Employment-Second Circuit Rules That A Waiver In A Separation Agreement Bars A Suit Alleging An ADEA Violation.

In Ridinger v. Dow Jones & Company Inc., No. 10-1771-cv (2nd Cir. 2011), the plaintiff sued his former employer, defendant Dow Jones & Company Inc. (“Dow Jones”), seeking monetary and equitable relief for alleged age discrimination in violation of the ADEA. The magistrate judge hearing the case granted summary judgment for Dow Jones. The basis of this decision was a separation agreement between the plaintiff and Dow Jones, which was entered into in connection with the plaintiff’s termination of employment, and in which the plaintiff agreed to waive all claims, expressly including claims under the ADEA, that he might have against Dow Jones. The plaintiff appealed.

In this case, when he was a 62-year-old photo editor at Dow Jones’ SmartMoney magazine, the plaintiff’s employment was terminated. The plaintiff was given a severance package that included 20 weeks’ salary and other benefits, in exchange for which he signed a Separation Agreement and General Release (the “Separation Agreement”). The plaintiff received all of the benefits promised to him in the Separation Agreement. The plaintiff then sued Dow Jones, asserting a claim of age discrimination under the ADEA, since- after his termination- the plaintiff’s position was filled by a younger employee. Dow Jones’ sought to dismiss the plaintiff’s complaint, on the grounds that his suit is barred by his voluntary execution of the Separation Agreement, in which he waived all claims. The issue for the Court: is the waiver valid under the ADEA?

The Court said that section 7(f) of the ADEA sets forth rules for a valid waiver. Those rules are strict. The plaintiff challenged the waiver on the grounds that it did not meet the statute’s “clarity requirement” (that the waiver must be written in a manner calculated to be understood by the relevant employees), particularly as to his right to sue Dow Jones under the ADEA. The Court rejected this challenge, stating that the waiver, which used the terms “waiver,” “release,” and “covenant not to sue,” did not use or combine those terms in a confusing manner. For example, one part of the waiver refers to covenants not to sue only in stating that the plaintiff agrees not to sue Dow Jones “unless such a covenant not to sue is invalid under applicable law.” The waiver gave the plaintiff the right to bring an action challenging the validity of the Separation Agreement itself, but nothing in the waiver could have led the plaintiff to believe that he retained the right to bring an action against Dow Jones under the ADEA. As such, the Court concluded that the waiver met the ADEA’s clarity requirement.

The Court rejected several other arguments by the plaintiff as to why the magistrate judge’s summary judgment should be overturned, and why the waiver in the Separation Agreement is not valid. As such, the Court ruled that the plaintiff’s waiver in the Separation Agreement was valid under the ADEA, and affirmed the magistrate judge’s decision.