC. §

ORDER

Plaintiff, Charles Hines, commenced the

instant action on April 18, 1995, alleging age

discrimination action in violation of the Age

Discrimination in Employment Act of 1967

("ADEA"), 29 U.S.C.A. § § 621-34 (West 1985 &

Supp 1995), and the Texas Commission on Human

Rights Act ("TCHRA"), Tex. Lab. Code Ann. § §

21.001-.306 (Vernon 1995). Defendant, ABB

Vetco Gray, Inc., filed a timely answer and

counterclaim for breach of a waiver agreement

prohibiting Plaintiff from commencing the

instant suit. Now before the Court is

Defendant's Motion for Summary Judgment on

Plaintiff's claims and Defendant's counterclaim

and for Rule 11 sanctions. Also before the

Court is Plaintiff's Motion for a Continuance

of consideration of Defendant's Motion.

Defendant's Motion is GRANTED in part and

DENIED in part. Plaintiff's Motion is DENIED.

I. STANDARD OF REVIEW

Summary judgment is appropriate is there is

no genuine issue of material fact and the

moving party is entitled to judgment as a

matter of law. rea. BR. Civ. BP. SEC). A

genuine issue of material fact exists if there

is a genuine issue for trial that must be

decided by the trier of fact. Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 248, 106

S.Ct. 2505, 2510, 91 L.Ed.2d 538 (1986). When

deciding a motion for summary judgment, the

Court must accept the evidence of the nonmoving

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party and draw all justifiable inferences in

that party's favor. Determining credibility,

weighing evidence, and drawing reasonable

inferences are left to the trier of fact.

Anderson, 477 U.S. at 255, 106 S.Ct. at 2513.

Under Rule 56, the moving party bears the

initial burden of "informing the district court

of the basis for its motion, and identifying

those portions of [the record] which it

believes demonstrate the absence of a genuine

issue of material fact." Celotex Corp. v.

Catret:, 477 U.S. 337, 323, 106 &.Ct. 2548,

2553, 91 L.Ed.2dad 265 (1986); see also Fed. R.

Civ. P. 56(c). The burden then shifts to the

nonmoving party to establish the existence of a

genuine issue for trial. Matsushita Elec.

Indus, Co, v. Zenith Radio, 475 U.S. 574, 585-

87, 106 §.Ct. 1348, 1355-56, 89 L.Ed.2d 538

(1986); Wise v. E.I. Dupont De Nemours & Co.,

58 F.3d 193, 195 (5th Cir. 1995). Once the

moving party meets its Rule 56 burden, the

nonmovant "must do more than simply show that

there is some metaphysical doubt as to the

material facts....[{T]he nonmoving party must

come forward with “specific facts showing that

there is a genuine issue for trial.'"

Matsushita, 475 U.S. at 586-87, 106 S.Ct. at

1356 (quoting Fed. R. Civ. P. 56(e)). Summary

judgment should be granted only if the evidence

indicates that a reasonable fact-finder could

not find in favor of the nonmoving party.

Anderson, 477 U.S. at 248, 106 S.Ct. At 2510;

see also Matsushita, 475 U.S. at 587, 106 S.Ct.

at 1355-56.

II. BACKGROUND

Defendant terminated Plaintiff's employment

on September 30, 1993. On the day of his

discharge, Plaintiff met with Sharon Clarkson,

Director of Human Resources at ABB Vetco Gray

Inc., to discuss the details of his departure.

During this meeting, Ms. Clarkson presented

Plaintiff with a written agreement which

purported to grant him a severance package

consisting of eight weeks of salary, continued

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group health and life benefits for sixty days,

and three months of individual out-placement

counseling in exchange for a waiver of legal

claims against Defendant and Plaintiff's

promise to cooperate in an orderly transition.

The waiver provided, in relevant part:

As material inducement for ABB Vetco

Gray Inc. To enter into this letter

agreement,...you hereby release and

forever discharge ABB Vetco Gray

Inc....from any and all

liability...arising out of or

relating to your employment with ABB

Vetco Gray Inc., including, but not

limited to, ...any claim of rights

under any federal, state or local

laws prohibiting age or other forms

ef discrimination (including...the

Age Discrimination in Employment Act,

29 U.S.C. § 621, et seg., and the

Texas Commission on Human Rights

Act).

