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RIDDELL v. MEDICAL INTER-INSURANCE EXCH.

October 14, 1998

NANCY RIDDELL, Plaintiff,
v.
MEDICAL INTER-INSURANCE EXCHANGE, Defendant.



The opinion of the court was delivered by: COOPER

MEMORANDUM OPINION

 COOPER, District Judge

 This matter comes before the Court on motion of defendant, Medical Inter-Insurance Exchange, for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the reasons stated, defendant's motion is denied.

 BACKGROUND

 The central issue of this motion concerns the validity of a release signed by a terminated employee. Plaintiff Nancy Riddell ("Riddell") worked as a customer service representative for defendant Medical Inter-Insurance Exchange ("MIIX") from March 25, 1996, to January 16, 1998. (Compl. P 3.) Riddell alleges that she often worked in excess of 40 hours per week for no additional compensation. (Id. P 5.) In October 1997, Riddell began experiencing back problems, caused by two herniated disks. (Id. P 6.) Riddell went on short-term disability leave on December 5, 1997, and returned to work on January 16, 1998. (Id. P 9.) Upon returning, Riddell met with Ron Wade, ("Wade"), Vice President of Underwriting, and Nancy Gowaty, ("Gowaty"), Assistant Vice President of Human Resources. (Aff. of Nancy Riddell in Opp'n to Def.'s Mot. for Summ. J. ("Riddell Aff.") P 6.) Wade informed Riddell that her position had been eliminated and that her services were no longer needed. (Id. P 7.) Riddell claims that her job duties were later assigned to a younger woman. (Id. P 9.)

 Riddell alleges that MIIX: (1) failed to pay her 1.5 times her regular hourly wage for each hour she worked in excess of 40 hours per week in violation of N.J.S.A. § 34:11-56a4, (Compl., Count One); (2) failed to reinstate Riddell upon her return from medical leave in violation of the Family and Medical Leave Act, ("FMLA"), 29 U.S.C. § 2601, et seq., (id., Count Two); (3) committed age discrimination under the New Jersey Law Against Discrimination, N.J.S.A. § 10:5-12 et seq., ("NJLAD"), by terminating Riddell and assigning her job duties to a younger woman, (id., Count III); (4) committed disability discrimination under NJLAD by terminating Riddell, (id., Count IV); and (5) failed to recall Riddell for a position in violation of both FMLA and NJLAD. (Id., Count V.)

 Defendant MIIX has moved for summary judgment, seeking dismissal of Riddell's Complaint in its entirety. MIIX asserts that all of Riddell's claims are barred by her signing a release ("Release") of all claims against MIIX at the January 16, 1998 meeting. (Def.'s Br. in Supp. of Mot. for Summ. J. ("Def.'s Br. in Supp.") at 5.) Gowaty provided Riddell with a two-page memorandum explaining the severance package and containing the Release. (Riddell Aff. P 6.) The first six items referred to the particulars of Riddell's severance package. (Id., Ex. A) The Release was listed as item seven and read:

 
Please countersign a copy of this memorandum thereby confirming your acceptance of the severance package. You signature will also signify a release of any and all claims which you may have against MIIX and their respective present and former directors, officers, employees and agents regarding your employment, the elimination of your position and severance. The benefits contained in the severance package will be implemented as soon as we receive your countersigned copy of this memorandum.

 (Id.)

 Riddell acknowledges that she read the Release, but alleges that she did not understand that signing the Release could result in a waiver of claims that she might have under laws concerning overtime wages or age and disability discrimination. (Riddell Aff PP 2, 6.) Riddell also claims that she believed that if she did not sign the Release, she would be unable to collect unemployment benefits. (Id. P 6.) Riddell alleges that she was given only a few minutes to review the document and never had an opportunity to negotiate its terms. (Id. P 7.)

 In contrast, defendant MIIX asserts that Riddell understood her rights under the Release. MIIX also claims that Riddell and Gowaty negotiated the issue of vacation pay, leading to the inclusion of vacation pay in the severance package. (Gowaty Aff. P 4.) MIIX submits a copy of the Release which includes handwritten notes allegedly by Gowaty calculating the number of vacation days due Riddell and adding to the Release: "Pay any vacation due employee in final paycheck." (Id., Ex. A.) Riddell does not recall discussing the issue of vacation pay and submits a copy of the Release that does not contain handwritten notes. (Riddell Aff. P 7.)

 MIIX also argues that Riddell ratified the Release by accepting the benefits of the severance package. (Def.'s Br. in Supp. at 9-10, Def.'s Ltr. Br. in Reply ("Def.'s Reply Br.") at 4-5.) According to MIIX, Riddell cannot challenge the Release while retaining the benefits. (Def.'s Reply Br. at 5.) Riddell responds by stating that she should not have to "tender back" her severance benefits because doing so would undermine the remedial nature of the various statutes under which she brings her claims. (Pl.'s Br. in Opp'n at 15.) In addition, Riddell states that it would be impractical to require her to return her benefits, because it is impossible to determine what portion of the benefits, if any, was in consideration for the Release and what portion constituted normal severance benefits. (Id. at 15-16.)

 DISCUSSION

 I. Standard for Summary Judgment

 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 a judgment as a matter of law." Fed. R. Civ. P. 56(c). The party moving for summary judgment bears the initial burden of showing that there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). Once the moving party has met its initial burden, the nonmoving party must present evidence that creates a genuine issue of material fact making it necessary to resolve the difference at trial. Id. at 324. "By its very terms, the standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). Material facts are only those facts that might affect the outcome of the action under governing law. Id. at 248; Boyd v. Ford Motor Co., 948 F.2d 283, 285 (6th Cir. 1991).

 The role of the judge at the summary judgment stage is not to weigh the evidence, but to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249. "There is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable or is not significantly probative, summary judgment may be granted." Id. at 249-50 (citation omitted).

 II. Release of a Claim under the Family Medical Leave Act

 Employees may waive claims arising under Title VII, 42 U.S.C. § 2000e et seq., and under the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., ("ADEA"). See Alexander v. Gardner-Denver Co., 415 U.S. 36, 39 L. Ed. 2d 147, 94 S. Ct. 1011 (1974) (Title VII); Coventry v. United States Steel Corp., 856 F.2d 514 (3d Cir. 1988) (ADEA). But see Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 89 L. Ed. 1296, 65 S. Ct. 895 (1945) (holding that an employee cannot waive claims pursuant to the Fair Labor Standards Act, ("FLSA"), 29 U.S.C. §§ 206-209). The parties have not cited any published opinion addressing whether an employee may validly waive claims under the FMLA by signing a release, nor are we aware of any. However, neither party disputes that claims under FMLA can be waived, and we have no reason to hold otherwise. See generally Coventry, 856 F.2d at 521 n.8 (discussing the rationale for allowing waiver of ADEA claims but not FLSA claims). Accordingly, we will apply those legal principles concerning releases which have developed in the context of Title VII and ADEA cases.

 An employee cannot waive an ADEA or Title VII claim unless the waiver is made "knowingly and willfully." See Coventry, 856 F.2d at 522. In the context of a waiver of an ADEA claim, the Court of Appeals for the Third Circuit created a seven factor test for deciding if a release is knowing or voluntary under the "totality of the circumstances." See Cirillo v. Arco Chemical Co., 862 F.2d 448, 451 (3d Cir. 1988). