Warren v. Mastery Charter Sch.

312 F.Supp.3d 456

Candace L. WARREN, Plaintiff,

v.MASTERY CHARTER SCHOOLS, Defendant.

CIVIL ACTION NO. 17–4782

United States District Court, E.D. Pennsylvania.

Signed May 9, 2018

Karin M. Gunter, Law Offices of Karin M. Gunter, Wyncote, PA, for Plaintiff.

Neil J. Hamburg, Michael E. Sacks, Hamburg & Golden PC, Philadelphia, PA, for Defendant.

MEMORANDUM

EDUARDO C. ROBRENO, District Judge

This is an employment case for race and age discrimination. The Defendant has filed a motion to dismiss, or in the alternative, for summary judgment, based on a release of all employment claims that the Plaintiff signed in exchange for severance benefits. Ultimately, with the benefit of briefing and oral argument, the Court will construe the motion as a motion for summary judgment, and grant it.

I. FACTUAL BACKGROUND¹

Plaintiff Candace Warren ("Warren") is an African–American woman over forty years of age with a master's degree. See Am. Compl. ¶¶ 7, 9, ECF No. 4. Warren was employed by Defendant, Mastery Charter Schools ("Mastery") from 2011 to 2016 as a social worker. Id. ¶¶ 10–13. Each year, Warren would get a one-year employment contract, which would then be renewed for the next year. See id. ¶ 30. During most of her tenure at Mastery, Warren received positive feedback about her job performance. Id. ¶¶ 24–25. She also received raises and bonuses based on her employee evaluation ratings. Id. ¶ 25. However, Mastery's Regional Director, Debbie Durso, decided not to renew Warren's contract at the end of the 2016 school year, based on allegations of poor performance and communications issues. Id. ¶ 30. Accordingly, in late April 2016, Mastery informed Warren that it did not intend to renew her contract. See id. ¶ 30.

Then, on June 23, 2016, the day before Warren's last day of employment with Mastery, Mastery sent Warren a proposed severance agreement containing a release of employment claims (hereinafter, "Agreement and Release") for her review.² Decl. of Theresa Velykis, ¶ 6, Def's Mot. Ex. 2, ECF No. 7–2. The Agreement and Release explained that, regardless of whether Warren signed it, she would receive every benefit that she was already entitled to, including accrued salary and pay for vacation time. Def's Mot. Ex. 1, ECF No. 7–1. It further provided that, if she did agree and sign the Agreement and Release, she would get severance benefits that she was not otherwise entitled to—including four additional weeks' worth of pay. Id. ¶¶ 2.1–2.3. In exchange for these severance benefits, Warren would waive any and all employment-related claims against Mastery. Id. ¶¶ 5.1–5.4.

Warren had twenty-one days to consider this offer. See id. ¶ 7. Also, if she agreed and signed the Agreement and Release, she could revoke her agreement within seven days. Id. The Agreement and Release contained, in three places, the suggestion that Warren consult with an attorney before she agreed and signed. See id. For example, it contained the following paragraph, in capitalized and bolded text:

PLEASE READ THIS AGREEMENT VERY CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, INCLUDING THOSE ALLEGING EMPLOYMENT DISCRIMINATION, AND BARS FUTURE LEGAL ACTION AGAINST EMPLOYER BY EMPLOYEE FOR CLAIMS ARISING PRIOR TO THE EXECUTION OF THIS AGREEMENT. YOU SHOULD CONSULT WITH AN ATTORNEY BEFORE SIGNING THE AGREEMENT.

Id. at 7 (emphasis in original). Additionally, the Agreement and Release included language stating that, by signing, Warren was acknowledging that she was doing so in a knowing and voluntary manner. Id. ¶ 8.

As Warren's relationship with Mastery deteriorated, she experienced significant stress. Warren Aff. ¶ 15, ECF No. 8–3. This stress caused Warren to suffer from rashes, hair loss, depression, and anxiety. Pl's Br. at 6, 8, ECF No. 8. When Mastery offered her the choice of signing the Agreement and Release in exchange for severance benefits, Warren worried that if she did not sign, Mastery would use its influence to impair her employment opportunities with future potential employers. Warren Aff. ¶¶ 18–20. With this worry in mind, Warren thought about whether she wished to sign the Agreement and Release for the full twenty-one day consideration period, finally signing it on the twenty-first day. Pl's Br. at 9. Warren explains that, because she was under stress and was worried that Mastery would interfere with her future employment prospects, she felt that she had "no choice" but to sign the Agreement and Release. Id. ³

II. PROCEDURAL HISTORY

Warren filed this action against Mastery on October 25, 2017, ECF No. 1, and then filed an Amended Complaint on February 1, 2018, ECF No. 4. The Amended Complaint contains claims for employment discrimination based on age and race, in violation of Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. § 2000e et seq. ; the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq. ; and the Pennsylvania Human Relations Act ("PHRA"), 43 Pa. Stat. Ann. § 951 et seq. See id. ¶¶ 32–62.