Ms. Clarkson, who signed the agreement on

Defendant's behalf, advised Plaintiff that he

must sign the agreement immediately or

Defendant's offer to enter into the agreement

would be withdrawn. Plaintiff affixed his

signature at the bottom of the agreement

following the words "I have read and understand

the provisions of this letter agreement and I

accept its terms."

Approximately five weeks later, Plaintiff

filed complaints of age discrimination with the

Equal Employment Opportunity Commission and the

Texas Commission on Human Rights. During the

proceedings before the respective Commissions,

he obtained the services of his present

attorney. Plaintiff did not, however, attempt

to avoid the waiver while the administrative

proceedings were pending by returning the

consideration he received under the waiver

agreement. Rather, he chose to wait nearly two

years after signing the waiver agreement before

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even expressing an intention to return the

monetary part of his severance package to

Defendant, and, as indicated by the record now

before the Court, Plaintiff still has not

actually made any funds actually available.

III. ANALYSIS

< ve incieetal 4 Dj aE nated “lai

Defendant does not dispute Plaintiff's

ability to establish a prima facie case of age

discrimination under the ADEA or the TCHRA.

Instead, Defendant argues that the waiver

agreement of September 30, 1995, bars Plaintiff

from litigating his claims. Specifically,

Defendant contends that, although the waiver

agreement admittedly violates the Older Workers

Benefits Protection Act of 1990 ("OWBPA"), 29

U.S.C. § 626(f) (1) (West Supp. 1995), Plaintiff

is now bound to the terms of the agreement

because he ratified it by failing to return the

consideration he received.

Waiver agreements failing to meet the

requirements of the OWBPA are voidable at the

election of the terminated individual. Wamsley

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

534, 539 (5th Cir. 1993), cert. denied, 115

S.Ct. 1403, 131 L.Ed.2d 290 (1995); see also

OWBPA, 29 U.S.C.A. § 626(f). But, as appalling

as allegations of age discrimination are, and

as much as the Court frowns on employers who

obtain waivers in violation of the OWBPA, an

employer is entitled to rely on the validity of

such waivers in the absence of timely conduct

taken by the terminated employee to avoid the

contract. "A party cannot be permitted to

retain the benefits received under a contract

and at the same time escape the obligations

imposed by the contract." Grillet _v. Sears,

Roebuck & Co., 927 F.2d 217, 220 (5th Cir.

1991). To the contrary, a party is deemed to

have ratified a waiver agreement if he has

retained all of the contractual benefits he

received under the agreement for an

B-5

“unreasonably long period of time." id. at

220-21; see also Wamsley, 11 F.3d at 540

(explaining the failure to return benefits paid

under a voidable waiver contract manifests an

intention to be bound by the waiver). To avoid

ratification of the contract, the party must

“attempt to restore the status quo ante...soon

after" discovering that the waiver agreement is

voidable. Grillet, 927 F.2@ at 220-21

(emphasis added).

In the instant case, Plaintiff's attempt to

avoid the waiver agreement is unsuccessful for

two reasons. First, it was untimely.

Plaintiff did not even attempt to rescind until

nearly two years after he signed the contract,

at which point Plaintiff's opportunity to avoid

the waiver agreement had long since lapsed.

Second, Plaintiff's attempt to avoid the waiver

agreement was inadequate. Plaintiff never

actually attempted to return the monetary

consideration he received to Defendant, and by

his own admission is still presently unable to

do so.” Plaintiff's offer to tender funds to

Defendant at some point in the future on the

mere expectation that he will indeed "finalize

(a] transaction whereby he is raising the

funds" does not constitute a satisfactory

attempt to restore the status quo ante. See

“ie. S68

930, 937 (Sth Cir.,), cert. denied, 115 S. Ct.

582, 130 L.Ed.2d 497 (1994). Having found

Plaintiff's offer to be both untimely and

inadequate, the Court must regretfully conclude

that Plaintiff has ratified the waiver

agreement he signed on September 30, 1993, and

accordingly is barred from maintaining his age

‘The Court notes that even if Plaintiff were given

an additional two weeks to raise funds as requested in

his Motion for Continuance of Consideration of

Defendant's Motion for Summary Judgment, Plaintiff's

untimeliness would still prove fatal to his attempt to

avoid the waiver agreement. See Grillet, 927 F.2d at

220-21.

