Opposition Brief — Norton v. Houston Industries, Inc.

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IN THE |

Supreme Court of the Anitery gosates

OCTOBER TERM, 1994

BARBARA NORTON; GLORIA MCLINTON; IDA LEE SMITH; CHARLES

SOLOMON; LEWIS A. WARD JR.; GLENDA F. PATRICK; TERRY

HUNTER; PAULETTE GADISON; MICAH SIMS; IDA NEAL; VIRGINIA

SMALL; LEE ANDERSON; ROBERT ARORA; HERRMAN AUGUSTIN;

RACHEL ANZALDUA; JAMES AUTRY; CHIKEJ. OGBOENYIYA;

CHARLES PACE; CHRISTINE VILLARREAL; NANETTE YELDER; LANG

VAN BUI; VICTOR WHITE; KERMIT FISHER; ANDREW BEASLEY;

ALFREDENE THOMAS; EDWARD FINISTER; ALICE HAYES; REGINALD

JEFFERSON; PATSY LEE; DANDY HUNT; THOMAS WELLS, III; LONZO

DORN; CORDELIA BELEHU; ALAN RICHARDSON; MARSHALL

O'BRIEN; WAYNE HALLMAN; MARY MARTINEZ; SHELIA PHILLIPS;

RENEE EDWARDS; LEO AARON, JR.; SYLVIA HERNANDEZ;

ELIZABETH ARGUETA; SPENCER JACKSON; JIM BURNS, JR.; LEOLA

CRAWFORD; WINSTON PINK; VICTOR SAMPLES; LINDA JOLIVET;

LARRY WARD; GLORIA CASTILLO; ANTHONY GARCIA; SANTOS

MARTINEZ; AND LINDA SCHWARTZ, Individually and on behalf of all

others Similarly Situated,

Petitioners,

¥,

HOUSTON INDUSTRIES, INCORPORATED; HOUSTON LIGHTING

& POWER COMPANY; DON D. JORDAN; DON D. SYKORA;

HUGH RICE KELLY; STEVE LETBETTER; ED TURNER; LEE

HOGAN; JACK GREENWADE; DON HALL; L. CHAPMAN SMITH;

SUSAN FABRE; STEPHEN SCHAEFFER; MCKINSEY &

COMPANY, INC.,

Respondents.

On Petition for Writ of Certiorari to the United States Court of

Appeals for the Fifth Circuit

BRIEF IN OPPOSITION TO PETITION FOR CERTIORARI

L. CHAPMAN SMITH

Counsel of Record

TONY P. ROSENSTEIN

MATTHEW P. Eastus

BAKER & BOTTS, L.L.P.

910 Louisiana,

Houston, Texas 77002

(713) 229-1234

QUESTIONS PRESENTED FOR REVIEW

Whether, as Petitioners Assert, This Case Presents an

Appropriate Vehicle for deciding if the Common Law

Doctrines of Ratification and Tender of Consideration

Prior to Seeking Rescission May Apply After Passage of

the Older Workers Benefit Protection Act ("OWBPA")

Since the District Court Did Not Rely on These

Doctrines at All to Support Its Decision and the Court

of Appeals Merely Cited These Doctrines in Dicta.

Whether, as Petitioners Imply, the Releases They

Signed That Waived Their Right to Sue Respondents

for Any Claims Arising Out of Their Separation From

Employment Did Not Comply in All Respects with the

Requisites of the OWBPA.

Whether the Fifth Circuit Properly Applied the

Common Law Doctrines of Ratification and Tender-

Back of Consideration to the Releases Signed by

Petitioners After the Passage of the OWBPA.

Whether Petitioners Can Now Claim an Entitlement to

an Additicnal Sixty-Days’ Pay When the Releases They

Signed Clearly Defined the Consideration They Were

Supposed to, and Did, Receive.

Whether Petitioners Can Assert an ERISA Claim Not

Raised Before the District Court or the Court of

Appeals.

PARTIES TO THE PROCEEDINGS

Petitioners:

BARBARA NORTON; GLORIA MCLINTON; IDA LEE SMITH;

CHARLES SOLOMON; LEWIS A. WARD, JR.; GLENDA F.

PATRICK; TERRY HUNTER; PAULETTE GADISON; MICAH

SIMS; IDA NEAL; VIRGINIA SMALL; LEE ANDERSON;

ROBERT ARORA; HERRMAN AUGUSTIN; RACHEL

ANZALDUA; JAMES AUTRY; CHIKE J. OGBOENYIYA;

CHARLES PACE; CHRISTINE VILLARREAL; NANETTE

YELDER; LANG VAN BUI; VICTOR WHITE; KERMIT

FISHER; ANDREW BEASLEY; ALFREDENE THOMAS;

EDWARD FINISTER; ALICE HAYES; REGINALD

JEFFERSON; PATSY LEE; DANDY HUNT; THOMAS WELLS,

Ill; LONZO DORN; CORDELIA BELEHU; ALAN

RICHARDSON; MARSHALL O’BRIEN; WAYNE HALLMAN;

MARY MARTINEZ; SHELIA PHILLIPS; RENEE EDWARDS;

LEO AARON, JR.; SYLVIA HERNANDEZ; ELIZABETH

ARGUETA; SPENCER JACKSON; JIM BURNS, JR.; LEOLA

CRAWFORD; WINSTON PINK; VICTOR SAMPLES; LINDA

JOLIVET; LARRY WARD, GLORIA CASTILLO; ANTHONY

GARCIA; SANTOS MARTINEZ; AND LINDA SCHWARTZ,

Individually and on behalf of all others Similarly Situated

Respondents:

HOUSTON INDUSTRIES, INCORPORATED; HOUSTON

LIGHTING & POWER COMPANY; DOND. JORDAN;

DON D. SYKORA; HUGH RICE KELLY; STEVE

LETBETTER; ED TURNER; LEE HOGAN; JACK

GREENWADE; DON HALL; L. CHAPMAN SMITH; SUSAN

FABRE; STEPHEN SCHAEFFER; MCKINSEY & COMPANY,

INC.

Entities Affiliated With Respondents:

DEVELOPMENT VENTURES, INC.; HOUSTON INDUSTRIES

FINANCE, INC.; HOUSTON INDUSTRIES ENERGY, INC-.;

KBLCOM INCORPORATED; AND UTILITY FUELS, INC.

TABLE OF CONTENTS

PAGE

QUESTIONS PRESENTED FOR REVIEW .......... i

PARTIES TO THE PROCEEDINGS ..............4.. ii

ee rr iii

pe eg. vii

Ee ee ree l

EEE er l

STATUTORY PROVISIONS AND RULE

Pe WUdeewe Me BOONES 8 ee ces 2

WWRROEEEETE GP BPEEO GABE 6c ee ee eee 2

A. Course of Proceedings and

Disposition in the Courts

RS 2

B. a 3

REASONS WHY THE PETITION SHOULD

CS 6

On ae ee Aw Ga he kk W 6 Oe 0 08s 29

PEED ot bar D ARIS Sa Gls 0 ew es ee eee os la

Final Judgment of the Fifth

Circuit entered on February 10,

1995, in Barbara Norton, et al. v.

Houston Industries, Inc., et al.,

No. 94-20358 (Sth Cir. 1995) ........ la

pe te ee ee er oe Fe ee a 3a

Memorandum Opinion and Order

of the district court entered on

April 5, 1994, in Barbara Norton,

et al. v. Houston Industries, Inc.,

et al., No. H-92-3239 (S.D. Tex.

See Back Fatbck te ok oe biees s Bas 3a

Aree GS OFA os ed ie Ew ede tees 20a

Offer Letter

APPERGE G5 EAR Ae 22a

oe Ee ee ee reer eS Pee 24a

Agreement and Release

TABLE OF AUTHORITIES

CASES PAGE

Alexander v. Gardner-Denver Co.,

I PG ag sk a 6 kh Ww ee we 15

Anselmo v. Manufacturers Life Ins. Co.,

pepe Bes i a rr 18

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

a BS ee eee 18

Atchison, T. & S.F. Ry. v. Buell,

Ses been. RI FOE oe 19, 20, 21

Bank One, Tex., N.A. v. Taylor,

970 F.2d 16 (Sth Cir. 1992),

cert. denied, 113 S. Ct.

I i en Ps se wee OHS 16

Bartel Dental Books Co. v. Schultz,

786 F.2d 486 (2d Cir.), cert.

denied, 478 U.S. 1006 (1986) .............. 16

Bormann v. AT&T Communications, Inc.,

875 F.2d 399 (2d Cir.), cert. denied,

SE Sia ED he VS a Se 15, 16

Callen v. Pennsylvania R.R..,

Bee EOD oo we CON SEU, « 21, 22

Chardon v. Fernandez,

454 U.S. 6 (1981)(per curiam) ........... 11, 14

Cirillo v. Arco Chem. Co.,

wen Fue Ore te Gk. FS ee tA ee... 16

Consolidated Rail Corp. v. Gottshall,

500 DG SE eR a Cale ccericnes 19-21

Constant v. Continental Tel. Co. ,

745 F. Sapo. 1374 C.D: GBD occ. oc oe ee

Cormier v. Pennzoil Exploration & Prod. Co.,

969 F.26 3550 Ge Ce BGs es Sree. oes

County of Oneida v. Oneida Indian Nation of N.Y.,

470 UB SOR, on ed eR ee 4S lsd HT

Cumberland & Ohio Co. v. First Am. Nat’l Bank,

936 F.2d 846 (6th Cir. 1991), cert. denied,

S58 Ue ee ww oa 06k Ree we eee es

Delaware State College v. Ricks,

408 U5... Be Cae oth Oe 04 bh BEES

Finz v. Schlesinger,

957 F.2d 78 (2d Cir.), cert.

denied, 183 G2. Fae Wo a dS Wei

Fleming v. United States Postal Serv. AMF O'Hare,

rem eB ee eee 16,

Forbus v. Sears Roebuck & Co.,

958 F.2d 1036 (11th Cir.), cert. denied,

113 S. Ge ea en os <a ea wite sas se eu

Gallick v. Baltimore & O.R.R.,

373 GS: Se vas oe eee ee

Gilliard v. Mississippi,

ee ee re a ar ee ree

Gilmer v. Interstate/Johnson Lane Corp.,

500 U.S. FR Cres Sits ea ee ae ES.

vii

Grillet v. Sears, Roebuck & Co.,

ee eee ee ee Ss ws os cb abe we 17

Harlan v. Sohio Petroleum Co.,

677 F. Supp. 1021 (N.D. Cal. 1988) .......... 28

Hazen Paper Co. v. Biggins,

3. BSS 0 eS eee 2 are 23

Hogue v. Southern Ry.,

390 U.S. 516 (1968)(per curiam) ............ 22

Isbrandtsen Co. v. Johnson,

Pr i abe sf ibleles & ESR 6 18

Kamen v. Kemper Fin. Servs., Inc.,

ae ee ee ee ee 28

Kernan v. American Dredging Co.,

ee EE a Wik) 0 a's Ho's ae bos wie 20

Lancaster v. Buerkle Buick Honda Co.,

809 F.2d. 539 (8th Cir.), cert. denied,

ee aS gave Gia cD eUE 16

Laniok v. Advisory Comm. of Brainerd Mfg. Co.

Pension Plan, 935 F.2d 1360

RR ae eee ee ee 15

Leavitt v. Northwestern Bell Tel. Co.,

921 F.2d 160 (8th Cir. 1990) ............ 12, 15

Maynard v. Durham & S. Ry.,

SS re eS ee err 26

McCray v. New York,

Se es ED & oan: 0 0) ee A RE 8 «6 OES 8

viii

McKennon v. Nashville Banner Publishing Co..,

SEs Me We EE ee ease a ee he ee ees 23

Michel v. Louisiana,

ee ce EE oo % oS ic ores os Ooo ON Ge eRe 28

Mullen v. New Jersey Steel Corp.,

733 F. Supp. 1534 (D.N.J. 1990) ............ 17

Norfolk Redev. & Housing Auth. v. Chesapeake &

Potomac Tel. Co., 464 U.S. 30 (1983) ......... 18

O’Hare v. Global Natural Resources, Inc.,

898 F.2d 1015 (Sth Cir. 1990) ......... 11, 16, 26

O’Shea v. Commercial Credit Corp.,

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

ee Ses ED 6 os os we ek ap 15-17, 22, 25

Oberg v. Allied Van Lines, Inc.,

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

ee a a I es ce a ee ee a 8, 17, 22

Occidental Life Ins. Co. v. EEOC,

ee Ses I ee uN wae as Ke 25

Ponzoni v. Kraft Gen. Foods, Inc.,

774 F. Supp. 299 (D.N.J. 1991),

aff'd, 968 F.2d 14 (3d Cir.1992) ............ 12

Rodriguez-Abreu v. Chase Manhattan Bank,

986 F.2d 580 (Ist Cir. 1993) ............... 15

Rogers v. General Elec. Co.,

pee fo. Fe A. | ren 12, 15

Runyan v. National Cash Register Corp.,

787 F.2d. 1039 (6th Cir.)(en banc), cert. denied,

Ge ae I ecb be eke eee hae: 16

Schmitt-Norton Ford, Inc. v. Ford Motor Co..,

524 F. Supp. 1099 (D. Minn. 1981),

aff'd mem., 685 F.2d 438 (8th Cir.

8 BPRS oar la Pe a arr 11

Seward v. B.O.C. Div. of Gen. Motors Corp., |

805 F. Supp. 623 (N.D. Ill. 1992) ........... 25

Shaheen v. B.F. Goodrich Co.,

pla eae 10> GP Cw, G8) oe 15

Sommerville v. United States,

ea re 7

St. Mary’s Honor Ctr. v. Hicks,

eS Re oe nr ne 24

Strozier v. General Motors Corp.,

635 F.2d 424 (Sth Cir. Unit B

IEE Bis. Wha rh sab ea aw: bce oly we es 27

The Monrosa v. Carbon Black Export, Inc.,

a Red wee ee eA 7

Town of Newton v. Rumery,

ee We ere iyo SUS ei & 16

United States v. Standard Oil Co..,

i 16

United States v. Texas,

reenact tees oi ek A: 18, 25

Urie v. Thompson,

aot uy SON 6 he Se 19, 23

Wamsley v. Champlin Ref. & Chems., Inc.

11 F.3d 534 (Sth Cir. 1993),

cert. denied, 115 S. Ct. 1405

i RE a a ee or eer ae 8, 17, 22

Williams v. Phillips Petroleum Co..,

2D. Dee Se Ge ele BOD nso 0 Se ee SK 25, 27

Wittorf v. Shell Oil Co.,

BF Oe Nae Cee Gs a oh oe hee ee os 17

STATUTES

Federal Rule of Civil Procedure 56 ................. 2

Se kes GD Aa ts CREASES ee eA es l

Oe Cs UOTE 8 65 + « eed PR l

ee ee eS ok wo eck a ld ee oe 1

Age Discrimination in Employment Act

("ADEA"), 29 U.S.C. §§ 621-34

yo PG a ar passim

Older Worker Benefit Protection Act

(“OWBPA"), 29 U.S.C. § 626(f)

OP EE a ws ck tlins Gis WOW WE wh SS passim

Employee Retirement Income Security Act

("ERISA"), 29 U.S.C. §§ 1101-1461

(5 fe Be aaa ree re ae 1,3

Worker Adjustment and Retraining Notification Act,

29 U.S.C. OB ZIG1-OF CISSE) ow ee ees

Civil Rights Act of 1964, 42 U.S.C. §§ 2000e

to 2000e-17 (1988 & Supp. V 1993) ........ pa

Federal Employers’ Liability Act ("FELA"), 45 U.S.C.

I a te ee ae bo ob aloha 18-24

MISCELLANEOUS

Bennet D. Alsher, Validity of Waivers in

Discrimination Cases, 42 Lab. L.J. 81, 89-91

SUES lata leary ua ew ie SS ne ee Kae a 9

76 C.J.S. Release §§ 38, 40 (1994) ............. 15, 18

Melvin L. Griffith, The Vindication of a National

Public Policy Under the Federal Employers’

Liability Act, 18 Law & Contemp. Probs. 160,

ka AOR wo ee 8 19

Restatement (Second) of Contracts §§ 7, 85 (1981) ... 15, 18

H.R. Rep. No. 664, 101st Cong., 2d Sess. 19(1990) ..... 24

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

31 (1990), reprinted in

1990 U.S.C.C.A.N. 1509, 1537 ..... 10, 14, 18, 24

NO. 94-1845

IN THE

Supreme Court of the United States

OCTOBER TERM, 1994

BARBARA NORTON, et al.,

Petitioners,

HOUSTON INDUSTRIES, INCORPORATED, et al.,

Respondents.

On Writ of Certiorari to the

Court of Appeals for the Fifth Circuit

BRIEF IN OPPOSITION TO PETITION FOR

CERTIORARI

OPINIONS BELOW

The opinion of the court of appeals, (App., infra,

la - 2a), is unreported. The opinion of the district court, (App.,

infra, 3a - 19a), is reported at 65 EMPL. PRAC. DEc. (CCH) q 43,

252 (S.D. Tex. 1994).

JURISDICTION

The district court had jurisdiction over this case

pursuant to 28 U.S.C. § 1331 in that this action arose under the

laws of the United States, specifically the Age Discrimination in

Employment Act ("ADEA"), 29 U.S.C. §§ 621-34 (1988 & Supp.

V 1993), the Older Workers Benefit Protection Act (“OWBPA"),

29 U.S.C. § 626(f)(Supp. V 1993), and the Employee Retirement

Income Security Act ("ERISA"), 29 U.S.C. $§ 1101-1461 (1988

& Supp. V 1993). The court of appeals had jurisdiction to review

the district court's final judgment under 28 U.S.C. § 1291.

Petitioners attempt to invoke this Court's jurisdiction pursuant to

28 U.S.C. § 1254(1).

STATUTORY PROVISIONS

AND RULE INVOLVED IN THIS CASE

This case implicates the OWBPA, 29 U.S.C. § 626(f), the

ADEA, 29 U.S.C. §§ 621-34, ERISA, 29 U.S.C. §§ 1101-1461,

and Federal Rule of Civil Procedure 56.

STATEMENT OF THE CASE

A. Course of Proceedings and Disposition in the

Courts Below.

Petitioners brought several state and federal suits

against Respondents in connection with a reduction-in-force

("RIF") conducted by Respondents in the spring of 1992. This

case, Norton, and a companion case, Rachel Anzaldua, et al. v.

McKinsey & Co., et al., C.A. No. 93-0400 (S.D. Tex.) asserted

breach of contract and various tort causes of action under Texas

law in connection with Petitioners’ terminations and a

contemporaneous Offer of certain employee benefits in exchange

for signing a release. Petitioners timely removed these actions on

the basis of federal preemption. Maria Fuentez, et al. v. Houston

Industries, et al., C.A. No. H-92-2728 (S.D. Tex.) was a

declaratory judgment suit questioning whether Respondents’ RIF

violated the Worker Adjustment and Retraining Notification Act,

29 U.S.C. §§ 2101-09 (1988). Charles Pace, et al. v. Houston

Industries, et al., C.A. No. H-92-3442 (S.D. Tex.) alleged

violations of the ADEA and ERISA. Respondents then brought

Suit against Petitioners’ collective bargaining representative in

Houston Lighting & Power Co., et al. v. International Brotherhood

of Electrical Workers, Local Union No. 66, C.A. No. H-92-0430

(S.D. Tex.).'

Judge Kenneth Hoyt of the Southern District of

Texas consolidated the Pace, Anzaldua, and IBEW suits into

Norton, C.A. No. H-92-3239. Moreover, since the Fuentez suit

involved the same releases at issue in the consolidated Norton suit,

Judge Hoyt consolidated that case into Norton for the sole purpose

' Although several of these suits were brought as class actions, the

district court refused to certify any classes, (App., infra, 18a), and

Petitioners have not sought to revisit Judge Hoyt’s decision in this regard.

of determining the releases’ validity. Thus, although petitioners

seek to present this case as one dealing primarily with the ADEA,

only one of the consolidated cases (Pace) raised such a claim.

After full briefing by both sides on the release issue, the

district court granted summary judgment in Respondents’ favor on

April 5, 1994, finding that Petitioners had knowingly and

voluntarily executed the releases. (App., infra, 16a.)

Subsequently, the court of appeals held on February 10, 1995 that

the district court’s judgment was “correct, essentially for the

reasons given by the district court." (App., infra,ia-2a.) As an

additional ground for affirming the decision of the district court,

the court of appeals found that, even if the releases had been

invalid, the Petitioners ratified them by failing to tender the

consideration received before seeking rescission. (App., infra,

2a.)

B. Statement of Facts.

The Petitioners are former employees of

Respondent Houston Lighting & Power Company ("HL&P"), a

wholly owned subsidiary of Respondent Houston Industries,

Incorporated ("HII"), and former employees of Respondent Utility

Fuels, Inc. ("UFI"), previously an HII subsidiary that has since

merged into HL&P. Respondent McKinsey & Co. is a consulting

firm used by HII in connection with the 1992 reorganization of its

workforce. The individual Respondents are all officers and/or

agents of HL&P, UFI, or Hil.

Petitioners allege that Respondents violated the

ADEA, ERISA, and Texas common law when they notified

Respondents on or before April 6, 1992 of their selection for

severance from HL&P and UFI as part of a RIF of approximately

1,100 workers. HL&P and UFI told all affected employees that

their terminations would take effect sixty days hence. During this

sixty-day notification period, employees slated for termination,

including Petitioners, continued to receive their full salaries and

benefits. They were not required to report to work or to perform

any job duties, and they received free career transition services.

(App., infra, 20a.)

The HII and HL&P Success Through Excellence

Program ("STEP") and the UFI Organizational Effectiveness

Analysis Program ("“OEAP") Severance Pay Plans offered severed

employees significantly enhanced severance benefits in exchange

for a release that relinquished their right to sue Respondents on

claims relating to their employment with or their separation from

Respondents. (App., infra, 22a - 25a.) Approximately 98% of the

putative plaintiffs signed releases. Only one of these individuals

(Maria Fuentez)’ timely revoked her acceptance of the release.

Petitioners suggestion that any of the rest of them timely revoked

is specious. (Pet. at viii.)

Respondents offered Petitioners various severance

benefits in exchange for signing a release of all claims "related in

any way to my employment with or separation from the Company

or its affiliates," (App., infra, 24a,) and they gave Petitioners at

least forty-five days to consider whether to sign the release, and

seven days for revocation, as outlined clearly in the release and

accompanying documents.? Any suggestion by Petitioners that

they did not know that they had forty-five days to consider the

severance package offer is thus incorrect. Respondents advised

Petitioners considering the offer to consult an attorney. (App.,

infra, 11a.)

The Severance Program brochure that each

Petitioner received described in detail the benefits available to

employees involuntarily terminated under authorized staff reduction

plans at HL&P and UFI. The brochures included a table for

determination of the lump-sum severance pay benefits available if

the individual elected to participate in the program. The brochures

described the enhanced welfare and pension benefits that

individuals who elected to participate in the programs would

2 Ms. Fuentez is not a Petitioner; indeed, her action against

Respondents has been set for trial.

> Each individual severed from HL&P or UFI in the 1992 RIF

received a copy of a release offer letter, (App., infra, 20a-2la,) the

Houston Industries Incorporated Severance Pay Plan Agreement and

Release Information Sheet (the “Information Sheet"), (App., infra, 22a-

23a), a copy of the HII Severance Pay Plan Summary Plan Description

and Plan Document, and a copy of the release. (App., infra, 24a-25a.)

receive.‘ The brochures also advised Savings Plan participants of

their final distribution options. Finally, the brochures described

the lesser benefits available to individuals who elected not to

execute a release or who timely revoked a release. (App., infra,

22a.)

The release the Petitioners executed acknowledged

their understanding that signing the release was an important legal

act and that Respondents had advised them to consult an attorney.

(App., infra, 24a.) In exchange for payment of the severance

benefits described in the Plan Document, each individual agreed

not to sue Respondents, and waived

all claims and release[d] [HII], its affiliates, its

employee benefit plans, their directors and

officers, fiduciaries, employees and agents from

liability and damages related in any way to my

employment with or separation from the Company

or its affiliates. This waiver and release includes,

but is not limited to, claims and causes of action

under Title VII of the Civil Rights Act of 1964, as

amended; the Civil Rights Act of 1991; the Age

Discrimination in Employment Act of 1967, as

amended; the Civil Rights Act of 1966; the Texas

Commission on Human Rights Act; the Americans

with Disabilities Act; the Older Workers Benefit

Protection Act of 1990; the Employee Retirement

Income Security Act of 1974, as amended . . . the

Workers Adjustment and Retraining Notification

Act; all state and federal statutes and regulations;

all oral or written contract rights; and the common

law, such as tort or personal injury of any sort.

(App., infra, 24a (emphasis added).)

* These enhanced benefits included continued medical, dental, and life

insurance as well as retirement and savings benefits. The specific

benefits available to each individual depended upon years of service and

were described in the brochures.

In addition, in order to comply with the Older

Workers Benefit Protection Act of 1990 ("OWBPA"), 29 U.S.C.

§ 626(f),° HL&P provided Petitioners with a list of individuals

selected to receive the offer of Plan benefits and a list of

individuals not selected to receive the offer, identified by age and

job title.

REASONS WHY THE PETITION SHOULD BE DENIED

A. Because the Decisions Below Did Not Rely

Solely, or Even Primarily, on _ the

Ratification/Tender-Back Doctrines, This Case

Does Not Represent an Appropriate Vehicle for

Reaching the Merits of the Central Issue Raised

in the Petition.

Petitioners’ claim that a circuit split on the question

whether the common law doctrines of ratification and tender-back

doctrines may apply to releases of age discriminativa claims after

the enactment of the OWBPA provides a compelling reason for

this Court to review the case at bar.° While Respondents do not

dispute that the circuits have taken different views about this

subject, this case is not an appropriate one for resolving those

differences. Specifically, because the ratification/tender-back issue

was not necessary to support the decisions below, the Court should

not choose the instant case to resolve this question.

In a thorough opinion, the district court reviewed each

provision of 29 U.S.C. § 626(f) and found that Respondents

complied with it in conducting their 1992 RIF. (App., infra, 16a.)

Although Respondents raised the issue of ratification and the

failure to tender the consideration received, the district court did

not discuss this contention, and certainly the court did not rely on

it in granting summary judgment to Respondents, contrary to

> Pub. L. No. 101-433, 104 Stat. 983 (1990).

® Pet. at 3-5.

Petitioners’ assertion.’ (App., infra, 11a - 18a.) On appeal, the

Fifth Circuit endorsed the district court’s rationale, noting that

Respondents’ “summary judgment evidence showed that the

releases were valid and in accordance with the law, and

[Petitioners] produced no summary judgment evidence to support

a contrary finding." (App., infra, 2a.) The Fifth Circuit’s holding

thus rested on the conclusion that the releases met the requirements

of the OWBPA. (App., infra, 2a.) The court of appeals’

subsequent, alternative holding that the Petitioners failed to tender-

back the consideration they received for the releases, thereby

ratifying them, was thus unnecessary to its decision. (App., infra,

2a.) In short, an adequate and independent ground for granting

and affirming summary judgment in favor of Respondents appears

in the record and was relied on by the courts below, justifying the

denial of the instant petition for certiorari.*

Consequently, the presence of this alternative,

equally meritorious basis for the grant of summary judgment in

this case demonstrates that the decision of the Fifth Circuit is

correct without regard to the questions sought to be raised by

Petitioners. As a result, this Court would not be likely to reach

” Specifically, Petitioners assert that "(t]he district court found that

the Employees ratified the release.” Pet. at 6; see also id. at viii. While

Respondents assume Petitioners made this statement in good faith, it is

simply and entirely incorrect. The district court did not in any way base

its holding on ratification or failure to tender; indeed, these doctrines are

never even referred to in the opinion. (App., infra, 3a-19a.)

® See, e.g., Sommerville v. United States, 376 U.S. 909

(1964)(denying certiorari even though a live conflict existed as to whether

federal or state law controlled because it was evident that the resolution

of the conflict could not change the result reached below); The Monrosa

v. Carbon Black Export, Inc., 359 U.S. 180, 184 (1959)("While this

Court decides questions of public importance, it decides them in the

context of meaningful litigation. Its function in resolving conflicts among

the Courts of Appeals is judicial, not simply administrative or managerial.

Resolution here of the [issue in conflict among the circuits] can await a

day when the issue is posed less abstractly.").

the alleged points of importance or the alleged conflict referred to

by Petitioners, and it should deny the petition for certiorari.’

B. The Court Should Deny Certiorari Because the

Releases at Issue Complied with the OWBPA

and Were Valid on the Merits.

The OWBPA, enacted on October 16, 1990,

requires compliance with certain informational and procedural

requisites in order to validly waive ADEA rights. As the courts

below determined, the releases signed by petitioners satisfied all of

the requirements for a "knowing and voluntary” release under the

OWBPA. (App., infra, 2a, 18a.)"°

® Alternatively, Respondents observe that the issue of ratification and

a tender-back requirement after the passage of the OWBPA in 1990

requires "further consideration” in the lower courts “before it is addressed

by this Court." McCray v. New York, 461 U.S. 961, 962-63

(1983)(Stevens, J.); Gilliard v. Mississippi, 464 U.S. 867, 869

(1983)(Marshall, J., dissenting)(dissenting from the denial of certiorari

and observing that the remaining Justices “believe that this Court should

postpone consideration of the issue until more State Supreme Courts and

federal circuits have experimented with substantive and procedural

solutions to the problem"). This Court recently declined to review the

contrasting views of the Seventh Circuit in Oberg v. Allied Van Lines,

Inc., 11 F.3d 679 (7th Cir.), cert. denied, 114 S. Ct. 2104 (1994) and

the Fifth Circuit in Wamsley v. Champlin Refining & Chemicals, Inc., 11

F.3d 534 (Sth Cir. 1993), cert. denied, 115 S. Ct. 1405 (1995), which

squarely presented the ratification and tender-back issues. If the Court

deems these issues worthy of review, Respondents respectfully suggest

that a case in which these questions are more clearly implicated will

present itself in the not-too-distant future.

'© Under § 201 of the OWBPA, a waiver requested in connection with

an “exit incentive or other employment termination program offered to a

group or class of employees” must meet the following minimum

standards:

(A) the waiver must be a portion of an agreement

between the employer and the employee “that is written

in a manner calculated to be understood by such

individual, or by the average individual eligible to

One commentator has concluded that "[i]f the

‘laundry list’ of requirements is followed, a waiver of ADEA

participate";

(B) the waiver must mention that it encompasses rights

or causes of action arising under the ADEA;

“may arise after" the date the waiver is signed;

(D) the release must be supported by valid

consideration, i.e., an individual may validly waive his

rights only if the relief gives him monies or other

benefits to which he had no pre-existing right;

(E) the employer must advise the individual in writing

to consult with an attorney prior to signing the release;

(F) the employer must allow the employee at least

forty-five days within which to consider the waiver;

(G) the release must state that for a period of at least

seven days following its execution, the individual may

revoke the release, and “the agreement shall not

become effective or enforceable until the revocation

period has expired";

(H) at the beginning of the (at least) forty-five-day

period during which the employee may consider the

waiver, the employer must inform the employee in

language likely to be understood by the ordinary

participant of the following:

i) any class, unit, or group of individuals

covered by the program, the program’s

eligibility requirements, and the program’s

time limits, if any; and

i) the job titles and ages of persons eligible or

selected for the program, as well as the ages

of all individuals “in the same job

classification or organizational unit who are

not eligible or selected for the program."

29 U.S.C. § 626(f)(1). For an explication of these requirements and

ADEA waivers post-OWBPA, see generally Bennet D. Alsher, Validity

of Waivers in Discrimination Cases, 42 Lab. L.J. 81, 89-91 (1991).

rights should withstand legal challenge.""’ The legislative history

of the OWBPA supports this view. Specifically, the report of the

Senate Labor and Human Resources Committee indicates that the

additional informational and procedural requirements applicable to

the waiver of an ADEA claim are merely intended to ensure that

such a waiver is "knowing and voluntary. At a minimum, the

waiving party must have genuinely intended to release ADEA

claims and must have understood that he was accomplishing this

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

reprinted in 1990 U.S.C.C.A.N. 1509, 1537.2 Moreover, the

Senate report declares that a waiver of rights, even an

unsupervised one, “is generally available as an affirmative

defense." Jd. at 35, reprinted in 1990 U.S.C.C.A.N. at 1540.

Thus, a waiver is "valid" if "[a]ll of the criteria discussed above

[in 29 U.S.C. § 626(f) have been] . . . met.” Jd.

In the present case, the Respondents satisfied each

of the OWBPA’s requirements for a valid release in connection

with an “exit incentive” program offered to a group of employees,

see 29 U.S.C. § 626(f)(1)(F\(ii):

(a) Clarity of the release. The statute

demands that the release be part of an employer-employee

agreement that is written in a manner “calculated to be understood

by... the average individual eligible to participate." /d.

§ 626(f)(1)(A). Furthermore, the waiver must expressly mention

that it includes claims arising under the ADEA. Id.

§ 626(f)(1)(B). The release offered by Respondents fully complied

with these requirements, as the courts below held. (App., infra,

15a.) Specifically, the release was a one-page document, printed

in normal type, which was conspicuously titled “Agreement and

Release.” (App., infra, 24a - 25a.) Moreover, the release advised

each Petitioner in simple terms that he or she was waiving valuable

rights in exchange for certain enhanced severance benefits. Each

Petitioner also received an Information Sheet and a copy of the HII

'' Alsher, supra note 10, at 91.

'2 The Senate Report constitutes the authoritative legislative history

for the OWBPA because “[]the Senate bill was passed [by Congress] in

lieu of the House bill.” 1990 U.S.C.C.A.N. 1509.

Severance Pay Plan Summary Plan Description and Plan Document

that detailed the enhanced severance benefits available if a release

was timely executed and not revoked. (App., infra, 22a - 23a.)

Additionally, the release explicitly stated that an employee who

signed it was waiving any and all rights under the ADEA, ERISA,

and “all claims," including “all state and federal Statutes and

regulations; all oral and written contract rights; and the common

law." (App., infra, 24a.) Consequently, as the district court

correctly determined, "[c]larity is not an issue here." (App., infra,

15a.)

(b) No waiver of future rights. The OWBPA

then requires that a waiver not attempt to release future rights,

i.e., those arising after "the date the waiver is executed." 29

U.S.C. § 626(f)(1)(C). The courts below correctly concluded (and

the Petitioners do not dispute) that the Respondents notified the

Petitioners by April 6, 1992 that their employment would terminate

in June 1992. Moreover, it is undisputed that the Petitioners

signed the releases between April 14 and May 30, 1992. Since

any cause of action relating to the Petitioners’ discharges arose

when each employee was notified of his or her impending

discharge (at the latest on April 6, 1992), not on the termination

date in June 1992, the releases did not waive future rights. See

Chardon vy. Fernandez, 454 USS. 6, 28 (1981) (per

curiam)(holding that plaintiffs’ § 1983 claims were barred by

limitations and noting that causes of action arose on the date

plaintiffs were notified of their discharges, not on the actual date

of termination); Delaware State College v. Ricks, 449 U.S. 250,

259 (1980). In this case, ail of the Petitioners’ causes of action

relate to their loss of employment and thus had already accrued at

the time they executed the releases. Because those claims existed

when Petitioners signed the releases, the releases waived existing

claims, which are now barred.

have signed the release in exchange for adequate consideration to

which he had no preexisting right. 29 U.S.C. § 626(f){1)(D).

Each terminated emplovee, regardless of whether he or she signed

a release, received "60 days’ salary and benefits" and was "eligible

for COBRA (18-month) extension of medical and dental coverage,

and any benefits [they] were otherwise entitled to under the

Retirement Pian for Employees of Houston Industries Incorporated

and the Savings Plan of Houston Industries Incorporated."

Petitioners who timely signed releases received additional benefits,

inciuding lump-sum severance benefits ranging from four to forty-

four weeks’ pay, continued medical, dental and life insurance, an

enhanced pension (depending upon age and years of service), and

free career transition services. Plainly, these benefits were more

than a “token” and constituted remuneration to which the

participants had no preexisting right. Schmitt-Norton Ford, Inc. v.

Ford Motor Co., 524 F. Supp. 1099, 1103 (D. Minn. 1981), aff'd

mem., 685 F.2d 438 (8th Cir. 1982). Consequently, the

Petitioners all received adequate additional consideration for

signing the release, satisfying this portion of the OWBPA test.

(d) Advise releasor to consult attorney. The

employer must suggest that the employee consider consulting with

an attorney before signing the release. 29 U.S.C. § 626(f)(1)(E).

In the present case, Respondents admonished all employees eligible

for the Severance Pay Plan as follows: “Your decision to waive

these claims and rights is an important legal act, and you should

consult with an attorney before executing this Agreement and

Release." (App., infra, 23a.) In addition, the release itself states,

"I acknowledge that the Company has advised me to consult an

attorney before signing this Agreement and Release." (App., infra,

24a.) These statements fully discharged Respondents’ duty under

the statute. Cf. Rogers v. General Elec. Co., 781 F.2d 452, 456

n.7 (Sth Cir. 1986) (finding a knowing and voluntary release in a

Title VII case and stating that "[t]he fact that Rogers did not

actually consult an attorney prior to executing the release does not

require this Court to find that the waiver was not knowing")."°

"3 See also Leavitt v. Northwestern Bell Tel. Co. , 921 F.2d 160, 163

(8th Cir. 1990) (finding effective waiver of ERISA rights and stating that

"(t]he release advised Leavitt of his right to consult an attorney, but

Leavitt chose to sign the release without obtaining legal advice");

Ponzoni v. Kraft Gen. Foods, Inc., 774 F. Supp. 299, 312 (D.N.J. 1991)

("Even where a plaintiff does not seek counsel, an express statement

regarding his or her right to do so satisfies this factor."), aff'd, 968 F.2d

14 (3d Cir. 1992).

(e) Time to consider offer. Respondents must

have allowed Petitioners at least forty-five days to decide whether

to sign the releases. 29 U.S.C. § 626(f)(1)(F)(ii). In the instant

case, Respondents provided the minimum forty-five days for

consideration as stated expressly in the Information Sheet and

accompanying materials. (App., infra, 21a - 22a.)

Petitioners’argument is misleading on this point in stating that “the

releases did not mention that the Employees had at least 45 days

to consider the release.” (Pet. at viii.) The releases clearly

incorporated by reference documents provided to each Petitioner

that conspicuously pointed out the forty-five-day period. The

courts below properly discounted Petitioners’ contention of a lack

of notice of the forty-five-day window, finding that the Plaintiffs

“had the required time within which to consider the release."

(App., infra, 15a.) This Court should likewise reject Plaintiffs’

unsubstantiated and baseless allegations. Cormier v. Pennzoil

Exploration & Prod. Co., 969 F.2d 1559, 1561 (Sth Cir. 1992)

(construing Federal Rule of Civil Procedure 56 to mean that

hearsay contained in summary judgment affidavits and pleadings

is inadmissible to the same extent it is inadmissible at trial).

Moreover, even if there were summary judgment evidence to

support these allegations, it would not raise a triable issue of fact

because Respondents indisputably gave Petitioners the statutorily

mandated forty-five days to sign the release, as conceded by

Petitioners. (Pet. at viii ("[T]he release had to be received by the

company within the required 45 days.").)

(f) Allow seven days for revocation.

Respondents were required to allow Petitioners seven days to

revoke their acceptance of the offer contained in the release. 29

U.S.C. § 626(f)(1)(G). As mentioned above, Respondents

informed Petitioners that they had forty-five days to consider the

offer contained in the release and seven days after execution of the

release to revoke the offer. (App., infra, 21a, 23a, 25a.) The

record unquestionably establishes that only one individual, Maria

Fuentez, revoked her release within the seven-day revocation

period. Because Respondents complied with the express language

of the OWBPA, they fulfilled their statutory duty and satisfied this

prong of the waiver test. Petitioners’ unsupported allegation that

employees other than Ms. Fuentez were not allowed to make out-

of-time revocations’* in no way affects Respondents’ compliance

with the statute. The courts below, by all accounts, were aware

of Petitioners’ alleged attempts at late revocation and rejected them

as a basis for avoiding the releases.

(g) Provide termination information.

Respondents were required to provide the Petitioners, at the

beginning of the forty-five-day consideration period, information

about the groups of employees who were eligible for the exit

incentive program in connection with which the releases were

offered as well as lists of the job titles and ages of those not

eligible for the program. 29 U.S.C. § 626(f)(1)(H). Respondents

complied with this requirement by providing the lists of individuals

eligible and ineligible for the Severance Plan, their job titles, and

their ages in simple language. Respondents therefore satisfied this

portion of the OWBPA test.

Accordingly, as the courts below properly

determined, (App., infra, 2a, 16a,) the release offered by

Respondents and accepted by Petitioners comported with every

requirement of the OWBPA’s “laundry list,” rendering the releases

"knowing and voluntary" as a matter of law. 29 U.S.C. § 626(f);

see also S. Rep. No. 263, at 35, reprinted in 1990 U.S.C.C.A.N.

at 1540. The Court should therefore deny the petition because the

questions presented by Petitioners are irrelevant to the result

reached on the merits by the district court and the Fifth Circuit that

the releases comported with the OWBPA.

c. The Court Should Deny the Petition Because

There Is No Conflict Between the Court of

Appeals’ Application of the Common Law

Ratification/Tender-Back Doctrines to ADEA

Claims and This Court’s Decision Not to Invoke

Those Doctrines in Connection with FELA

Claims.

1. In Order to Prevent the Application of

Federal Common Law _ Contract

Doctrines to Petitioners’ ADEA

Releases, Petitioners Would Have to

Pet. at viii; id. at 7.

Demonstrate That Congress Intended to

Abrogate the Common Law in Enacting

the OWBPA.

Petitioners correctly point out that federal law,

rather than state law, governs the validity of releases of federal

causes of action, such as those brought by the Petitioners under the

ADEA, 29 U.S.C. §§ 621-34. See, e.g., Maynard v. Durham &

S. Ry., 365 U.S. 160, 161 (1961); Rogers v. General Elec. Co.,

781 F.2d 452, 454 (Sth Cir. 1986)."* Although this Court has

not directly addressed the validity of a release of claims under the

ADEA, it noted in passing on a related question involving Title

VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e to 2000e-

17 (1988 & Supp. V 1993), that waivers of rights under federal

antidiscrimination statutes must satisfy a “voluntary and knowing"

standard. Alexander v. Gardner-Denver Co., 415 U.S. 36, 52 &

n.15 (1974)."° That federal law controls the validity of such

waivers does not end the inquiry, however.

'S Interestingly, Petitioners do not complain about the findings of the

lower courts that the releases they signed bar their ERISA claims.

'® Several courts of appeals have specifically held that waivers of

ERISA claims must satisfy this “knowing and voluntary” standard. See,

e.g., Rodriguez-Abreu v. Chase Manhattan Bank, 986 F .2d 580, 587 (1st

Cir. 1993) ("ERISA does not prohibit a knowing and voluntary

relinquishment of employee benefits."); Laniok v. Advisory Comm. of

Brainerd Mfg. Co. Pension Plan, 935 F.2d 1360, 1365 (2d Cir. 1991)

(holding that an individual can waive rights under ERISA if the waiver

"is made knowingly and voluntarily"); Leavitt v. Northwestern Bell Tel.

Co., 921 F.2d 160, 162 (8th Cir. 1990) (stating that parties “can settle

a claim . . . under ERISA if the claim is knowingly and voluntarily

released"). Likewise, this same general standard governed releases of

causes of action under the ADEA prior to its replacemert with the

specific requirements of the Older Workers Benefit Protection Act, 29

U.S.C. § 626(f). See, e.g., O'Shea v. Commercial Credit Corp. , 930

F.2d 358, 361 (4th Cir.), cert. denied, 502 U.S. 859 (1991); Bormann

v. AT&T Communications, Inc., 875 F.2d 399, 403 (2d Cir.), cert.

denied, 493 U.S. 924 (1989); Shaheen v. B.F. Goodrich Co., 873 F.2d

105, 106-08 (6th Cir. 1989).

A release, after all, is a creature of contract. See,

e.g., Fleming v. United States Postal Serv. AMF O'Hare, 27 F.3d

259, 262 (7th Cir. 1994); Bank One, Tex., N.A. v. Taylor, 970

F.2d 16, 22 (Sth Cir. 1992)(applying Texas law) cert. denied, 113

S. Ct. 2331 (1993); Bartel Dental Books Co. v. Schultz, 786 F.2d

486, 488 (2d Cir.), cert. denied, 478 U.S. 1006 (1986); 76 C.J.S.

Release § 38 (1994). Accordingly, the federal courts by necessity

have crafted a body of special federal common law, drawn largely

from general contract law and the RESTATEMENT (SECOND) OF

CONTRACTS (1981), to fill the interstices left by Congress’ creation

of federal statutory rights that can be released.'? The absence of

explicit congressional guidance on the issue of releases of federal

civil rights led some federal courts to supplement the vague

“knowing and voluntary" standard with a “totality of the

circumstances” test, which includes a number of considerations for

determining the validity of a release,'* while others endorsed a

less stringent analysis under “ordinary contract principles."'? The

"The federal courts’ case-by-case creation of the federal

common law, or “perhaps more accurately [the] ‘law of

independent federal judicial decision,’" United States v. Standard

Oil Co., 332 U.S. 301, 308 (1947), accords with this Court’s

guidance concerning the waiver of rights conferred by federal

Statutes. See Town of Newton v. Rumery, 480 U.S. 386, 392

(1987).

'§ See Finz v. Schlesinger, 957 F.2d 78, 81 (2d Cir.), cert. denied,

113 S. Ct. 72 (1992); O’Hare v. Global Natural Resources, Inc. , 898

F.2d 1015, 1017 (Sth Cir. 1990); Bormann, 875 F.2d at 403; Cirillo v.

Arco Chem. Co., 862 F.2d 448, 452 (3d Cir. 1988).

'% See, e.g., O'Shea, 930 F.2d at 362; Lancaster v. Buerkle Buick

Honda Co., 809 F.2d. 539 541 (8th Cir.), cert. denied, 482 U.S. 928

(1987); Runyan v. National Cash Register Corp., 787 F.2d. 1039, 1045

(6th Cir.) (en banc), cert. denied, 479 U.S. 850 (1986).

differences in these tests often appeared more semantic than real,

and courts frequently reached the same results under both.”

Petitioners, relying on authority from the

Seventh” and Eleventh Circuits,” contend that the passage of

the OWBPA, in 1990, in which Congress established a set of

specific criteria for determining whether an ADEA waiver, as

distinguished from waivers of other statutory claims, was executed

knowingly and voluntarily,” has “occupied [the field in] this area

of the law."% In and of itself, Petitioners’ theory would not

present an untenable construction of the OWBPA. The difficulty

stems from the contrary positions taken by the Fourth and Fifth

Circuits, which, in connection with their resolution of releases of

ADEA claims both pre- and post-OWBPA, borrowed from the

RESTATEMENT (SECOND) OF CONTRACTS and general contract law

the doctrines of ratification and tender-back of the consideration

received in order to seek rescission.” In essence, the Petitioners

® See O'Shea, 930 F.2d at 362 & n.2; Mullen v. New Jersey Steel

Corp., 733 F. Supp. 1534, 1548 (D.N.J. 1990).

2! Oberg v. Allied Van Lines, Inc., 11 F.3d 679 (7th Cir. 1993), cert.

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

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

denied, 113 S. Ct. 412 (1992).

® See S. Rep. No. 263, 101st Cong., 2d Sess. 31-32 (1990),

reprinted in 1990 U.S.C.C.A.N. 1509, 1537.

* Pet. at 4.

* See Wittorf v. Shell Oil Co., 37 F.3d 1151, 1154 (Sth Cir. 1994);

Wamsley v. Champlin Ref. & Chem., Inc., 11 F.3d 534, 538-39 (Sth Cir.

1993), cert. denied, 115 S. Ct. 1403 (1995); O'Shea, 930 F.2d at 362

("It is a well-established proposition that the retention of the benefits of

a voidable contract may constitute ratification."); Grillet v. Sears,

Roebuck & Co., 927 F.2d 217, 220 (Sth Cir. 1991) ("A party cannot be

permitted to retain the benefits received under a contract and at the same

time escape the obligation imposed by the contract."); see also

Cumberland & Ohio Co. v. First Am. Nat'l Bank, 936 F.2d 846, 850 (6th

LR SS RET NST aT Rae a ee

argue that, in enacting the OWBPA, Congress spoke with such

clarity and precision that no room remained for the federal courts

to apply common law principles, such as the ratification and the

tender-back requirements, that had heretofore guided them in

passing on the validity of releases of federal statutory rights.

Acceptance of this proposal, of course, demands that Petitioners

elucidate a “clear and explicit" congressional intent to supplant

preexisting common law doctrines. Norfolk Redev. & Housing

Auth. v. Chesapeake & Potomac Tel. Co., 464 U.S. 30, 35-36

(1983). Furthermore, Petitioners must contend with the well-

established rule that "[C]ourts may take it as a given that Congress

has legislated with an expectation that the [common law]

principle{s] will apply except when a statutory purpose to the

contrary is evident.” United States v. Texas, 113 S. Ct. 1631,

1635 (1993) (internal quotation marks omitted, alteration in

original).” Finally, “there is no support . . . for the proposition

that [this] presumption has no application to federal common law."

United States v. Texas, 113 S. Ct. at 1634.

The issue raised by Petitioners centers on whether

the enumeration of specific requirements for finding the release of

an ADEA claim to be “knowing and voluntary" under 29 U.S.C.

§ 626(f) necessarily abrogated federal common law doctrines such

as ratification and tender of consideration. When Congress acts

with this purpose in mind, its intent is unmistakable. In the

present case, the legislative history of the Federal Employers

Liability Act ("FELA"), 45 U.S.C. §§ 51-60 (1988), the statute on

which Petitioners base their “no ratification” and “no tender”

Cir. 1991), cert. denied, 502 U.S. 1034 (1992); Anselmo v.

Manufacturers Life Ins. Co., 771 F.2d 417, 420 (8th Cir. 1985);

RESTATEMENT (SECOND) OF CONTRACTS §§ 7, 85 (1981); 76 C.J.S.

Release § 40 (1994).

% See also Astoria Fed. Sav. & Loan Ass'n v. Solimino, 501 U.S.

104, 108 (1991); County of Oneida v. Oneida Indian Nation of N.Y., 470

U.S. 226, 236 (1985); Isbrandtsen Co. v. Johnson, 343 U.S. 779, 783

(1952) ("Statutes which invade the common law . . . are to be read with

a presumption favoring the retention of long-established and familiar

principles, except when a statutory purpose to the contrary is evident.").

arguments, as well as the texts and statutory purposes of the

ADEA and the OWBPA, demonstrate that they were designed to

further different purposes and dealt with the existing common law

in radically different ways, thereby justifying the refusal to adopt

the common law in releases of FELA claims, but permitting the

common law’s adoption in with respect to age discrimination

claims.

2. FELA Was Primarily Intended to

Provide Recovery Under a Diminished

Standard of Causation for the Physical

Injuries of Railroad Employees.

