Opposition Brief — Hines v. ABB Vetco Gray, Inc.

; SIrLED

4) DEC 4 1996

No. 96-546 CLERK

In The

Supreme Court of the United States

+

October Term, 1996

CHARLES HINES,

Petitioner,

vs.

ABB VETCO GRAY, INC.,

Respondent.

On Petition for Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

RESPONDENT’S BRIEF IN OPPOSITION

LAWRENCE J. MCNAMARA

Counsel of Record

PAUL G. NASON

R. JEFFREY WORTH

LIDDELL, SAPP, ZIVLEY,

HILL & LABOON, L.L.P.

Attorneys for Respondent

2200 Ross Avenue

Suite 900

Dallas, Texas 75201

(214) 220-4800

70052

utz

(800) 3 APPEAL + (800) 5 APPEAL + (800) BRIEF 21 Arges

i

QUESTION PRESENTED

Whether a plaintiff may challenge a release of an Age

Discrimination in Employment Act claim while retaining the

consideration paid to him for the release of such claim, where

that release failed to comply with the Older Workers Benefit

Protection Act, or whether such retention constitutes effective

common law ratification.

ao

ii

PARTIES TO THE PROCEEDING

Petitioner, appellant below, is Charles Hines. Respondent,

appellee below, is ABB Vetco Gray, Inc. Pursuant to Supreme

Court Rule 29.1, Respondent discloses that the parent companies

of Respondent ABB Vetco Gray are ABB Oil and Gas USA Inc.,

a Delaware corporation, Asea Brown Boveri AS, a Norwegian

company, and ABB Asea Brown Boveri Ltd., a Swiss company.

ABB Vetco Gray’s subsidiaries (other than wholly owned

subsidiaries) are ABB Holdings Limited (England), ABB Vetco

Gray Kazakhstan, PT Vetco Gray Indonesia, and PT Aisabayu

Berkak (Indonesia).

ili

TABLE OF CONTENTS

Page

UE Ses oe RS i

Parties to the Proceeding ......................... ii

ee 8 iii

Se ce Pee ie iV

MOM ooo... |

Reasons for Denying the Writ ..................... l

I. The Fifth Circuit’s tender back rule is consistent

with the language of the Older Workers Benefit

MESSI TS gS Fiera 2

II. This Court’s decision in Hogue v. Southern Ry. Co.

does not invalidate the Fifth Circuit’s tender back

I ee ee eS 8

Ill. The Fifth Circuit’s tender back rule, as followed

by the courts below, is correct as a matter of policy.

Te ACC ECGS CL KON 6 oe BERS cic ccc... 14

IV. There is no active conflict between the circuits.

RUMEN R EEC N hs oA. occ e oye dines cca sn., 16

iv

Contents

Page

TABLE OF CITATIONS

Cases Cited:

Anselmo v. Manufacturers Life Ins. Co., 771 F.2d 417

Ce tts SOP) bo ca cean> ons cic cawindbekehuasee -

Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S.

SOU RUPAS 6444000004641 se kee LEe cee 7

Atchison, Topeka & Santa Fe Ry. Co. v. Buell, 480 U.S.

PEE COTE 44 i 5bn db hdd Ed Coda kee dEe ees RAE ee 10, 11

Biggins v. Hazen Paper, Co., 507 U.S. 604 (1993) ..... 12, 13

Blisten v. St. John’s College, 74 F.3d 1459 (4th Cir. 1996)

PPE ey ees ee Oe ee ee Tee 4,5, 14, 18, 19

Cumberland & Ohio Co. of Texas, Inc. v. First American

Nat’! Bank, 936 F.2d 846 (6th Cir. 1991), cert. denied,

See Shas: Wee CESEED ‘cee kde deh et yanetisauees 3,4

Deren v. Digital Equip. Corp., 61 F.3d 1 (1st Cir. 1995)

Ss eb Sb kbs £40 SAO DORAN ES 6 0es CARRERE OAUT ER EAO 18

DiBiase v. SmithKline Beecham Corp., 48 F.3d 719

(3rd Cir.), cert. denied, 116 S. Ct. 306 (1995) ...... 12

DiRose v. PK Management Corp., 691 F.2d 628 (2d

Cir. 1982), cert. denied, 461 U.S. 915 (1983) ...... 4

Contents

Page

EEOC v. Francis W. Parker Sch., 41 F.3d 1073 (7th Cir.

1994), cert. denied, 115 S. Ct. 2577 (1995) ....... 12

EEOC v. Sara Lee Corp., 923 F. Supp. 994 (W.D. Mich.

SRS a 56 a Wad bs oN 5 0 Seek S i Biles bab weak 18, 19

Ellis v. United Airlines, Inc., 73 F.3d 999 (10th Cir.),

cert. denied, 116 S. Ct. 2500 (1996) ............. 12

Fleming v. United States Postal Service AMF O’Hare,

27 F.3d 259 (7th Cir. 1994), cert. denied, 115 S. Ct.

TOR CEE Aika dee Bek CRS ee CS 4, 15, 16, 17, 18

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

cert. denied, 506 U.S. 955 (1992) ......... 4,9, 16, 17, 18

Griffin v. Kraft General Foods, Inc., 62 F.3d 368 (11th

Sls ROE cha ces ek ered phos cee Tees aes 6

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

ROED. Sivek boas COR be Hehe hdd besa ke 4,18

Hodge v. New York College of Podiatric Medicine, 1996

Wie Soe ae Le he FO Aiko hoa kde oukesanes 18

Hogue v. Southern Ry. Co., 390 U.S. 516 (1968) .....

eves Cee CdNede bens Fen eens bane 2,8, 9, 10, 11, 13, 18

In re Boston Shipyard Corp., 886 F.2d 451 (ist Cir. 1989)

vi

Contents

Page

Isaacs v. Caterpillar, Inc., 765 F. Supp. 1359 (C.D. Ill.

IDPEY vnc ccin babe nce dcks baba Coekeeeene Real 9, 14, 15

Kernan v. American Dredging Co., 355 U.S. 426 (1958)

TE ee eT ee ne PTY ES Peery ee ee Ta 10

Lisek v. Norfolk and Western Ry. Co., 30 F.3d 823 (7th

Cir. 1994), cert. denied, 115 S. Ct. 904 (1995) ..... 11

Long v. Sears, Roebuck & Co., 1996 WL 94537 (E.D.

PO, LOBED iin G.bs 0 icncwnin's da deed paceeenn 18

Lyon v. Ohio Educ. Ass'n & Prof’l Staff Union, 53 F.3d

Ren CG Se SR sa ain keh Kee eee 12

McKennon vy. Nashville Banner Pub. Co., 115 S. Ct. 879

CRTC ao 00:6 0) 0 b4. so LAW caw ke bb iee eee eee 6

Mobil Oil Corp. v. Higinbotham, 436 U.S. 618 (1978)

PPT VRE TE Sy eee ee Pe eee es 7

Morta v. Korea Ins. Corp., 840 F.2d 1452 (9th Cir. 1988)

oo s whine 60a PbS We Mee Wee ea end REESE ES CR ReeE 3

Norfolk Redevelopment & Housing Auth. v. Chesapeake

& Potomac Tel. Co. of Virginia, 464 U.S. 30 (1983)

7

eeeeevreeveeeereeeveeeeeeeeeeeeeevneeeeeeeeeeeeeeee

Oberg v. Allied Van Lines, Inc., 11 F.3d 679 (7th Cir.

1993), cert. denied, 114 S. Ct. 2104 (1994) ..... 4,9, 16, 19

vii

Contents

Page

Occidental Life Ins. Co. of California v. EEOC, 432 U.S.

TTD iis cb ob 0-5 60s ee Piwkind USS RAS ho Oe kA 6,7

O'Shea v. Commercial Credit Corp., 930 F.2d 358 (4th

Cir.), cert. denied, 502 U.S. 859 (1991) ........... 4,18

Ott v. Midland-Ross Corp., 523 F.2d 1367 (6th Cir. 1975)

Pain ced rt AAUGS DANE OOK bidAain OSES S CHAE Roa KS 6 3

Regional Properties, Inc. v. Financial & Real Estate

Consulting Co., 752 F.2d 178 (5th Cir. 1985) ..... 4

Rivers v. Northwest Airlines, Inc., 1995 WL 888612 (E.D.

Mo.), aff'd, 72 F.3d 133 (8th Cir. 1995) ........... 6, 18

Rogers v. Missouri Pacific R. Co., 352 U.S. 500 (1957)

Vi Cada a eNS SMOKER bh aS bs be CAR Ks Sas cee haan 11

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

Sen: WE 8 ic a ie 19

St. Mary’s Honor Center v. Hicks, 509 U.S. 502 (1993)

SUP RRMAS Ca WEES CO Naess eebbEs Seu au eohb es 12

United States v. Texas, 507 U.S. 529 (1993) .......... a2

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

534 (Sth Cir. 1993), cert. denied, 115 S. Ct. 1403

CURE bk SSCA RDNA SR ORO 3, 4,5, 10, 11, 12, 13, 17, 18, 19

Wittorf v. Shell Oil Co., 37 F.3d 1151 (Sth Cir. 1994)

*e*ereerneevneeeeeeeneeeeeeeveeeeeeeeeeeeeeneeeeeeeeener

vili

Contents

Page

Zipes v. Trans World Airlines, Inc., 455 U.S. 385 (1982)

UT Oe eT rey ee eee eee eee OP EE Te oe 1

Statutes Cited:

eo Bie Rhy Li | RPC eer eee T Te ee Te rET eT TES ]

yo gt ee ee renre a eepEy Trot Pre ers 12, 16

Se Se PE Cock nu seuss ere ae peers kaceans 5

ye tk OS oa Se 8 Pere re rrr errs errr ]

Be Meas © EE 3 bod ces ac eek abcess heetake By ae

BP Ue EL vs vv ko week pekaacecnantaea 14

Be Sits BLEED 6S 5 Sha Rasa caceeeenes ences 5

Ee TA EOE 3a cckc nev edad s45e 0504s sim ekxenans 10

ed Bites GE EME: Ak bs oA Seda e Rec oue ses onnyneanys 8

OD Age OR Shek cin ba pan end do cs avncehennececun 12

Other Authorities Cited:

45 Coma. Fat. SAS (IG 2G) ons. cv ccsnceincecnowscsas 11

Griffith, The Vindication of a National Policy Under the

Federal Employers’ Liability Act, 18 Law & Contemp.

Pe. 100 CRS a avo ake cies cans cbuento cba ss 11

ix

Contents

Page

Harlan, Some Aspects of the Judicial Process in the

Supreme Court of the United States, 33 Austl. L.J. 108

Sy | IR Rr ely ONE aC Aranah ta gt Sy he ene 16

RESTATEMENT (SECOND) OF CONTRACTS § 7 cmt.b ...... 5

S. Rep. No. 263, 101st Cong., 2d Sess. 32, reprinted in

1990 U.S. Cope Conc. & Apmin. News 1509 ....... 2

l

The Respondent, ABB Vetco Gray, Inc. (“ABB Vetco Gray”),

respectfully files this Brief in Opposition and requests that this

Court deny the Petition for Writ of Certiorari seeking review of

the Fifth Circuit's opinion in this case entered on April 29, 1996.