B-6

discrimination claims. consequently,

Defendant's Motion for Summary Judgment is

GRANTED insofar as it seeks to dismiss

Plaintiff's age discrimination claims.

B. Defendant's Counterclaim for Breach of

Contract

Plaintiff's liability for breaching the

waiver agreement turns on the intent manifested

by the parties. lLubrizo)] Corp. vy. Exxon Corp.,

9587. F.2€ 1302, 13083 {Sth Cir.) (quoting

Artvale, Inc. v. Rugby Fabrics Corp., 363 F.2d

1002, 1008 (2d Cir. 1966)), cert. Denied, 113

S. Ct. 286, i123 db. Ba. 26334. (99a) x In the

absence of evidence to the contrary,

contractual covenants not to sue are construed

as imposing liability only for suits brought in

bad faith. Lubrizol, 957 F.2d at 1306 (quoting

Artvale, 363 F.2d at 1008). But see Widener v.

Arco Oil

& Gas Co., 717 F. Supp. 1211, 1217 (N.D. Tex

1989) (imposing liability without considering

whether plaintiffs acted in bad faith). As

Judge Friendly stated in Artvale,

Certainly it is not beyond the powers

of a lawyer to draw a covenant not to

sue in such terms as to make clear

that any breach will entail liability

for damages, including the most

certain of all -- defendant's

litigation expense. Yet to distill

all this out of the usual formal

covenant would be going too far; its

primary function is to serve as a

shield rather than as a sword... .

Artvale, 363 F.2d at 1008; see also Lubrizol,

957 F.2d at 1306.

In the instant case, the record lacks

evidence of Plaintiff's bad faith in

instituting claims of age discrimination. To

the contrary, Defendant concedes Plaintiff's

j

3

B-7

ability to establish a prima facie case for

purposes of the current motion, and Plaintiff

vigorously contests the validity of the waiver

agreement. The Court accordingly finds that

Defendant is not entitled to damages for

Plaintiff's breach of the waiver agreement. As

is appropriate under the present circumstances,

the Court GRANTS summary judgment for Plaintiff

sua sponte on Defendant's counterclaim. See In

864 F.2d

388, 393 (Sth Cir. 1989) ("(W)jhen “one party

moves for summary judgment the district court,

in an appropriate case, may grant summary

judgment against the movant, even though the

opposite party has not actually filed a motion

for summary judgment.'" (quoting Landry v.

G.B.A. 762 F.2d 462, 464, (5th Cir. 1985)

(citing C. Wright, A. Miller & M. Kane, Federal

Practice & Procedure: Civil 2d § 2720 at 33)),

cert. denied, 497 U.S. 1010, 110 S.Ct. 3254,

111 L.Ed.2d 763 (1990).

C. Defendant's Motion for Rule 11 Sanctions

Defendant's basis for requesting sanctions

pursuant to Rule 11 is the allegedly "clearly

groundless" nature of Plaintiff's suit. Rule

11 provides, in relevant part*: "claims,

defenses, and other legal contentions therein

¥ The Court specifically calls to Defendant's

attention the current, proper procedure for moving for

Rule 11 sanctions, which incorporates the "safe harbor"

provision:

A motion for sanctions under this rule shall be

made separately from other motions or requests

and . . . shall not be filed with or presented

to the court unless, within 21 days or after

service of the motion (or such other period as

the court may prescribe), the challenged paper,

claim, defense, contention, allegation or denial

is not withdraw or properly corrected."

Fed. R. Civ. P. 11(c)(1)(A) (emphasis added).

B-8

{shall be] warranted by existing law or by a

nonfrivolous argument for the extension,

modification, or reversal of existing law or

the establishment of new law." Fed. R. Civ. R.

11(b) (2). The Court finds that Plaintiff has

not run afoul of this standard. See Business

suid lk ~} tj fonts

Enters., Inc., 498 U.S. 533, 540-51, 111 S. Ct.

922, 928-33, 112 L.Ed.2a 1140, 1152-59 (1991).