Congress enacted FELA to provide remedies to

railroad employees for injuries and death resulting from accidents

on interstate railroads. 45 U.S.C. § 51; Consolidated Rail Corp.

v. Gottshall, 114 §. Ct. 2396, 2403 (1994).” When FELA was

originally passed in 1908, hundreds of thousands of workers per

year were losing their lives, or suffering terrible injuries, while

working for railroads. See Melvin L. Griffith, The Vindication of

a National Public Policy Under the Federal Employers’ Liability

Act, 18 Law & Contemp. Probs. 160, 167-68 (1953)(quoting 45

Cong. Rec. 4034 (1910)). Congress designed FELA to address

these physical injuries, i.e., "‘to put on the railroad industry some

of the cost for the legs, eyes, arms, and lives which it consumed

in its operations.’" Gottshall, 114 S. Ct. -at. 2404 (quoting

Wilkerson v. McCarthy, 336 U.S. 53, 68 (1949) (Douglas, J.,

concurring)).

The language of FELA is "as broad as could be

framed," Urie v. Thompson, 337 U.S. 163, 181 (1949), and

provides a remedy for any person injured while employed by a

railroad "for such injury or death resulting in whole or in part

from the negligence of any of the officers, agents, or employees

of [a railroad]." 45 U.S.C. § 51. Consistent with the broad

7” See also Atchison, T. & S.F. Ry. v. Buell, 480 U.S. 557, 561

(1987)("Congress enacted the FELA to provide a federal remedy for

railroad workers who suffer personal injures as a result of the negligence

of their employer or their fellow employees. ").

language of the statute, and its “humanitarian purposes," this Court

has “liberally construed FELA to further Congress’ remedial

goal." Gottshall, 114 S. Ct. at 2404. An employer may incur

liability under FELA if “‘employer negligence played any part,

even the slightest, in producing the injury or death for which

damages are sought.’" Jd. (quoting Rogers v. Missouri Pac. R.R.,

352 U.S. 500, 506 (1957)).

Thus, the Supreme Court has upheld jury verdicts

in cases that might have had difficulty surviving at common

law.% This Court and lower courts have construed the statute to

provide a per se negligence recovery when employees are injured

because of statutory violations, even when the injuries were not the

type the statute originally sought to prevent. See Kernan v.

American Dredging Co., 355 U.S. 426, 432-36 (1958). “Indeed,

in the spirit of broad construction, the FELA has been construed

to cover some intentional torts even though its text only mentions

negligence." Buell, 480 U.S. at 562 n.8. In establishing “a

relaxed standard of causation ... under FELA," Congress

expressly abolished the common law defenses of assumption of risk

and contributory negligence and prevented covered employers from

contracting around FELA liability. Gottshall, 114 S. Ct. at 2404;

see also 45 U.S.C. §$§ 53-54; Griffith, supra, at 168 (citing 45

Cong. Rec. 4034 (1910)). In sum, "[a] primary purpose of the

Act was to eliminate a number of traditional defenses to tort

liability and to facilitate recovery in meritorious cases." Buell,

480 U.S. at 561.

Even so, this Court has observed that common law

principles, “unless they are expressly rejected in the text of the

Statute, ... are entitled to great weight" in FELA cases.

Gottshall, 114 S. Ct. at 2404; Buell, 480 U.S. at 1417 ("FELA

jurisprudence gleans guidance from common law developments.").

As a result, when Congress explicitly sought to depart from the

common law, as with the abolition of the contributory negligence

and assumption of risk rules, this Court has respected that

% See, e.g., Gallick v. Baltimore & O.R.R., 372 U.S. 108, 113

(1963) (holding a jury had sufficient evidence to find FELA liability when

an employee lost both of his legs after an insect bite, on the theory the

insect was attracted to a stagnant pool which the railroad knew about).

ET SR ee

legislative intent. Gottshall, 114 S. Ct. at 2404. When Congress

has been silent on an issue implicating the common law vis-a-vis

FELA or other law, however, the Court has determined that

"common-law principles must play a significant role in [its]

decision.” Jd. In short, when Congress seeks to displace the

common law, under FELA or any other statute, it knows how to

make plain that intent. That intent was clearly evidenced in

FELA, but that fact does not ensure the same result under any

other statute.

Another distinguishing feature of FELA centers on

its hostility toward contractual limitations of liability, such as

releases. When the FELA was passed, railroad employees were

at the mercy of railroad attorneys on the one hand, trying to

cheaply buy employees out of their claims, and “ambulance

chasing lawyer[s]" on the other. Griffith, supra, at 169-73. “In

many cases settlements wholly inadequate in the light of the

seriousness of the injuries and the responsibility of the employers,

had been made with [injured workers] who were either entirely

devoid of any knowledge of their rights in such matters, or who

had been induced to make cheap settlements by misrepresentations

indulged in by those who sought to effectuate these settlements."

Id. at 173. Recognizing the potential for this abuse, when

Congress passed FELA in 1908, it also enacted a section of the

Statute that specifically disallows employers from contractually

limiting their FELA liability. FELA provides 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 by this chapter, shall to that extent be void."

45 U.S.C. § 55; see also Buell, 480 U.S. at 561. Even with such

explicit language, the Supreme Court originally did not ban

releases of FELA claims. In Callen v. Pennsylvania Railroad, 332

U.S. 625 (1948), the Court held § 55 did not bar a release of

claims. The Court carefully distinguished a release from the

language of 45 U.S.C. § 55.

It is obvious that a release is not a device to

exempt from liability but is a means of

compromising a claimed liability and to that extent

recognizing its possibility. Where controversies

exist as to whether there is liability, and if so for

how much, Congress has not said that parties may

not settle their claims without litigation.

Callen, 332 U.S. at 630-31.

Against this historical and legislative backdrop, the

Court in Hogue v. Southern Railway, 390 U.S. 516 (1968)(per

curiam), did not overrule Callen, but it did state a rule which

seemed more in keeping with the particular purposes of the FELA.

Hogue held that injured railroad workers did not have to tender-

back the consideration they received from the railroad before filing

suit under the FELA. /d. at 517-18. In so holding, however, the

Hogue Court specifically grounded its decision on the public policy

embodied by FELA:

[A] rule which required a refund as a prerequisite

to institution of suit would be "wholly

incongruous with the general policy 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 (citation omited) (emphasis added). In short, the Fifth

and Fourth Circuits’ decisions to apply the common law in lieu of

Hogue in the context of ADEA releases” derives largely from the

fact that Hogue construed the specialized liability scheme

established by FELA.”

*” Wamsley, 11 F.3d st 540-41; O'Shea, 930 F.2d at 362-63.

* As Chief Judge Pomer of the Seventh Circuit noted in Fleming,

“we do not think the Supreme Court’s decision in Hogue can be detached

from its context." 27 F.id at 261. Interestingly, although the Fleming

court had no occasion toaddress directly whether Oberg was correctly

decided, the Seventh Circuit did observe that the rationale behind Oberg

was “a little obscure.” .

3. In Enacting the ADEA, and Specifically, the

OWBPA, Congress Sought to Address Very

Different Concerns and Promote Very Different

Policies Than Those at Issue in FELA.

As noted by this Court, the primary focus of the

ADEA centers on "‘promot[ing] [the] employment of older persons

based on their ability rather than age; to prohibit arbitrary age

discrimination in employment; [and] to help employers and

workers find ways of meeting problems arising from the impact of

age on employment.’" Gilmer v. Interstate/Johnson Lane Corp.,

500 U.S. 20, 27 (1991)(third alteration in original)(quoting 29

U.S.C. § 621(6)). Unlike FELA, the aggrieved ADEA plaintiff

is not entitled to an almost guaranteed right of recovery if he can

show that he was injured. Importantly, an employee’s right to

pursue legal remedies occurs only after the Equal Employment

Opportunity Commission ("EEOC") has attempted to pursue

informal methods of conciliation, and only if the EEOC does not

want to pursue the employee’s claim on its own. 29 U.S.C.

§ 626(d) (1988). While the FELA was designed primarily to give

legal remedies to workers who were physically injured, the ADEA

“is not a general regulation of the workplace but a law which

prohibits discrimination." McKennon v. Nashville Banner

Publishing Co., 115 S. Ct. 879, 886 (1995); see also 29 U.S.C.

§§ 623, 626 (1988 & Supp. V 1993). The amounts owing for

ADEA violations will only be “unpaid minimum wages or unpaid

Overtime compensation." 29 U.S.C. § 626(b). Liquidated

damages are payable only for willful violations. Hazen Paper Co.

v. Biggins, 113 S. Ct. 1701, 1708 (1993). Moreover, the statutory

exceptions to the ADEA give employers specific justifications for

discharging older workers. See 29 U.S.C. § 623(f) (1988 & Supp.

V 1993). For example, the ADEA specifically states that an

employer can terminate an older employee for good cause, and

may discriminate against older employees if “age is a bona fide

occupational qualification reasonably necessary to the normal

operation of the particular business." 29 U.S.C. § 623(f). In

addition, unlike FELA’s “liberal construction . . . by this Court,"

Urie v. Thompson, 337 U.S. 163, 182 (1949), a defendant incurs

liability under the ADEA only where the plaintiff carries his

“ultimate burden of persuasion,’” i.e., shows that he was

unlawfully discriminated against because of his age. St. Mary’s

Honor Ctr. v. Hicks, 113 S. Ct. 2742, 2749 (1993). The fact of

discrimination is one that must be affirmatively found, not one that

is merely presumed as a result of an adverse employment decision.

Id. & n.4. Thus, the purpose of the ADEA is not to guarantee

compensation for older workers, but to promote their employment.

Congress enacted the OWBPA waiver provision to

ensure that older workers do not waive their rights under the

ADEA because of fraud, duress, coercion, or mistake of material

fact. S. Rep. No. 263, 101st Cong., 2d Sess. 31-32 (1990),

reprinted in 1990 U.S.C.C.A.N. 1509, 1537. The OWBPA thus

provides certain protections for older workers who were asked to

waive their potential age discrimination claims. However;the act

is not nearly as paternalistic as the FELA. The OWBPA expressly

provided, for the first time, that employees could sign waivers

without EEOC supervision. See S. Rep. No. 263 at 31, reprinted

in 1990 U.S.C.C.A.N. at 1537. The EEOC had earlier issued a

ruling allowing unsupervised waivers of ADEA claims as long as

those waivers were “knowing and voluntary." H.R. Rep. No.

664, 101ist Cong., 2d Sess. at 19 (1990). The EEOC reasoned that

“requiring government supervision of waivers was at odds with the

ADEA goal of ensuring expeditious resolution of disputes." /d.

Initially, members of Congress rejected the idea of unsupervised

waivers, concerned that older workers would be disadvantaged

because of the “‘inherently different bargaining power of

employers and employees.’" Jd. at 20 (quoting 133 Cong. Rec.

$14383 (Oct. 15, 1987)) (remarks of Sen. Melcher, Chairman of

the Special Committee on Aging). However, the final version of

the Act ultimately followed the EEOC’s recommendation, by

providing for valid waivers of ADEA claims without EEOC

supervision, see 29 U.S.C. § 626(f), in stark contrast to FELA’s

ban on contractual limitations of liability, see 45 U.S.C. § 55.

Requiring an employee to tender-back the

consideration he received from the release of claim before that

employee files suit would be consistent with the goals of the

ADEA, and specifically, the OWBPA. Nowhere in the legislative

history of the OWBPA did Congress express an intent to prevent

federal courts from utilizing common law principles such as

ratification. Additionally, the legislative history does not contain

aural

a shred of evidence to support the conclusion that Congress sought

to render void, and thus not subject to the doctrines of ratification

and tender of consideration, any release not complying in every

respect with the requisites of 29 U.S.C. § 626(f). The absence of

such an explicit or even implicit directive from Congress casts

serious doubt on the viability of the Petitioners’ argument. United

States v. Texas, 113 S. Ct. 1631, 1634-35 (1993). The dearth of

commentary in the legislative history of the OWBPA concerning

common law doctrines makes the Petitioners’ task in carrying this

burden virtually insurmountable. 7

Moreover, such a requirement would not conflict

with the ADEA’s primary goal of prohibiting age discrimination,

for the OWBPA specifically states that no waiver agreement will

affect the EEOC’s enforcement of the ADEA or will be able to

interfere with an employee’s right “to file a charge or participate

in an investigation or proceeding conducted by the Commission."

29 U.S.C. § 626(f)(4). By contrast, requiring an employee to

tender back the consideration of his release before filing suit is

consistent with the ADEA’s goal of encouraging litigants to settle

their disputes informally, without litigation. 29 U.S.C.

§ 626(b).*" If employees are not forced to return money they

received in consideration for a release of claims before filing suit,

the employees will be able "to have it both ways," O'Shea v.

Commercial Credit Corp., 930 F.2d 358, 363 (4th Cir.), cert.

denied, 112 S. Ct. 177 (1991), which “would encourage releasors

with potential ADEA claims to postpone raising such claims and

asserting the invalidity of their releases until the latest possible

date, because they would have nothing to lose and the continued

receipt of release benefits to gain." Seward v. B.O.C. Div. of

Gen. Motors Corp., 805 F. Supp. 623, 633 (N.D. Ill. 1992).