Mastery has filed a motion to dismiss Warren's claims, or, in the alternative, for summary judgment, based on the Agreement and Release. ECF No. 7. Warren has filed a response in opposition thereto. ECF No. 8.⁴ Accordingly, Mastery's motion is ripe for disposition.

As Warren correctly points out, Mastery's motion should be construed as a motion for summary judgment, because it is based on the Agreement and Release—a matter outside the pleadings. Warren does, however, agree that the Court may properly rule on Mastery's motion as a motion for summary judgment.

III. LEGAL STANDARD

Summary judgment is appropriate if there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). "A motion for summary judgment will not be defeated by ‘the mere existence’ of some disputed facts, but will be denied when there is a genuine issue of material fact." Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 581 (3d Cir. 2009) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). A fact is "material" if proof of its existence or nonexistence might affect the outcome of the litigation, and a dispute is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248, 106 S.Ct. 2505.

The Court will view the facts in the light most favorable to the nonmoving party. "After making all reasonable inferences in the nonmoving party's favor, there is a genuine issue of material fact if a reasonable jury could find for the nonmoving party." Pignataro v. Port Auth. of N.Y. and N.J., 593 F.3d 265, 268 (3d Cir. 2010). While the moving party bears the initial burden of showing the absence of a genuine issue of material fact, meeting this obligation shifts the burden to the nonmoving party who must "set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 250, 106 S.Ct. 2505.

Where, as in this case, a purported motion to dismiss invites consideration of matters outside of the pleadings, the Court may convert the motion into a motion for summary judgment. See Kulwicki v. Dawson, 969 F.2d 1454, 1463 n. 11 (3d Cir. 1992) ("[T]he decision to convert a motion to dismiss to a motion for summary judgment is generally committed to the district court's discretion under Fed. R. Civ. P. 56."). Summary judgment is appropriate at this stage because the parties had adequate notice that the motion was converted, as well as an adequate opportunity to present sufficient evidentiary materials for the Court to dispose of the motion as a matter of law. See Rose v. Bartle, 871 F.2d 331, 341–42 (3d Cir. 1989).

IV. DISCUSSION

Mastery's position is that the Agreement and Release signed by Warren in exchange for a severance package bars her claims as a matter of law. Warren concedes that she signed the Agreement and Release, but contends that the release therein is invalid.

A. Release of Employment Claims

An employee may release employment discrimination claims against an employer so long as the release is made "knowingly and willfully." Coventry v. U.S. Steel Corp., 856 F.2d 514, 522 (3d Cir. 1988) (quotation omitted); see also Alexander v. Gardner–Denver Co., 415 U.S. 36, 52 n. 15, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974). Whether such a release is knowing and willful is determined by a totality of the circumstances test. Coventry, 856 F.2d at 522–23.

Under this test, the following factors are considered: (1) the clarity and specificity of the release language; (2) the plaintiff's education and business experience; (3) the amount of time plaintiff had for deliberation about the release before signing it; (4) whether plaintiff knew or should have known his or her rights upon execution of the release; (5) whether plaintiff was encouraged to seek, or in fact received the benefit of counsel; (6) whether there was an opportunity for negotiation of the terms; and (7) whether the consideration given in exchange for the release and accepted by the employee exceeds the benefits to which the employee was already entitled by contract or law. Id.

Additionally, where a release purports to waive claims under the ADEA, the provisions of the Older Worker Benefit Protection Act ("OWBPA") also apply. Pursuant to the OWBPA, an individual cannot waive any ADEA right or claim unless the waiver is "knowing and voluntary." 29 U.S.C. § 626(f)(1). To be knowing and voluntary under the OWBPA, a release must satisfy the statutory requirements set forth in the statute. Id. at § 626(f)(1)(A)–(H).⁵ In this case, only one of those requirements is in dispute: the requirement that a release be "written in a manner calculated to be understood by such individual, or by the average individual eligible to participate."⁶ Id.

Here, Warren asserts that Mastery has failed to establish that the release provision in the Agreement and Release is written in a manner...