Consequently, Defendant's Motion for Rule i11l

Sanctions is DENIED.

IV. CONCLUSION

For the reasons stated above, the Court

finds that Defendant's Motion for Summary

Judgment is GRANTED insofar as it seeks to

dismiss both of Plaintiff's claims and is

DENIED insofar as it seeks relief pursuant to

its counterclaim for breach of contract.

Plaintiff's claims and Defendant's counterclaim

are hereby DISMISSED WITH PREJUDICE.

Defendant's Motion for Rule 11 Sanctions and

Plaintiff's Motion for a Continuance on

Defendant's Motion are both DENIED. Each party

is to bear his or its own taxable costs and

expenses incurred herein to date.

IT IS SO ORDERED.

DONE this 14th day of September, 1995, in

Galveston, Texas.

/s/ SAMUEL B. KENT

UNITED STATES

DISTRICT JUDGE

United States District Court

Southern District of Texas

ENTERED

SEPTEMBER 15, 1995

Michael N. Milby, Clerk of Court

C-1

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

GALVESTON DIVISION

CHARLES HINES §

§

vs. § CIVIL ACTION NO. G-95-215

§

ABB VETCO GRAY §

INC. §

FINAL JUDGMENT

For the reasons set forth in the Order

issued by the Court this date, the Court GRANTS

Defendant's Motion for Summary Judgment insofar

as it seeks to dismiss Plaintiff's claims and

DENIES Defendant's Motion for Summary Judgment

insofar as it seeks relief pursuant to its

counterclaim for breach of contract.

Consequently, the Court DISMISSES each and all

of Plaintiff's claims WITH PREJUDICE and

DISMISSES Defendant's counterclaim WITH

PREJUDICE.

The Court DENIES Defendant's Motion for Rule

11 Sanctions and DENIES Plaintiff's Motion for

a Continuance on Defendant's Motion.

All parties are ORDERED to bear their own

taxable costs and expenses incurred herein to

date.

THIS IS A FINAL JUDGMENT.

IT IS SO ORDERED.

DONE this 14th day of September, 1995, at

Galveston, Texas.

/s/SAMUEL B. KENT

UNITED STATES DISTRICT

JUDGE

C-2

United States District Court

Southern District of Texas

ENTERED

SEPTEMBER 15, 1995

Michael N. Milby, Clerk of Court

D-1

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

GALVESTON DIVISION

CHARLES HINES,

; Plaintiff,

| V. CIVIL ACTION NUMBER

. G-95-215

ABB VETCO GRAY, INC.,

JURY

Defendant.

AFFIDAVIT OF CHARLES HINES

THE STATE OF TEXAS

§

§

COUNTY OF HARRIS §

A II Es BE ae I OR Ps eh Rk Ce: be Pe

BEFORE ME, the undersigned authority, on this day

personally appeared Charles Hines, who, being known to me and

duly sworn, upon oath deposed and stated as follows:

l. My name is Charles Hines. I am of sound mind,

am capable of making this affidavit, and am fully

competent to testify to the matters stated in this

affidavit. I have personal knowledge over each of

the matters stated in this affidavit, and each of the

matters stated in this affidavit is true and correct.

; 2. On September 30, 1993, I was and had been an

) employee of ABB Vetco Gray, Inc. (“ABB

Vetco”’) for 5 years, and for the last 3 years I had

D-2

been “General Foreman of Valve and Wellhead

Control for Service Products.”

For the 5 years at ABB Vetco, I had received

annual reviews rating me as “excellent,” and

after each year I received a 5% raise. As of

September 30, 1993, profitability for my

department was at a 5-year high, manufacturing

methods had been made more efficient (less

expensive), and deliveries were being made on

time. These were important criteria for

evaluating the success of my department, and

none of these factors or statistics gave me any

indication that my job was in jeopardy. I had not

been approached about leaving the company

before September 30, 1993, and I had made no

efforts to leave the company.

In the moming of September 30, 1993, Bob

McNamara, my boss at ABB Vetco, came into

my office and told me that I was being laid off.

I was in shock at that news, because Mr.

McNamara had only recently reviewed me and

gave me an “excellent” rating (with a 5% raise).

Mr. McNamara walked me into the office of

Sharon Clarkson, who I understand was head of

human resources at ABB Vetco. When Mr.