STATEMENT OF THE CASE

ABB Vetco Gray adopts by reference the statement of facts

or “Background” in the District Court’s Order dated September

14, 1995, granting summary judgment in favor of ABB Vetco

Gray. (Petitioner’s Appendix (“Pet. App.”) B-3, B-4).

Respondent challenges paragraphs 8, 10, 11, 12 and 13 of

Petitioner's Statement cf Facts as argumentative, irrelevant, and

not established by the evidence in the courts below.

REASONS FOR DENYING THE WRIT

The Petitioner commenced this action on April 18, 1995,

alleging age discrimination in violation of the Age

Discrimination in Employment Act (“ADEA”). 29 U.S.C.

§§ 621-634. Respondent filed a timely answer and counterclaim

for breach of a waiver agreement; Petitioner had signed a release

waiving any age discrimination claims in exchange for extra

severance benefits to which the Petitioner was not otherwise

entitled. In response to Respondent's counterclaim, the Petitioner

alleged that the waiver was unenforceable because it failed to

comply with the requirements of the Older Workers Benefit

Protection Act (“OWBPA”). 29 U.S.C. § 626(f). The District

Court granted summary judgment in favor of the Respondent,

finding that the Petitioner had ratified the allegedly

unenforceable waiver by failing to timely tender back the

severance consideration. (Pet. App. B). Pursuant to its well

established precedent, the Fifth Circuit affirmed. (Pet. App. A).

The decisions of the courts below were correct, and the

2

Petition for Writ of Certiorari should be denied, because: (1)

the tender back rule is consistent with the language of the

OWBPA,; (2) the tender back rule, as applied to ADEA waivers,

is not invalidated by this Court’s decision in Hogue v. Southern

Ry. Co., 390 U.S. 516 (1968); (3) the tender back rule is correct

as a matter of policy; and (4) there is no active conflict among

the courts of appeal with regard to the tender back requirement.

I.

THE FIFTH CIRCUIT’S TENDER BACK RULE IS

CONSISTENT WITH THE LANGUAGE OF THE OLDER

WORKERS BENEFIT PROTECTION ACT.

Effective October 16, 1990, the ADEA was amended by

the OWBPA. In enacting the OWBPA, Congress resolved a split

among the circuits by codifying the “totality of the

circumstances” test for determining the validity of a waiver of

ADEA claims.' The legislative history of the OWBPA indicates

that the fundamental purpose of the OWBPA’s waiver provisions

was to ensure that waivers were obtained without fraud, duress,

coercion, or mistake of material facts.’

Petitioner contends that the plain language of the OWBPA

1. See S. Rep. No. 263, 101st Cong., 2d Sess. 32, reprinted in 1990

U.S.Cope Conc. & Apmin.News 1509, 1537 (“The Committee expects that

courts reviewing the “knowing and voluntary” issue will scrutinize carefully

the complete circumstances in which the waiver was executed. The Committee

expreses (sic) support for the [totality of the circumstances) approach taken

on this limited issue in Cirillo v. Arco Chemical Co., 862 F.2d 448 (3rd Cir.

1988), and disapproves the [ordinary contract principles] approach adopted

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

denied, [482 U.S. 928, 107 S. Ct. 3212, 96 L.Ed.2d 699] (1987).”).

2. Id.

3

precludes ratification of a release otherwise in violation of the

OWBPA. The language upon which the Petitioner relies states

that an individual “may not” waive any ADEA claim unless the

waiver is knowing and voluntary. 29 U.S.C. § 626(f)(1). In effect,

Petitioner argues that the OWBPA abrogates the application of

common law contract principles to the enforceability of ADEA

waivers, other than those expressly codified by the OWBPA. As

discussed below, Petitioner’s arguments are without merit.

By its terms, the OWBPA merely codifies, in the context of

claims under the ADEA, a centuries-old principle that a “waiver”

must be “knowing and voluntary.” /d. In contending that the

OWBPA abrogates the equally venerable common law principle

of ratification, the Petitioner not only ignores the statute’s plain

language, but entirely ignores the common law background

against which the OWBPA was enacted. Moreover, the Petitioner

disregards the well-established principles applicable to claims

of statutory abrogation of the common law.

It is undisputed that the Petitioner's claim would be barred

by the common law ratification doctrine. At common law,

releases tainted by fraud, mistake or duress are merely voidable,

not void, at the option of the defrauded, mistaken or coerced

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

534, 538 (Sth Cir. 1993), cert. denied, 115 S. Ct. 1403 (1995);

Morta v. Korea Ins. Corp., 840 F.2d 1452, 1455 (9th Cir. 1988)

(Guam law); Ort v. Midland-Ross Corp., 523 F.2d 1367, 1368

(6th Cir. 1975) (federal common law under the ADEA).

However, the common law also makes clear that such a voidable

release can be ratified: “the releasor who retains consideration

after learning that the agreement is voidable has effectively

ratified the release and may not later avoid its terms.”

Cumberland & Ohio Co. of Texas, Inc. v. First American Nat'l

Bank, 936 F.2d 846, 850 (6th Cir. 1991), cert. denied, 502 U.S.

4

1034 (1992). Ratification does not amount to enforcement of

the release as a contractual obligation; put simply, the plaintiff's

subsequent conduct in retaining the consideration paid to obtain

the release makes prosecution of the claims fundamentally

unfair. Wamsley, 11 F.3d at 540 n. 11; Blistein v. St. John’s

College, 74 F.3d 1459, 1466 (4th Cir. 1996); see also

Cumberland, 936 F.2d at 850; In re Boston Shipyard Corp.. 886

F.2d at 455; Anselmo v. Manufacturers Life Ins. Co., 771 F.2d

417, 420 (8th Cir. 1985).