Employers would soon stop paying employees for their releases

thereby thwarting the public policy favoring voluntary settlement.

* Of. Occidental Life Ins. Co. v. EEOC, 432 U.S. 355, 367-68

(1977(observing that Congress has “selected ‘[c]ooperation and voluntary

compliance . . . as the preferred means for achieving’ the goal of equality

of employment opportunities") (alteration in original); Williams v. Phillips

Petroleum Co., 23 F.3d 930, 935 (Sth Cir. 1994)("Public policy favors

voluntary settlement of claims and enforcement of releases").

Williams, 23 F.3d at 935; Constant v. Continental Tel. Co., 745

F. Supp. 1374, 1379 (C.D. Ill. 1990). The text and legislative

histories of the ADEA and OWBPA show that Congress never

intended this result.

D. Since HL&P Provided All of the Petitioners With

Consideration to Which They Were Not Otherwise

Entitled, the Releases Were Supported by Valid

Consideration, Thereby Defeating Petitioners’ Claim to

an Additional Sixty Days’ Pay.

Petitioners contend, as they have throughout this

litigation, that they are somehow entitled to an additional sixty

days’ pay because they misunderstood the language of the releases

they signed and the materials incorporated therein.” Petitioners

have repeatedly ignored the fact that a release passes muster as

long as the employer has offered and the employee has accepted

consideration to which the employee was not already entitled.

Maynard v. Durham & S. Ry., 365 U.S. 160, 163 (1961); O’Hare

v. Global Natural Resources, Inc., 898 F.2d 1015, 1017 (Sth Cir.

1990). In this case, those individuals who chose not to sign the

waiver and participate in the STEP Severance Program still

received pay and full benefits for sixty days after notification of

selection for separation and the option of extended benefits under

COBRA. By contrast, employees who chose to sign a release

within forty-five days of receipt of the "Severance Pay Plan"

received the following additional benefits, as outlined in the

documents provided to all the Petitioners:

1) A severance pay benefit equal to a certain

number of weeks of pay for each year of

service based on a table, with a minimum

of 12 weeks (the first 60 calendar days of

which will be your severance notification

period) and a maximum of 52 weeks (the

first 60 calendar days of which will be

your severance notification period). See

page 5 for determination of the lump-sum

2 Pet. at 10-11.

severance pay benefit you will receive

after the severance notification period.

2) Continuation of your BenefitsPlus Medical

and Dental coverage for you and your

dependents, if any, for a stated period

based on your age and service.

3) Continuation of your BenefitsPlus Basic

Life Insurance Coverage for 12 months

following your termination date, unless

you receive retiree life insurance benefits

instead.

4) An enhanced 65-Point pension if you are

vested in the Retirement Plan and the total

of your age and years of service equals 65

points or more.

5) Free career transition services.

Clearly, these severance benefits comprised more

than a mere “token” and constituted remuneration to which

Petitioners had no preexisting right. Furthermore, as noted in sub-

paragraph 1 describing these additional benefits, supra, Petitioners

were on notice that the first sixty calendar days of their additional

severance benefits would be a period during which they need not

present themselves for work and a period which would coexist

with the sixty day period in which all employees would receive

their regular pay regardless of whether they signed a release. In

short, at a minimum, even the most junior employees who signed

releases received, in addition to the other elements of additional

consideration, at least four weeks’ more pay than non-releasing

employees. This constitutes valid and sufficient consideration to

Support the releases, as the courts properly held below. See

Strozier v. General Motors Corp., 635 F.2d 424, 426 (Sth Cir.

Unit B Jan. 1981)(holding that Plaintiffs “cannot now request

additional monetary relief merely because [they are] dissatisfied

with the amount [they] voluntarily agreed to accept in the

settlement as compensation for [their] claims"). Furthermore, as

the district court held, (App., infra, 17a - 18a), the unambiguous

terms of the summary plan description, the information sheet, and

eR een ee ee nn ee

the release itself prevent the Petitioners from raising a triable fact

issue On their multifarious fraud claims.

E. Petitioners Failed to Raise Their ERISA Argument

Below, and This Court Should Refuse to Consider It

for the First Time in the Petition for Certiorari.

In a variation of their sixty-days’ pay argument,

Petitioners now seek to assert that Respondents’ calculation of their

severance benefits violated ERISA. (Pet. at 13.) Petitioners’

argument, aside from being patently unmeritorious, arises far too

late in this litigation to merit consideration by this Court. As this

Court has recognized, even a constitutional right, much less a

ground of recovery in civil litigation, may be waived--or deemed

waived--by a party’s failure to assert the right or claim in a timely

manner. See, e.g., Kamen v. Kemper Fin. Servs., Inc., 500 U.S.

90, 97 n.4 (1991)(declining to entertain issues not raised before the

court of appeals); Michel v. Louisiana, 350 U.S. 91, 99

(1955)(observing that “‘[nJo procedural principle is more familiar

to this Court than that a constitutional right may be forfeited in

criminal as well as civil cases by the failure to make timely

assertion of the right’"). In the instant case, Petitioners in one of

the consolidated actions below initially asserted a claim under

ERISA. However, neither in the briefing on the parties’ cross-

motions for summary judgment, nor in the briefing before the

court of appeals did Petitioners aver that ERISA somehow relieved

them from the terms of releases they signed or rendered those

releases invalid. Rather, Petitioners’ argument is a wholly new

one that the Court should reject as dilatory.”

* Even if considered on the merits, this claim is baseless.

Respondents did not act arbitrarily and capriciously (and thus did not

violate ERISA) by providing different benefits to those employees who

chose, knowingly and voluntarily, to accept the enhanced severance

benefits in exchange for signing a release and those who chose to decline

the offer. Harian v. Sohio Petroleum Co., 677 F. Supp. 1021, 1026-27

(N.D. Cal. 1988)(holding that employer who “created and offered . . .

[a severance plan] for certain employees who were terminated," which

was conditioned on signing a release, did not violate ERISA).

CONCLUSION

For the aforementioned reasons, the Court should

DENY the petition for certiorari to the Court of Appeals for the

Fifth Circuit.

Respectfully submitted,

L. CHAPMAN SMITH

Counsel of Record

TONY P. ROSENSTEIN

MATTHEW P. EAstus

BAKER & BOTTS, L.L.P.

3000 One Shell Plaza

910 Louisiana

Houston, TX 77002

(713) 229-1234

FAX: (713) 229-1522

Attorneys for Respondents

APPENDIX A

IN THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

NO. 94-20358

BARBARA NORTON, ET AL.,

PLAINTIFFS - APPELLANTS,

VS.

HOUSTON INDUSTRIES

INCORPORATED, et al.

DEFENDANTS - APPELLEES.

Before WISDOM, REYNALDO GARZA and GARWOOD,

Circuit Judges.'

PER CURIAM:

Having considered the briefs and arguments of

counsel and the relevant portions of the record, this Court is

convinced that the district court’s judgment is correct, essentially

' Local Rule 47.5 provides: “The publication of opinions that have

no precedential value and merely decide particular cases on the basis of

well-settled principles of law imposes needless expenses on the public and

burdens on the legal profession." Pursuant to that Rule, the Court has

determined that this opinion should not be published.

for the reasons given by the district court. Defendants’ summary

judgment evidence showed that the releases were valid and in

accordance with the law, and plaintiffs produced no summary

judgment evidence to support a contrary finding. The record

refutes the contention that plaintiffs were not allowed forty-five

days in which to consider the releases before signing them. Under

Delaware State College v. Ricks, 101 S.Ct. 498, 504 (1980)

plaintiffs’ argument that they were releasing claims arising after

the date of the releases is without merit. Plaintiffs’ conclusory

affidavits did not suffice to raise fact issues. See Anderson v.

Liberty Lobby, Inc., 106 S.Ct. 2505, 2510 (1986). Moreover,

plaintiffs failed to tender back any of the consideration received for

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

(Sth Cir. 1991); Wamsley v. Champlin Ref. & Chem, Inc., 11 F.3d

534 (Sth Cir. 1993); Wittorf v. Shell Oil Co., 37 F.3d 1151, 1154

(Sth Cir. 1994).

Under all the circumstances, we find no abuse of

the district court’s discretion in its denial of plaintiffs’ motion for

leave to amend, which was filed after the defendants’ motion for

summary judgment. The judgment of the district court is

AFFIRMED.

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

BARBARA NORTON, ET AL§

Plaintiffs,

VS. CIVIL ACTION

NO. H-92-3239

HOUSTON INDUSTRIES

INCORPORATED, ET AL.,

00P GOP 609 GOP 60) 60) 60) 60) 608

Defendants.

MEMORANDUM OPINION AND ORDER

Pending before the Court are the plaintiffs’ motions

for class certification, to dismiss, for judgment on the pleadings,

and for summary judgment (instrument #49). Also pending are the

defendants’ cross-motion for summary judgment, (instrument #59,

#60), an additional cross-motion by the plaintiffs (instrument #64);

and the parties’ responses, supplemental responses, replies and

surreplies (instruments #58, #60, #64, #65, #67, #69) to each of

the other’s motions. The plaintiffs have also moved to file a

supplemental complaint, which the defendants opposes (instruments

#62, #70).

The plaintiffs brought claims in four separate

lawsuits. In Anzaldua, et. al. v. McKinsey & Co., et. al., No. 93-

0400, the plaintiffs assert state law claims. That suit was removed

from state court to the Federal Court. In Fuentez, et. al. v.

Houston Indus., Inc. et. al., No. 92-2728, the plaintiffs claim a

violation of the Worker Adjustment and Retraining Notification

Act and in Pace, et. al. v. Houston Indus., Inc., et. al., No. 93-

0430, the plaintiffs asserted claims under the Employee Retirement

Income Security Act and Age Discrimination in Employment Act.

In the interest of judicial economy, the Court has

consolidated these cases for the purpose of determining the issue

of the effect the signing of releases by various employees has, if

any, on the causes of action asserted in the various lawsuits.

Except for Cause No. H-92-2728, the cases are otherwise

consolidated into this case for all purposes.

FACTUAL BACKGROUND

Houston Lighting and Power Company ("HL&P")

and Utility Fuels, Inc. ("UFI"), wholly owned subsidiaries of

Houston Industries, Incorporated ("HII"), terminated

approximately 1100 employees in June of 1992. The plaintiffs are

some of the terminated employees. HII administers the companies

employee retirement plan and is therefore, a party to this litigation.

In January of 1992, prior to an April notification

of termination, HL&P issued a one-page announcement stating the

following:

Under the severance plan, the Company will

provide separated employees compensation equal

to 3 weeks of salary per year of service with a

minimum of 12 weeks pay and a 52 week

maximum. The first 60 days, separated employees

will continue to be paid and receive benefits as if

they were still employed. Then, they will receive

a lump sum payment for the balance.

On or before April 5, HL&P supervisors notified

960 employees of their severance and gave each a severance

package. The package contained a letter from HL&P stating that

full salary and benefits would continue for 60 days, and that the

employees could participate in a severance plan if they timely

executed 3 release waiving claims against the company. The letter

further informed employees that they would receive the release and

pay plan by mail during the week of April 13. The package also

contained a 27-page Success Through Excellence in Performance

brochure, describing severance benefits.

As announced, during the week of April 13, HL&P

mailed each targeted employee the pay plan package. A letter

from the company president accompanying the package stated in

bold face type in relevant part:

To accept the severance Pay Plan Offer, you

must sign the enclosed Agreement and Release

and return it to HL&P Employee

Benefits...within 45 days of receipt of this

package. You may revoke your Agreement and

Release within 7 days after signing it, but if you

revoke it, you will lose your rights to Severance

Pay Plan benefits.

Concurrently, UFI targeted 49 individuals for

severance and they were provided a similar, if not identical

severance benefits package. The package contained a severance

benefits brochure and a letter similar to that supplied to the HL&P

employees.

Most, but not all of the HL&P and UFI targeted

employees signed the “Agreement and Release". The release,

which ailows seven days for revocation states, in part:

In exchange for the Company’s payment to me of

the severance benefits, I agree not to sue, and I

waive all claims and release the Company -- from

liability and damages related in any way to my

employment with or separation from the Company

or its affiliates. This waiver and release includes,

but is not limited to, claims and causes of action

under Title VII of the Civil Rights Act of 1964, as

amended; the Civil Rights Act of 1991; the Age

Discrimination in Employment Act of 1967, as

amended, the Civil Rights Act of 1866, the Texas

Commission on Human Rights Act; the Americans

with Disabilities Act; the Older Workers Benefit

Protection Act of 1990; the Employee Retirement ,

Income Security Act of 1974, as amended (except

as it relates to employee benefit plans qualified

under Section 401 (a) of the Internal Revenue Code |

of 1986); the Worker Adjustment and Retraining |

Notification Act; all state and federal statutes and |

regulations; all oral or written contract rights; and

the common law, such as tort or personal injury of

any sort. |

The 60-days pay benefit that had been announced

in January was mentioned in the severance benefit brochures and

States:

During the 60-day severance notification period,

you will receive your regular pay and benefits.