McNamara and I walked into Ms. Clarkson’s

office, she had documents prepared, I soon

learned, that assumed I was being fired. She had

prepared on her desk a package of materials

relating to benefits and a letter which I

eventually signed while in her office. A copy of

that letter is attached as Attachment | to this

affidavit. Attachment | is the same document as

is attached to Defendant’s Motion for Summary

Judgment. Attachment | was therefore already

prepared, and already contained Sharon

D-3

Clarkson’s signature, when Mr. McNamara and

T walked into her office.

When I was in Ms. Clarkson’s office with Mr.

McNamara, I expressed my shock about being

fired, and I discussed the fact that profitability

and efficiency were “up”, and neither Mr.

McNamara nor Ms. Clarkson responded except

to say there was nothing they could do, and Ms.

Clarkson then explained the severance package

that ABB Vetco could offer, “today,” “right

now” and that it would be withdrawn if I did not

accept it. They had already made it clear to me

that I was being fired effective immediately, so

If I did not accept the severance package, I

would be forced to leave immediately and would

not even receive notice or pay in lieu of notice:

but if I accepted the severance package, I would

be paid for about 8 weeks (6 weeks for

“severance” pay, and 2 weeks for pay in lieu of

notice).

Ms. Clarkson pointed to the first page of

Attachment | and explained what the company

was offering me “right now’, and she then

tumed over to the second page (containing what

I now understand is a release of employment

discrimination claims), and she pointed to the

signature line and stated that they would need

my signature “right here” in order for me to get

my severance check. Neither she nor Mr.

McNamara at that time explained that I was

being asked to release claims against ABB

Vetco, and no employee or representative of

ABB Vetco ever told me that.

I signed Attachment 1 and was given my

severance check the next day. I picked up the

severance check from Ms. Clarkson’s office, and

she did not then or ever tell me that I had

10.

ll.

12.

D-4

released the company from employment

discrimination claims.

As of the time I signed Attachment | to this

affidavit, I had not asserted any claim in any

form of employment discrimination (including

age discrimination) against ABB Vetco.

Attachment 1, to the extent that it contains a

release, was not in response to any charge,

claim, or allegation that I have made. Indeed, I

thought my status with the company was secure,

and had not received any criticism which might

have suggested to me that I was going to be

fired.

I was not advised by ABB Vetco in connection

with the release to consult with an attorney, I

was not given 21 days to consider the proposed

release agreement, and I was not advised that I

could revoke the agreement within 7 days after

signing it. No one employed by or representing

ABB Vetco told me any of these things, and I

was not informed of any of things in writing by

anyone employed by or representing ABB

Vetco.

When I signed Attachment 1, I did not

understand that it was a “release” of

employment discrimination claims. Instead, as I

could determine from quickly reading it when

Ms. Clarkson presented me with the “today

only” severance package, I thought Attachment

1 addresses what obligations the company might

have concerning pay and benefits, and I thought

Attachment | was indicating that the company

would owe me no more money for salary,

vacation pay, benefits, and the like.

The first time I understood that anyone

contended that I “released” or “waived” any

2 a ee re ote iy

13.

14.

D-5

employment discrimination claims was when

ABB Vetco filed its answer and counter-claim

against me after my lawyers filed suit on my

behalf, and I then learned of ABB Vetco’s claim

conceming a release in late June of 1995. While

my charge was pending at the Equal

Employment Opportunity Commission

(“EEOC”), no one with the EEOC informed me

that ABB Vetco contended that I could not

assert a claim because of a “release” or other

document.

The first time I understood that I had any right

under the law to attack the “release” which ABB

Vetco contends bars my employment

discrimination claims was in late June of 1995

when I received a copy of ABB Vetco’s answer

and counterclaim from my attorney. No one had

ever before told me or communicated to me that

I had any right to “void” or “rescind” or dispute

the validity of the release upon which ABB

Vetco is relying. Since learning in late June of

1995 that I might have a right to dispute the

validity of the “release,” I have tried but have

been unable to raise the money to repay ABB

Vetco for the “severance” money that I was paid

the day after I was presented with Attachment 1.