Prior to the enactment of the OWBPA, courts routinely

applied ratification principles to ADEA releases. See, e.g.,

O’Shea v. Commercial Credit Corp., 930 F.2d 358, 362 (4th Cir.),

cert. denied, 502 U.S. 859 (1991); Grillet v. Sears, Roebuck &

Co., 927 F.2d 217 (Sth Cir. 1991). As recognized by the Fifth

Circuit, nothing in the OWBPA abrogates the common law

principle that an invalid waiver can be ratified by subsequent

conduct. See Wamsley, 11 F.3d at 539.4

3. See also Fleming v. United States Postal Service AMF O'Hare, 27

F.3d 259 (7th Cir. 1994), cert. denied, 115 S. Ct. 741 (1995) (federal common

law); In re Boston Shipyard Corp., 886 F.2d 451, 455 (ist Cir. 1989) (federal

common law); Regional Properties, Inc. v. Financial & Real Estate Consulting

Co., 752 F.2d 178, 182 (Sth Cir. 1985) (Texas law); DiRose v. PK Management

Corp., 691 F.2d 628, 633-34 (2d Cir. 1982) (New York law), cert. denied,

461 U.S. 915 (1983).

4. Petitioner's almost exclusive reliance on the language of the OWBPA

for the contention that the principles of ratification are inapplicable is curious.

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

denied, 506 U.S. 955 (1992), a case relied upon by the Petitioner, did not

consider the language of the OWBPA and in Oberg v. Allied Van Lines, Inc.,

11 F.3d 679 (7th Cir. 1993), ceri. denied, 114 S. Ct. 2104 (1994), also relied

upon by Petitioner, the Seventh Circuit specifically relied on the Forbus

decision in its analysis. In addition, the Seventh Circuit's observation in Oberg

that the “language of the OWBPA .. . forbids any waiver” is suspect. /d. at

683. Clearly, the OWBPA does not forbid “any waiver” since the purpose of

the OWBPA was to set standards for ADEA waivers. Instead, the OWBPA

makes clear that any waiver must be “knowing and voluntary.”

5

As observed by the Fourth Circuit in Blistein, Congress’

reliance upon the common law terms “knowing” and “voluntary”

suggests that Congress “was defining only those circumstances

in which a contract would be voidable, not when it would be

void.” Blistein, 74 F.3d at 1466. “Indeed, if anything, the text of

OWBPA lends support to that holding through its implicit

recognition that anADEA release agreement that does not meet

the OWBPA’s requirements is merely a voidable, not a void,

contract.” Jd. In Wamsley, the Fifth Circuit observed that at

common law, fraud, duress and mistake did not void a contract,

but, rather, only rendered that contract voidable.” Wamsley, 11

F.3d at 538 (citing ResTATEMENT (SeconD) Or Contracts § 7

cmt. b).

The conclusion that a release which fails to Satisfy the

OWBPA’s requirements is merely voidable is further bolstered

by Congress’ inclusion of § 626(f)(1)(G). Section 626(f)(1)(G)

expressly provides that for seven days after execution of a waiver

agreement an employee may revoke the agreement and that the

agreement does not become enforceable until the expiration of

the seven day revocation period. 29 U.S.C. § 626(f)(1)(G). “If

noncompliance with the other subparts ... rendered the

agreement void there would be no need for subpart (G).”

Wamsley, 11 F.3d at 539. Surely Congress would not give an

employee the right to void a non-complying release, as provided

in subpart (G), if such a release were void ab initio. The

Petitioner has failed to present any evidence that Congress

intended such an anomalous result.

In addition, the express language of the OWBPA fully

empowered the court of appeals to bar the Petitioner’s claims.

It is undisputed that the OWBPA did nothing to erase the ADEA’s

broad grant of equitable power to the courts. 29 U.S.C. § 626(b).

Equitable power implies not only the discretion to apply specific

common law doctrines, such as ratification, see, e.g., Zipes v.

Trans World Airlines, Inc., 455 U.S. 385, 393-94 (1982):

6

Occidental Life Ins. Co. of California v. EEOC, 432 U.S. 355,

373 (1977), but an even broader discretion to deny remedies

which would be unjust and unfair. See McKennon v. Nashville

Banner Pub. Co., 115 S. Ct. 879 (1995). Thus, contrary to the

Petitioner’s claims, the specific language of the OWBPA

supports the ruling below.

Further, the OWBPA does not exhaustively control the

enforceability of ADEA waivers. Nothing in the OWBPA

prohibits application of common law principles to ADEA

waivers. In fact, employees continue to challenge the

enforceability of ADEA waivers on common law, non-statutory

grounds. See Griffin v. Kraft General Foods, Inc., 62 F.3d 368

(11th Cir. 1995) (ADEA release challenged under common law

fraud doctrine and other non-statutory ground); Rivers v.

Northwest Airlines, Inc., 1995 WL 888612 (E.D. Mo.), aff'd,

72 F.3d 133 (8th Cir. 1995) (alleged involuntariness of release

not the result of lack of compliance with the requirements of

the OWBPA). For example, in Wittorf v. Shell Oil Co., 37 F.3d

1151 (Sth Cir. 1994), in which the Fifth Circuit required tender

back, there was no dispute that the OWBPA requirements were

satisfied. Thus, it is neither improper nor inconsistent to allow

employers to assert common law defenses, such as ratification,

when employees continue to enjoy a full panoply of common

law challenges to ADEA waivers. Rather, precluding application

of such defenses, while continuing to permit common-law

challenges, as urged by the Petitioner, would create an

inequitable inconsistency in this nation’s labor policy.