As soon as possible after the end your severance

notification period, you will receive a severance

pay benefit in a lump sum cash payment, provided

the Company receives your signed Agreement and

Release within the required 45 days and you do

not revoke it during the 7-day notification period. :

» prey a Te

The calculation for the additional lump sum

payment beyond the 60-days pay was also contained in the

brochures and plans. In essence, an employee would receive a

minimum of four weeks pay for one year of service up to a

maximum of 44 weeks pay for 18 years or more of service. All

severed individuals received the 60-days pay benefit whether they

signed a release or not.

PLAINTIFF’S CONTENTIONS

The plaintiffs allege that the defendants concocted

a scheme to cut costs and medical benefits by laying off older

employees, employees who were injured or had iil family

members, and others perceived as troublemakers. In addition, the

plaintiffs claim that the 60-days pay benefit is in addition to the 60-

days full salary and benefits, that is paid to all severed employees.

The plaintiffs assert that the defendants deducted the additional 60-

days benefit before paying the lump sum benefit, thus, violating a

term of the severance package.

In their motion for summary judgment, the

plaintiffs list eight reasons that the “Agreement and Release” is not

valid. They state that the release: (1) does not contain an offer;

(2) fails to specify the amount of consideration; (3) is not signed

by the party to be charged; (4) is indefinite because (a) the amount

of consideration is not specified, (b) it is not signed by the

defendants, and (c) essential terms are not within the four corners;

(5) is invalid because the defendants failed to explain the terms of

offer, and the terms, conditions, method and manner of

acceptance; (6) is ambiguous and should be construed against the

drafter; (7) violates the parol evidence rule by referring to other

documents and by containing indefinite essential terms; and (8) is

unconscionable because of disparity in bargaining power.

In addition to the argument that the release is

invalid, the plaintiffs argue that the release does not waive an ADA

action because to do so violates the Old Worker’s Benefit

Protection Act ("OWBPA"). The plaintiffs assert that the release

attempts to waive rights arising after its execution, because the

plaintiffs’ action relates to the termination of the employment

relationship on June 5, 1992. The plaintiffs also argue that the

release violates the OWBPA because the employees did not have

the required 45 days to consider it before signing.

The defendants respond that the employees’ rights

accrued when they were notified on or about April 6, 1992, of

their June Sth termination date. The defendants also contend that

the release is definite. They assert that it contains an identifiable

offer, states its intent, does not need to state a precise dollar

amount, and may refer to other documents. The defendants also

argue that their signature is not required to establish a contract and

that they had no duty to explain the terms of the offer to the

employees. The defendants maintain that any disparity in

bargaining power does not mean that the release is unconscionable.

Moreover, they argue, by signing the release the plaintiffs ratified

it.

In the defendants’ cross-motion for summary

judgment, the defendants contend that the plaintiffs knowingly and

voluntarily waived their federal law claims under the “totality of

the circumstances" test because: (1) the release is simple and

comprehensible in light of the plaintiffs’ education and business

experience; (2) the plaintiffs had ample time--at least forty-five

days to consider the release; (3) the plaintiffs were similarly

treated because individual treatment was impractical and the

plaintiffs exclusion from deciding the terms of the release is not

dispositive; (4) the release was written simple and clear; (5) the

release advised the plaintiffs to consult with an attorney; and (6)

the plaintiffs received additional consideration beyond that which

they were entitled for agreeing to the release.

Finally, the plaintiffs seek to dismiss the

defendants’ counterclaim and affirmative defense of waiver and

release under Fed.R.Civ.Proc. 12(b)(6) and alternatively for

judgment on the pleadings under Fed.R.Civ.Proc. 12(c).

The plaintiffs requested certification as a class

action, and because some of the plaintiffs belong to bargaining

units represented by the Union and have filed grievances to

determine if the company’s termination procedure violated the

collective bargaining agreement, the Union was sued. The Union

seeks summary judgment contending that the validity of the release

should be determined by an arbitrator in the individual employee

grievance procedures. Alternatively, and if the release is held to

valid and enforceable, the claims of the empioyees against the

Union should be dismissed as moot.

AUTHORITIES AND DISCUSSION

Federal Rule of Civil Procedure 56(c) provides that

summary judgment is proper “if the pleadings, depositions,

answers to interrogatories, and admissions on file, together with

the affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to judgment as

a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317 (1986)

In determining whether the movant has met this burden, the Court

should consider the evidence and the inferences in the light most

favorable to the nonmovant. Impossible Electronics Techniques,

Inc. v. Wackenhut Protective Systems, Inc., 669 F.2d 1026, 1031

(Sth Cir. 1982).

Despite the parties’ numerous filings and

contentions, the issues are simple and require the Court to

determine the validity and enforceability of the releases. These

issues will be addressed in turn.

I. VALIDITY

In the Court’s opinion, the plaintiffs’ several

arguments that the release is not valid, fail. First, the release

contains an offer. Its first sentence states, "In its offer letter to

me, (the Company] offered to pay me . . ." The second sentence

States, “I choose to accept this offer." Thus, the lack of offer

argument is unmeritorious.

The plaintiffs next argue lack of consideration.

There is consideration. The release refers to the consideration as

“the severance benefits as described in the HII Severance Pay Plan,

as effective March 30, 1992 through June 30, 1992." Texas law

does not require that the specific dollar amount be stated. See

Penwell v. Barrett, 724 S.W.2d 902, 905 (Tex. App.--San Antonio

1987, no writ). It is not a mystery, though, what each employee

will receive. Nevertheless, the contract required the nlaintiffs to

forego legal claims in exchange for the severance package.

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The plaintiffs also argue that the defendants did not

sign the contracts. This is a false issue because only the party

charged with accepting the offer must sign to effectuate the

contract. See Clegg v. Brannan, 234 S.W. 1076 (Tex. 1921). In

the Court’s opinion, the absence of the defendants’ signature is of

no consequence in determining the issue of validity.

The plaintiffs argue as well that the release is not

definite. The plaintiffs are also incorrect on the point. The

release specifically refers to the letter describing the HII Severance

Pay Plan. The terms of the letter are incorporated or subsumed by

the agreement. See MTrust Corp. N.A. v. LJH Corp., 837 S.W.2d

250 (Tex. App.--Fort Worth 1992, writ denied).

As a fifth argument, the plaintiffs assert that the

defendants had a duty to explain the term of the offer, or the

terms, conditions, and method of acceptance. The release states,

"I choose to accept this offer," “I understand that signing this

Agreement and Release is an important legal act", and “I

acknowledge that the Company has advised me to consult an

attorney before signing this Agreement and Release." The release

provided a line for a signature and a date signifying acceptance.

This is enough.

The plaintiffs’ argument that ambiguities should be

construed against the defendants is irrelevant. First, the plaintiffs

do not state what ambiguities exist. Nevertheless, in this Court’s

opinion, the release is unambiguous as a matter of law. See Derr

Constr. Co. v. City of Houston, 846 S.W.2d 854, 862 (Tex. App.-

-Houston [14th Dist.] 1992, no writ).

The plaintiffs next argue that the parol evidence

rule is violated by reference to other documents. The other

document referred to is the letter from HII, wherein the defendants

offered to pay severance benefits as described in the HII Severance

Pay Plan. Under the doctrine of incorporation by reference, the

letter and the pay plan became part of the release agreement when

the release was signed by the plaintiffs. MTrust Corp., 837

S.W.2d at 253-54.

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Finally, the plaintiffs argue that the disparity in

bargaining power make the release unconscionable. See

Southwestern Bell Tel. Co. v. Delanney, 809 S.W.2d 493, 498

(Tex. 1991) (3. Gonzalez, concurring). Unconscionability raises

an issue of enforceability, not validity. Therefore, even though the

release terms were non-negotiable, the plaintiffs were not forced

to accept its terms. To the contrary, the plaintiffs knew what they

were getting--severance benefits in exchange for release of any

claims against the defendants. The Court finds that the release is

not rendered invalid based on unconscionability.

Having determined the issue of validity, the Court

now turns to the issue of enforceability.

Il. ENFORCEABILITY

Federal Law Claims:

In the Court’s opinion, a release is enforceable

where the parties agree to its terms knowingly and voluntarily.

The factors determining a knowing and voluntary waiver depend

on the type of claim to be waived. The plaintiffs have alleged

various federal and state law claims and the Court shall address

each.

The plaintiffs incorrectly argue that ordinary

contract principles govern the enforceability of a release involving

ADA claims. The Fifth Circuit has utilized “totality of the

circumstances" test in determining whether a waiver was made

knowingly and voluntarily. O’Hare v. Global Natural Resources,

Inc., 898 F.2d 1015, 1017 (Sth Cir. 1990). Those factors are:

(1) The plaintiffs education and business

experience; (2) the amount of time the plaintiff

had possession of or access to the agreement

before signing it; (3) the role of the plaintiff in

deciding the terms of the agreement; (4) the clarity

of the agreement; (5) whether the plaintiff was

represented by or consulted with an attorney; and

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(6) whether the consideration given in exchange

for the waiver exceeds employee benefits to which

the employee was already entitled by contract of

law.

O’Hare, 898 F.2d at 1017. After the “totality of the

circumstances” test was pronounced, the Older Worker’s Benefit

Protection Act amended the ADA and prescribes minimum

requirements for a waiver. In the Court’s opinion, the totality of

the circumstances test is subsumed by the more stringent

requirements of the OWPBA. Therefore, if the release satisfies

the OWBPA, it satisfies the ADA totality of the circumstances test.

The OWBPA states:

(f) Waiver

(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 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 rights or claims

arising under this chapter;

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 is already entitled;

(E)

(G)

(H)

(i)

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the individual is advised in writing to

consult with an attorney prior to executing

the agreement;

(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.

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.

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 in

writing in a manner calculated to be

understood by the average individual

eligible to participate, as to--

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

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(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.

29 U.S.C.A. § 626(f) (West Supp. 1993).

The plaintiffs contend that the release violates

subsection (f)(1)(C) by attempting to cause the plaintiffs to waive

claims arising after the termination of their employee relationship

on June 5, 1992. The undisputed evidence shows that the

employees were notified by April 6 that their employment

relationship would terminate on June 5 and that the releases were

signed between April 14 and May 30. In the Court’s opinion, the

release does not attempt to waive any claims that might arise after

the execution date. As the defendants assert, any cause of action

relating to the employees’ discharge arose when the employee were

notified of the discharge on April 6, 1992, not the termination date

June 5, 1992. See Chardon v. Fernandez, 454 U.S. 6, 8 (1981).

However, at the latest, the causes of action, if any, arose seven

days after the releases were signed. Specifically, the causes of

action asserted here arose within the term of the employment.

The plaintiffs also argue that subsection (f)(1)(F)(ii)

was violated because, whether the defendants allowed the

employees 45 days to consider the release is a fact issue. The

plaintiffs assert that the defendants sent the release amidst stacks

of other documents, spread rumors that benefits would be lost if

not signed immediately, and told them that the tax consequences

were grave if the release was not signed by April 15. The

plaintiffs also argue that the 45-day period should have been a term

contained within the release document.

Subsection (f)(1)(F)(ii) requires that an individual

be given “at least 45 days within which to consider the agreement."

(emphasis added). Both the UFI and HL&P employees received

a letter and a release information sheet stating in conspicuous

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boldface type, that the release must be accepted and returned

within 45 days to be effective. The UFI employees received the

letter and information sheet when they were notified of their

severance and the HL&P employees received the notice dy mail on

or about April 13. The latest date that an individual returned a

release was May 30. In the Court’s opinion the plaintiffs not only

received the required notice but also had the required time within

which to consider the release before the Operative time wall,

June 5.

The plaintiffs next contend that fact issues exist as

to: (a) the plaintiffs’ role in deciding the release’s terms; (b) the

release’s clarity; (c) the plaintiffs’ education and business

experience, and whether the plaintiffs’ consulted with an attorney

prior to signing the release. These arguments fail to raise any fact

issues. Although the plaintiffs played no role in deciding the terms

of the severance plan; they, nevertheless, knew that they had a

choice to participating or not. They also knew that by signing the

release, they were waiving numerous causes of action.

On the question of clarity, the release is a one-page

document, printed in normal size type, and conspicuously entitled

“Agreement and Release." It states several times throughout that

the employee is waiving claims against the defendants for both

liability and damages. The release lists specific statutory laws that

are waived, both state and federal statutes and regulations and

common law contract and tort claims. The release refers to the

HII Severance Pay Plan and outlines the benefits to be received if

a release is timely executed. Finally, the pay plan presents the

terms of the severance benefits in an organized fashion. Both

severance brochures state in boldface type that, if there is any

conflict in terms, the HII Severance Pay Plan governs. Clarity is

not an issue here.

