Sauter v. Fed. Home Loan Bank of NY, 2009 WL 2424689 (D.N.J., August 5, 2009) – The New Jersey District Court recently upheld a release of claims executed by the plaintiff after she learned she would be terminated the day before her pre-approved FMLA leave was scheduled to begin. The plaintiff was offered, and accepted, an agreement under which she would receive four weeks of severance pay and one month of COBRA benefits in exchange for the release. She later brought suit alleging claims under Title VII, the ADA, and the FMLA, arguing the release was unenforceable because it was not voluntary, and because she signed it under duress.
The court analyzed her claim under the Third Circuit’s “totality of the circumstances” test, utilizing the seven factors announced in Cirillo v. Arco Chemical Co., 862 F.2d 448 (3d Cir. 1988): 1) the clarity and specificity of the release; 2) the plaintiff’s education and business experience; 3) the amount of time the plaintiff had to deliberate before signing; 4) whether she knew or should have known her rights before signing; 5) whether she was encouraged to or did seek advice of counsel; 6) whether there was opportunity for negotiation; and 7) whether the plaintiff received consideration over and above what she would otherwise have received. Because six out of seven factors weighed in favor of a valid release, the court upheld the release and dismissed the plaintiff’s claims. The court also found there was no duress because “merely taking advantage of another’s financial difficulty is not duress.”
Note: This article was published in the September 2009 issue of the New Jersey eAuthority.