Finally, the Petitioner’s contention that the OWBPA

abrogates the application of well-settled common law doctrines

is in direct contravention of this Court’s precedent that “[w]here

a common-law principle is well established the courts may take

it as given that Congress has legislated with an expectation that

the principle will apply except ‘when a statutory purpose to the

at ora

7

contrary is evident.’” Astoria Fed. Sav. & Loan Ass’n v.

Solimino, 501 U.S. 104, 108 (1991) (citations omitted). Indeed,

this Court has repeatedly made clear 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 vy. Texas,

507 U.S. 529, 534 (1993) (quoting Mobil Oil Corp. vy.

Higinbotham, 436 U.S. 618, 625 (1978)). See also Norfolk

Redevelopment & Housing Auth. v. Chesapeake & Potomac Tel.

Co. of Virginia, 464 U.S. 30, 35-36 (1983). These principles are

equally applicable to federal antidiscrimination statutes. Zipes,

455 U.S. at 393-94 (Title VII limitations defenses subject to

waiver, estoppel and equitable tolling); Occidental Life Ins. Co.,

432 U.S. at 373 (EEOC right of action subject to laches).

Nothing in the OWBPA “speaks directly” to the common

law principle of ratification. Petitioner has failed to cite any

piece of legislative history which would Suggest that Congress

intended to abrogate the application of common law ratification

principles to ADEA waivers. Rather, as discussed above, the

OWBPaA’s legislative history clarifies that Congress was simply

codifying settled common law principles, under which any

release must be, at a minimum, knowing and voluntary. The

principle that a waiver is voidable if its execution was not

“knowing and voluntary” has long co-existed with the separate

and distinct principle that an otherwise invalid waiver is

nevertheless subject to ratification by subsequent conduct. As

Respondent has shown, the OWBPA does nothing to alter this

longstanding harmonious relationship.

8

Il.

THIS COURT’S DECISION IN HOGUE V. SOUTHERN

RY. CO. DOES NOT INVALIDATE THE FIFTH CIRCUIT’S

TENDER BACK REQUIREMENT.

Petitioner also asserts that this Court should grant certiorari

because the Fifth Circuit’s tender back rule, as relied upon by

the lower courts in this case, is inconsistent with this Court’s

decision in Hogue v. Southern Ry. Co., 390 U.S. 516 (1968).

In Hogue, the petitioner suffered an injury while working

in the respondent’s shops. Subsequently, the petitioner executed

a release in consideration for the respondent’s payment of $105.

After discovering that his injury was more serious than he

previously thought, the petitioner sued the respondent under the

Federal Employer Liability Act (“FELA”), 45 U.S.C. § 51-60,

claiming that the release was executed as the result of a mutual

mistake of fact.

The petitioner was unsuccessful in the lower courts. The

Georgia Court of Appeals ruled that a plaintiff who attacks a

previously executed release under the FELA, must, as a condition

to bringing his suit, tender back to the employer the consideration

he received for the release. The petitioner subsequently sought

relief in this Court.

This Court reversed the Georgia Court of Appeals, holding

that a tender back of consideration received by the petitioner

for a release was not a prerequisite to him bringing suit under

the FELA for his injury. Jd. at 516-18. This Court reasoned as

follows:

[A] rule which required a refund as a

prerequisite to institution of suit would be

wholly incongruous with the general policy

9

of the Act to give railroad employees a right

to recover just compensation for injuries

negligently inflicted by their employers.

Rather, it is more consistent with the

objectives of the Act to hold, as we do, that

it suffices that, except as the release may

otherwise bar recovery, the sum paid shall

be deducted from any award determined to

be due to the injured employee.

Id. at 518.

Petitioner claims that the Fifth Circuit’s tender back rule,

as relied upon by the lower courts, is inconsistent with Hogue.

In addition, the authority upon which Petitioner relies to

challenge the tender back rule is primarily based on Hogue. See

Oberg, 11 F.3d 679 (7th Cir. 1993); Forbus, 958 F.2d 1036 (11th

Cir. 1992); Isaacs v. Caterpillar, Inc., 765 F. Supp. 1359 (C.D.

Ill. 1991). Plaintiff, however, provides neither argument nor

analysis establishing why this Court’s interpretation of a tender

back requirement under the FELA should be applicable to the

ADEA. A closer examination of the Hogue decision, as well as

the purposes of, and policies behind, the FELA and the ADEA,

strongly suggests that Hogue is inapplicable to this case.

Initially, the procedural posture of Hogue makes it very

weak support for Petitioner’s contention that the no tender back

rule should be extended from the FELA to the ADEA. In Hogue,

after this Court granted certiorari, the respondent employer

confessed error and declined to present either briefing or oral

argument. 390 U.S. at 516. The Court issued a brief three page

per curiam opinion, limited to claims under the FELA and

releases challenged on the ground of mutual mistake, without

the benefit of adversarial presentation. See id. at 517. Noticeably

absent from Petitioner’s brief is citation to any opinion of this

Court in which it has foreclosed the application of the ratification

10

doctrine under circumstances remotely similar to those presented

in this case.

Moreover, as the Fifth Circuit has recognized, Hogue’s

FELA-based holding cannot be fairly extended beyond the

unique context of that particular statute. See Wamsley, 11 F.3d

at 540-41. The FELA provides that railroads operating in

interstate commerce:

shall be liable in damages to any person

suffering injury while he is employed by such

Carrier in such commerce . . . for such injury

or death resulting in whole or in part from

the negligence of any of the officers, agents,

or employees of such carrier, or by reason of

any defect or insufficiency, due to its

negligence, in its cars, engines, appliances

machinery, track, roadbed, works, boats,

wharves, or other equipment.