Despite the plaintiffs’ contention that the

defendants have not produced any evidence of their education and

business experience, the Court finds that the release is written in

a manner to be understood by the average individual eligible to

participate in the severance benefit plan, as required by subsection

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(f)(1)(A). Assuming that any individual could not understand the

particularities of the release, the document’s language places such

emphasis on the release that an individual cannot in good faith say

that adequate notice was not provided. The Court finds that the

plaintiffs did not blindly sign the release. Moreover, the release

States that it is an “important legal act” and advises the plaintiffs

to consult an attorney before signing.

Therefore, the Court finds that the defendants

complied with the OWBPA, and that the release waives the

plaintiffs’ ADA claims as well as the remainder of the plaintiffs’

federal law claims.

State Law Claims:

The plaintiffs’ state law claims are for breach of

contract, fraud, misrepresentation, conversion, and intentional

infliction of emotional distress. Under Texas law, a release is

treated like a contract. See Williams v. Gash, 789 S.W.2d 261,

264 (Tex. 1990). As discussed previously, a release is a valid

enforceable contract and may waive various state law claims.

However, a release is subject to defenses just as any other

contract. Williams, 789 S.W.2d at 264. The plaintiffs’ petition

raises the defenses of fraud and misrepresentation.

Under state and federal law, fraud is a defense that

must be plead with particularity. See Tobbon v. State Farm Mut.

Auto Ins. Co., 616 S.W.2d 243, 245 (Tex. Civ. App.--San

Antonio 1981, 1981, writ ref'd, n.r.e.). The charging party has

the burden of proving that a material misrepresentation was made,

that is false when made, or made with reckless disregard for the

truth, and as a positive assertion, made with the intention that it be

acted upon, is relied upon, and injury is suffered. Stone v.

Lawyers Title Ins. Corp., 554 S.W.2d 183, 185 (Tex. 1977).

In their original petition, the plaintiffs contend that

the defendants made "numerous misrepresentations and fraudulent

inducements surrounding the plaintiffs’ lay-off. These

misrepresentations as alleged, included statements that the

17a

defendants were losing money and that downsizing was necessary

when in fact the Company actually made gains. The petition

alleges that the defendants “developed a fraudulent scheme” to

circumvent the employee evaluation system, and that supervisors

“arbitrarily and capriciously" assigned employees points, thus,

manipulating the empioyee’s assessment. The plaintiffs also claim

that the defendants hired other persons for the same positions for

which the layoffs occurred. Finally, the plaintiffs assert that the

defendants through fraud and deceit, willfully refused to comply

with federal law; i.e. to give a 60-day notice that the employee

wouid be laid off, and represented that they would receive a 60-

day pay benefit in addition to three weeks for each year of service.

Taking the plaintiffs’ allegations as true, the

representations fail to state a cause of action that has any nexus to

the claims arising out of the signing of the releases. Whether it is

true that the defendants did not need to reduce the work force,

arbitrarily ranked employees for dismissal, hired other persons to

replace them, or did not give a proper 60-day notice, no relevance

is attached concerning the offer and its terms. Moreover, the

representations that the defendants made relevant to inducing the

plaintiffs to sign the release, were not false. The defendants’

January announcement stated that a severed employee was to

receive

---compensation equal to 3 weeks of salary per

year of service with a minimum of 12 weeks pay

and a 52 week maximum. The first 60 days,

separated employees will continue to be paid and

receive benefits as if they were still employed.

Then, they will receive a lump sum payment for

the balance.

All severed employees received the 60 days

continuous pay irrespective of the lump sum pay that was tied to

the release. The fact that the 60-day pay benefit is not included in

the HII Severance Pay Plan is unimportant because the pay period

began April 1, 1992. The HII severance pay plan applied to all

18a

targeted employees while the lump sum pay plan applied only to

targeted participating employees.

While it may be argued that the announcement

misrepresents how the benefits were to be distributed, no severed

employee suffered injury because each received the promised

benefits. The participating individuals received a lump sum

payment of at least four weeks pay in addition to the 60 days

continuous pay.

The plaintiffs contend, however, that the 60-days

pay was deducted from the lump sum benefit. This is not so.

According to the pay plan, the plaintiffs who signed releases would

received the 60-days pay between the notification and the

termination date, and also received 4 iump sum benefit of at least

four weeks pay. This procedure, if followed, is in compliance

with the contract.

The plaintiffs have moved to supplement their

complaint to add defenses of economic duress. estoppel,

unconscionability, and in the alternative, mutual mistake.’ In their

motion, the plaintiffs do not allege any supporting facts, but

merely list the causes in a single paragraph. The plaintiffs also

have cross-moved for summary judgment on these claims, albeit

prematurely. Because these claims arise out of the same nucleus

of facts as the plaintiffs’ other claims and raise no causes of action

not covered by the release, the Court denies the motion to amend.

The plaintiffs have sought class certification. This

request is moot because the plaintiffs who did not sign the releases

and the plaintiffs who revoked the release agreement within the

seven-day period, have not waived their causes of actions against

the defendants. Each may amend their causes of action in this

cause or in Cause number H-92-2728. These parties have 30 days

from the entry of this Order to amend their pleadings, accordingly.

'The proposed supplemental complaint also added a cause of action

for negligence. This action would be moot if leave were granted because

it is also waived by the release.

jean ‘ -

LSS ee ETE OSE TONG RE RN eee ETL TE NR eT PC eR en en

Pe ee eee ee

19a

cause or in Cause number H-92-2728. These parties have 30 day

from the entry of this Order to amend their pleadings, accordingly.

The Court DENIES the plaintiffs’ motions for

summary judgment, dismissal, for judgment on the pleadings, and

for cross-summary judgment. The Court GRANTS the defendants’

motion for summary judgment. The Union’s motion to dismiss is

Granted. The remaining plaintiffs are ORDERED to amend their

pleadings within 30 days and plead any causes of action that

remains either in this cause or cause number H-92-2728.

Finally, Cause Number H-92-2728, is returned to

Judge Melinda Harmon’s docket. Cause Number 93-0430 and 93-

0400 are administratively closed, the claims and parties in those

suits having been merged in this cause.

Any motion not addressed in this order is Denied.

It is so ORDERED.

KENNETH M. HOYT

UNITED STATES DISTRICT JUDGE

APPENDIX C

Dear Employee:

I regret to inform you of your permanent separation from

employment with Utility Fuels, Inc. Your salary and benefits will

continue for 60 days; however, you will no longer report to work

effective immediately. No bumping rights exist.

To assist you in the separation, the Company is offering you the

opportunity to participate in a voluntary program offered by

Houston Industries Incorporated. The program provides cash and

other benefits to you, which are described in the enclosed

brochure. Participation is limited to employees who timely execute

an Agreement and Release which waives all claims and releases the

Company, its affiliates, the employee benefit plans, their directors

and officers, employees, fiduciaries and agents from liability and

damages in any way related to your employment with or separation

from the Company or any of its affiliates. The Company will pay

you a lump sum severance pay benefit, enhanced welfare benefits

and a 65-Point pension (if eligibie), provided you sign the

Agreement and Release.

The severance benefits have been determined in accordance with

the Houston Industries Incorporated Severance Pay Plan, as

effective March 30, 1992 through June 30, 1992 (a copy of which

is enclosed). All benefits under this Plan are voluntary and

unconditional on the part of the Company and are not required by

any legal obligation other than the Plan itself. Information about

the severance pay benefit and the other benefits to which you may

be entitled are given in the material enclosed in this packet. You

are encouraged to read all the material thoroughly and carefully.

In approximately two weeks you will receive a personalized packet

with specific information about the benefits you will receive if you

accept the Severance Pay Plan offer. The packet will be sent to

the mailing address that you have on file with the Company. If

you have questions, you may call Employee Benefits (229-7373 or

2la

7374 in the Houston area and 1-800-932-7444 outside the Houston

area).

To accept the Severance Pay Plan offer, you must sign the

enclosed Agreement and Release and return it to UFI Human

Resources, P.O. Box 539, Houston, TX 77701, within 45 days

of receipt of this package. You may revoke your Agreement

and Release within 7 days after signing it, but if you revoke it,

you will lose your rights to Severance Pay Plan benefits.

If you need further information, call Gilbert Elizondo at 713-888-

4616.

Sincerely,

Don D. Sykora, Chairman

Compensation & Benefits Committee

P.O. Box 4567, Houston, Texas 77210 (713) 629-3000

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APPENDIX D

HOUSTON INDUSTRIES INCORPORATED

SEVERANCE PAY PLAN

(March 30, 1992-June 30, 1992)

AGREEMENT AND RELEASE INFORMATION

The Severance Pay Plan (the “Plan") is offered by Houston

Industries Incorporated (the “Company") to employees of the

Company, Houston Lighting & Power Company and Utility Fuels,

Inc. who are notified of involuntary termination between

March 30, 1992 and June 30, 1992. The Plan provides severance

benefits (as described in the enclosed plan document) only if you

sign an Agreement and Release within 45 days from the receipt of

this offer.

Severance benefits are voluntary and unconditional on the part of

the Company and are not required by any legal obligation other

than the documents underlying the Severance Pay Plan itself. All

persons within the description contained in the foregoing paragraph

are eligible for the Plan, regardless of job title, job classification,

Or organizational unit. The attached lists specify the positions

eliminated and those retained (detailed by job titles and ages).

Whether or not you accept this offer is entirely your choice. In

any event, you will receive 60 days’ salary and benefits and will

be eligible for COBRA (18-month) extension of medical and dentai

coverage, and any benefits you are otherwise entitled to under the

Retirement Plan for Employees of Houston Industries Incorporated

and the Savings Plan of Houston Industries Incorporated.

You may accept this offer only by signing the attached Agreement

and Release which waives your seniority rights and all claims, and

releases the Company, its affiliates, the employee benefit plans,

their directors and officers, employees, fiduciaries and agents from

liability and damages related in any way to your employment with

or separation from the Company and its affiliates. By signing the

attached Agreement and Release, you agree to return immediately,

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and to maintain in strictest confidence and not to use in any way,

any proprietary, confidential, or other nonpublic information or

documents relating to the business or affairs of the Company and

its affiliates.

Your decision to waive these claims and rights is an important

legal act, and you should consult with an attorney before executing

this Agreement and Release.

If you choose to accept this offer, your Agreement and Release

must be signed within 45 days from your receipt of these Plan

materials and returned to UFI Human Resources, P.O. Box

539, Houston, TX 77001.

If you choose to accept the severance benefits by signing, dating

and returning the enclosed Ag-eement and Release, you have an

additional seven days after you sing and date it during which you

may change your mind and revoke the Agreement and Release by

delivering a written statement to the Compensation and Benefits

Committee, Attn: Secretary, P.O. Box 61867, Houston, TX

77208.

In its offer letter to me, Houston Industries Incorporated (the

"“Company") offered to pay me the severance benefits as described

in the Houston Industries Incorporated Severance Pay Plan, as

effective March 30, 1992 through June 30, 1992, to waive

seniority rights and claims, and release the Company, its affiliates,

its employee benefit plans, their directors and officers, fiduciaries,

employees, and agents from liability and damages related to my

employment or separation from the Company or its affiliates. |

choose to accept this offer.

I understand that signing this Agreement and Release is an

important legal act. I acknowledge that I have received and had

an opportunity to review the lists of positions eliminated and those

retained (as detailed by job title and age). I acknowledge that the

Company has advise me to consult an attorney before signing this

Agreement and Release.

In exchange for the Company’s payments to me of the severance

benefits, I agree not to sue, and I waive all claims and release the

Company, its affiliates, its employee benefit plans, their directors

and officers, fiduciaries, employees and agents from liability and

damages related in any way to my employment with or separation

from the Company or its affiliates. This waiver and release

includes, but is not limited to, claims and causes of action under

Title VII of the Civil Rights Act of 1964, as amended; the Civil

Rights Act of 1991; the Age Discrimination in Employment act of

1967, as amended; the Civil Rights Act of 1866; the Texas

Commission on Human Rights Act; the Americans with

Disabilities Act; the Older Workers Benefit Protection Act of

1990; the Employee Retirement Income Security Act of 1974, as

amended (except as it relates to employee benefit plans qualified

under Section 401(a) of the Internal Revenue Code of 1986); the

Worker Adjustment and Retraining Notification Act; all state and

federal statutes and regulations; all oral or written contract rights;

and the common law, such as tort or personal injury of any sort.

25a

I also agree to return immediately, and to maintain in strictest

confidence and not to use in any way, an proprietary, confidential,

or other nonpublic information or documents relating to the

business or affairs of the Company and its affiliates.

I understand that for a period of seven (7) days following the

signing of this Agreement and Release, I may revoke my

acceptance of the offer by delivering a written statement to the

Compensation & Benefits Committee, Attn: Secretary, P.O. Box

61867, Houston, TX 77208 and the Agreement and Release will

not become effective. In the event I revoke my acceptance of the

offer, the Company shall have no obligation to provide me any

rights or benefits under the Severance Pay Plan.

Date Employee Signature

Employee Name (Please Print)

Employee Social Security Number

P.O. Box 4567, Houston, Texas 77210 (713) 629-3000

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.