However, I have not been able to afford to pay

the severance money back, and I have thus far

not succeeded in borrowing the necessary

money. I am currently in the process of trying to

raise the money, and it is likely that I will have

an answer on September 5, 1995, as to whether

I will be able to borrow the necessary money.

When I was confronted with the decision of

signing Attachment | in Ms. Clarkson’s office,

I knew that losing my job, and receiving no

severance pay, would be a financial disaster for

me and my wife. My wife was then making

15.

16.

D-6

about $600-800 per month doing part-time

secretarial work, and she was under continuing

care for breast cancer, for which she had surgery

and follow-up surgery caused by complications.

My household’s fixed expenses were

approximately $2,800 per month, so losing my

job raised the prospect of bankruptcy, losing my

home, and losing my health insurance benefits

for my wife’s follow-up treatment for breast

cancer.

I was replaced at ABB Vetco by Mr. Young,

who I understand was under 40 years of age.

As to the money that I received as my

“severance package” when I was fired

(approximately $8,500). My wife and I used that

money for various household and living

expenses after being fired from ABB Vetco.

After losing my job with ABB Vetco, I was

completely unemployed for various periods of

time, and used the severance money for living

expenses. Because of that, when I learned this

year about ABB Vetco claiming that I had

released the claims I am asserting in this

lawsuit, I did not have over $8,000 to return the

money to ABB Vetco. I am in the process of

trying to raise the necessary money to repay

ABB Vetco.

/s/ CHARLES HINES

Charles Hines

D-7

SWORN TO AND SUBSCRIBED BEFORE ME this 2nd

day of September, 1995, to certify which witness my hand and seal

of office.

/s/ DIANE LEFFINGWELL

Notary Public in and for

The Stateof TEXAS

/s/(DIANNE LEFFINGWELL

(Printed or Typed Name of Notary)

05/02/96

(Commission Expiration Date)

D-8

ABB Vetco Gray, Inc.

September 30, 1993

Mr. Charles A. Hines

15210 Ringfield

Houston, Texas 77084

Dear Chuck:

This letter is to reflect our agreement concerning your

departure from ABB Vetco Gray Inc. Your last day of

employment shall be September 30, 1993.

We have agreed that you will receive a lump sum gross

payment based on your current salary of $4,631.00 per

month, which represents the following:

_6 weeks severance pay

_2.. ~=weeks pay in lieu of notice

hours of remaining 1993 vacation

hours of accrued vacation for 1994

You will receive three months individual out-placement

counseling. Your group health and life benefits will continue

for sixty (60) days following the date of your termination.

Following that period, you will be entitled to benefits as

mandated by COBRA.

In recognition and consideration of the foregoing, you have

agreed to cooperate in an orderly transition. You agree to

maintain in confidence and not disclose fo others any

we pow

a a ek ee ee ee ee a ne ee Stee ee ee Fey Spots

OMe lle Hane” ni litt elle» das taben

D-9

confidential or proprietary information relating to the

business, customers, personnel, and products of ABB Vetco

Gray Inc.

As a material inducement for ABB Vetco Gray Inc. to enter

into this letter agreement, and except for specific obligations

of ABB Vetco Gray Inc. contained in this letter agreement,

you hereby release and forever discharge ABB Vetco Gray

Inc. and all of its employees, officers, and directors, from any

and all liability and every claim, demand, or cause of action,

past, present, and future, of every kind and character

whatsoever, in any manner, arising out of or relating to your

employment with ABB Vetco Gray Inc., including, but not

limited to, any claim arising out of contract or tort, and any

claim of rights under any federal, state, or local laws

prohibiting age or other forms of discrimination (including

Title Vil of the Civil Rights Act of 1964, 42 USC §2000e, ef

seq., the Age Discrimination in Employment Act, 29 USC

$621, et seg., and the Texas Commission on Human Rights

Act), whether such claim is now known or unknown.

if the terms and conditions of this letter agreement are

acceptable to you, please acknowledge your agreement by

executing this letter in the space provided below.

ABB VETCO GRAY INC.

/s/SHARON L. CLARKSON

Sharon L. Clarkson

Director of Human Resources

| have read and understand the provisions of this letter

agreement and | accept its terms.

09-30-93 /s/ CHARLES A. HINES

Date Charles A. Hines