45 U.S.C. § 51.

The purpose of the FELA is to provide a broad remedial

framework for railroad workers injured by the negligence of

their employers and, in light of that purpose, is to be liberally

construed in their favor. Atchison, Topeka & Santa Fe Ry. Co. v.

Buell, 480 U.S. 557, 561-62 (1987); see also Kernan v. American

Dredging Co., 355 U.S. 426, 432 (1958) (FELA designed “to

provide for liberal recovery”). The FELA’s legislative history

makes this purpose clear:

[T]he employers’ liability law . . . places such

stringent liability upon the railroads for

injuries to their employees as to compel the

highest safeguarding of the lives and limbs

11

of the men in this dangerous employment.

... It was the intention of Congress in the

enactment of this law . . . to shift the burden

of the loss resulting from these casualties

from “those least able to bear it” and place it

upon those who can . . . “measurably control

their causes.””*

To promote the goal of liberal recovery, the FELA’s statutory

liability scheme strips an employer of its common law defenses

and imposes liability if the employer’s “negligence played any

part, even the slightest, in producing the injury for which

damages are sought.” Wamsley, 11 F.3d at 541 (quoting Rogers

v. Missouri Pacific R. Co., 352 U.S. 500, 506-07 (1957)); see

also Buell, 480 U.S. at 562 n. 8. A plaintiff’s burden in a FELA

action is therefore significantly lighter than it would be in an

ordinary negligence action. Lisek v. Norfolk and Western Ry.

Co., 30 F.3d 823, 832 (7th Cir. 1994), cert. denied, 115 S. Ct.

904 (1995). Thus, in Hogue, this Court merely advanced the

FELA’s purpose of providing liberal recovery to workers for

injuries sustained in their inherently dangerous occupations.

Wamsley, 11 F.3d at 541.

On the other hand, Congress passed the ADEA to:

[P]romote the employment of older persons

based on their ability rather than their age;

to prohibit arbitrary age discrimination in

employment; [and] to help employers and

workers find a way of meeting problems

arising from the impact of age on

employment.

5. Wamsley, 11 F.3d at 541 n. 12 (quoting Griffith, The Vindication of a

National Policy Under the Federal Employers’ Liability Act, 18 Law &

Contemp. Prob. 160 (1953) (quoting from 45 Cong. Rec. 4041 (1910))).

12

29 U.S.C. § 621(b). Noticeably absent from the language of the

ADEA and its legislative history is any evidence that Congress

enacted the ADEA to promote liberal, unburdened and

expeditious recoveries to employees. Wamsley, 11 F.3d at 541-

42. In fact, unlike the FELA, which requires no more proof than

that the employer’s negligence played any role in the employee’s

injury, an ADEA plaintiff cannot succeed unless he or she

establishes intentional discrimination. Biggins v. Hazen Paper,

Co., 507 U.S. 604 (1993).° To establish intentional discrimination

under the ADEA, the plaintiff must establish that the employer’s

action was based on the plaintiff’s age and that the plaintiff’s

age was, in fact, the determinative factor in the employer’s

decision to take such action. St. Mary’s Honor Center v. Hicks,

509 U.S. 502, 513 (1993); Hazen Paper, 507 U.S. at 610.

Further, the FELA expressly states that “[a}ny contract, rule,

regulation or device whatsoever, the purpose or intent of which

shall be to enable any common carrier to exempt itself from any

liability created under this chapter, shall to that extent be void.”

45 U.S.C. § 55 (emphasis added). The OWBPA, by contrast,

does not render contractual waivers void, but merely requires

them to be “knowing and voluntary” under specified standards.

29 U.S.C. § 626(f)(1).

Moreover, as recognized by the Fifth Circuit, there are

6. Although this Court has not addressed the issue, most courts doubt

that a disparate impact claim can be asserted under the ADEA. See Hazen

Paper, 507 U.S. at 610 (“[W]e have never decided whether a disparate impact

theory of liability is available under the ADEA.”); Ellis v. United Airlines,

Inc., 73 F.3d 999, 1007-10 (10th Cir.), cert. denied, 116 S. Ct 2500 (1996);

Lyon v. Ohio Educ. Ass'n & Prof’! Staff Union, 53 F.3d 135, 139 n. 5 (6th

Cir. 1995); DiBiase v. SmithKline Beecham Corp., 48 F.3d 719, 732-34 (3rd

Cir.), cert. denied, 116 S. Ct. 306 (1995); EEOC v. Francis W. Parker Sch., 41

F.3d 1073, 1076-78 (7th Cir. 1994), cert. denied, 115 S. Ct. 2577 (1995).

Pt

H

‘

!

13

crucial differences between settling FELA claims and settling a

potential claim under the ADEA. See Wamsley, 11 F.3d at 542.’

In the case of a FELA claim, the employee has already suffered

an injury and the only remaining issue is the amount of damages.

Id. In contrast, when an employee is being terminated, there

has not necessarily been an injury resulting from age

discrimination; both the issues of liability and damages remain

unresolved. As discussed above, an ADEA plaintiff must prove

that the employer terminated him because of his age. Hazen

Paper, 507 U.S. at 610. In offering a severance package in

exchange for a release, the employer is merely seeking to

“compromise in advance a potential age discrimination event

and to offset in advance any loss and injury which an employee

might experience if such an event were to occur.” Wamsley, 11

F.3d at 542.

In a FELA case, offsetting severance compensation from

total damages is more appropriate since there is little dispute

that the employee has been injured. On the other hand, in an

ADEA case, neither liability nor damages are presumed.

Permitting the plaintiff to retain severance benefits paid in

consideration for a release until after these issues have been

fully litigated (no doubt several years and thousands of dollars

later) is clearly inappropriate, as the very purpose of the release

for the employer is to avoid such costly litigation.

Thus, application of Hogue’s FELA-based holding toADEA

severance situations is, as found by the Fifth Circuit,

incongruous. Jd. at 541 n. 13.

7. Although Wamsley addressed the differences in the context of a

reduction in force, the same analysis applies to this case in which the employer

terminated the employee.

i

Il.

THE FIFTH CIRCUIT’S TENDER BACK RULE, AS

FOLLOWED BY THE COURTS BELOW, IS CORRECT

AS A MATTER OF POLICY.

The issue in this case is very simple: whether an employee

who receives severance compensation in exchange for a release

of, inter alia, an age discrimination claim, may retain such

compensation while challenging the release by suing the

employer for age discrimination.* The answer must be no. A

contrary answer would permit the employee to finance litigation

against his or her employer with the same funds the employer

paid the plaintiff as consideration for a release from such

litigation. A plaintiff simply cannot have it both ways: i.e.,

retaining the benefits received pursuant to a severance

agreement, yet challenging the very agreement under which

those benefits were paid. Blistein, 74 F.3d at 1466.°

The courts which have not required a plaintiff to tender back

the compensation received as a condition of suing the employer

have expressed concern that such a rule would “chill” legitimate

age discrimination lawsuits."® See, e.g., Isaacs v. Caterpillar,

8. Under the OWBPA and the common law, compensation sufficient to

support a release must consist of compensation to which the employee is not

otherwise entitled. 29 U.S.C. § 626(f)(1)(D).

9. As the Fourth Circuit stated in Blistein: “(i}f we were to follow Oberg

... we would allow persons like [the plaintiffs) to have it “both ways,’ to

retain the benefits that they receive pursuant to their retirement agreements,

yet to challenge, through suits against their unsuspecting employers, the very

agreements under which those benefits were extended. This, we find no

evidence Congress contemplated.” 74 F.3d at 1466.

10. Such a concern concedes Respondent's position that allowing a

(Cont'd)

15

Inc., 765 F. Supp. 1359 (C.D. Ill. 1991). Such a concern simply

does not comport with reality. It is undisputed that the

overwhelming majority of plaintiffs enter into contingent fee

arrangements with their lawyers, whereby the costs of litigation

are taken from the ultimate recovery. It cannot be seriously

argued that the Fifth Circuit’s tender back rule “chills”

contingent fee agreements. Moreover, requiring a plaintiff to

tender back severance/release consideration merely requires the

plaintiff to return to the position in which he or she would have

been absent the severance agreement: with the ability to file a

lawsuit but without the compensation the employer paid to avoid

such lawsuit. Such a status quo ante result places all parties on

equal footing.

Rather than “chill” lawsuits by plaintiffs, a refusal to require

a tender back in ADEA cases would more likely “chill”

settlements or an employer's willingness to offer such added

severance benefits. If confronted with a no tender back rule,

employers would have reduced incentive to prospectively settle

possible age cases or to provide employees with extra severance

compensation in exchange for a release. Fearing a technical

violation of the OWBPA, employers would be more inclined to

retain severance benefits to finance the defense of the age cases

that are actually filed."' This result would run contrary to the

(Cont'd)

plaintiff to retain the severance compensation provides the financing for the

plaintiff's lawsuit. Additionally, this position is legally irrelevant since the

pertinent question is not the wisdom or fairness of the tender back rule and

ratification, but whether the OWBPA has directly abrogated them. See United

States v. Texas, 507 U.S. 529, 534 (1993).

11. In Fleming v. United States Postal Service AMF O'Hare, 27 F.3d

259, 260-61 (7th Cir. 1994), cert. denied, 115 S. Ct. 741 (1995), the Seventh

Circuit endorsed the principle that the tender back rule makes releases more

valuable to employers and encourages voluntary settlements, which benefits

both employees and employers in the long run.

16

ADEA’s express purpose of helping employers and workers find

a way of meeting problems arising from the impact of age on

employment. See 29 U.S.C. § 621(b).

IV.

THERE IS NOACTIVE CONFLICT BETWEEN THE

CIRCUITS.

In urging this Court to grant his Petition for Writ of

Certiorari, the Petitioner contends that a conflict exists among

the courts of appeal, citing Oberg v. Allied Van Lines, Inc., 11

F.3d 679 (7th Cir. 1993) and Forbus v. Sears, Roebuck & Co.,

958 F.2d 1036 (11th Cir. 1992). However, upon scrutiny, it is

apparent that the alleged conflict is one of form rather than

substance. As Justice Harlan explained, certiorari should be

denied “where it seems likely that the conflict may be resolved

as a result of future cases in the Courts of Appeals.” Harlan,

Some Aspects of the Judicial Process in the Supreme Court of

the United States, 33 Austl. L.J. 108, 112 (1959). This is such a

case. Recent jurisprudence from the Seventh Circuit signals a

shift toward possible adoption of the tender back requirement.

Further, the Eleventh Circuit has not readdressed the tender back

issue since its 1992 pre-OWBPA Forbus decision, and

consequently has failed to analyze many arguments supporting

the tender back requirement. Finally, a trend is emerging in the

nation’s courts toward adoption of the tender back requirement.

The Petitioner correctly notes that in Oberg, the Seventh

Circuit rejected any tender back requirement when confronted

with a release of ADEA claims violative of the OWBPA. 11

F.3d at 684. However, the Petitioner fails to acknowledge that

the Seventh Circuit subsequently questioned the reasoning of

its Oberg decision and that of similar decisions, including

Forbus. Fleming v. United States Postal Service AMF O’Hare,

27 F.3d 259 (7th Cir. 1994).

17

In Fleming, the Seventh Circuit enforced a tender back

requirement where the plaintiff challenged the validity of a

release of her Title VII and Rehabilitation Act claims. Speaking

through Chief Judge Posner, a unanimous panel (Eshbach and

Easterbrook, JJ.) cited the Fifth Circuit’s Wamsley decision —

with approval — for the proposition that “a release can be

rescinded only upon a tender of any consideration received.” 27

F.3d at 260-61. The Seventh Circuit held that, because the tender

back rule is a widely accepted “general principle of contract

law,” it “would surely be a component of any federal common

law of releases.” Jd. The Seventh Circuit explained in detail how

this rule, by making releases more valuable to employers, and

thus encouraging voluntary settlements, helps both employers

and employees in the long run. “The tender requirement is not a

remedy. It is a protection for defendants, although it may as we

have noted benefit plaintiffs in the long run too; a premise of a

free-market system is that both sides of the market, buyers as

well as sellers, tend to gain from freedom of contract.” Jd.

at 262.

Addressing age discrimination cases specifically, the

Seventh Circuit noted that the common law rule “may have to

give way,” but noted that the Fifth Circuit in Wamsley had

“strongly criticized our decision in Oberg.” Id. at 261. (emphasis

added). Tellingly, the Seventh Circuit referred to Oberg and its

progeny as follows: “[t)he idea behind these cases . . . is a little

obscure to us.” /d. (citations omitted). Thus, it appears that this

Court's intervention is not necessary to correct any perceived

conflict between the Fourth, Fifth and Seventh Circuits as the

emerging jurisprudence from the latter circuit appears to signal

a shift toward adoption of the tender back requirement in

employment cases generally.

The Petitioner also cites the Eleventh Circuit's Forbus

decision as evidence of a conflict. Initially, it should be

18

highlighted that Forbus was a pre-OWBPA decision. In Forbus,

the Eleventh Circuit relied almost entirely on this Court’s holding

in Hogue to reject a tender back requirement stating that neither

the Fifth Circuit nor the Fourth Circuit had considered the Hogue

decision in their analyses. Forbus, 958 F.2d at 1040-41."

Following the Forbus decision, the Fifth Circuit addressed the

alleged impact of Hogue and the OWBPA and continues to refuse

to enforce a similar rule under the ADEA. See Wamsley, 11 F.3d

at 540-542. Importantly, the Eleventh Circuit has not revisited

the tender back requirement since Forbus, and as a result, has

not addressed the Fifth Circuit's thoughtful analysis of Hogue

and the OWBPA. Thus, this Court’s intervention at this time

would arguably be premature.

Additionally, a trend is emerging in this nation’s courts

toward adoption of the tender back requirement. See Blistein,

11 F.3d 1459; Hodge v. New York College of Podiatric Medicine,

1996 WL 527330 (S.D.N.Y. 1996) (following the rationale and

rule of Wamsley); Long v. Sears, Roebuck & Co., 1996 WL

94537, 7 (E.D. Pa. 1996) (“We believe that Wamsley is consistent

with this jurisdiction’s pre-OWBPA jurisprudence and would

be followed if presented to the Third Circuit”); Rivers, 1995

WL 888612 (E.D. Mo. 1995) (adopting the reasoning of the Fifth

Circuit in Wamsley, and noting the Seventh Circuit’s questioning

of its own decision in Oberg).'* See also Deren v. Digital Equip.

Corp., 61 F.3d 1 (list Cir. 1995) (enforcing tender back

requirement where plaintiff sought to avoid release of alleged

ERISA claims); Fleming, 27 F.3d 259. This trend itself is a

sufficient ground upon which to deny certiorari.

12. Forbus addressed the Fifth Circuit's decision in Grillet v. Sears,

Roebuck & Co., 927 F.2d 217 (Sth Cir. 1991) and the Fourth Circuit's decision

in O'Shea v. Commercial Credit Corp., 930 F.2d 358 (4th Cir.), cert. denied,

502 U.S. 859 (1991), both pre-OWBPA cases.

13. But see EEOC v. Sara Lee Corp., 923 F. Supp. 994 (W.D. Mich.

(Cont'd)

19

Finally, this Court has repeatedly indicated in recent years

that the precise judicial disagreement alleged by Petitioner does

not presently warrant further review. The petitioners in Oberg

and Wamsley each sought a writ of certiorari from this Court to

address the questions and arguments asserted in the Petition sub

judice. Nonetheless, this Court declined to review the issue each

time. See Oberg, 114 S. Ct. 2104 (1994); Wamsley, 115 S. Ct.

1403 (1995).

As discussed above, the alleged conflict is one of form rather

than subsiance. Considering the Seventh Circuit’s apparent shift

toward the tender back rule, the Eleventh Circuit is left as the

sole court of appeal in apparent conflict with the Fifth Circuit.

If presented with another opportunity to address this issue, and

considering the language and legislative history of the OWBPA,

the Fifth Circuit’s Wamsley decision, and the Fourth Circuit’s

Blistein decision, it is possible that the Eleventh Circuit would

similarly reverse field in the wake of the emerging trend toward

adoption of the tender back requirement in employment cases.

Until that time, this Court’s intervention would likely be

premature and arguably unnecessary.

(Cont'd)

1995) (following Oberg and providing for deduction of severance benefits

from any damages award); Soliman v. Digital Equipment Corp., 869 F. Supp.

65 (D. Mass. 1994) (same).

20

CONCLUSION

The Petition for Writ of Certiorari should be denied.

Respectfully submitted,

LAWRENCE J. MCNAMARA

Counsel of Record

PAUL G. NASON

R. JEFFREY.WORTH

LIDDELL, SAPP, ZIVLEY,

HILL & LABOON, L.L.P.

Attorneys for Respondent

2200 Ross Avenue, Suite 900

Dallas, Texas 75201

(214) 229-4800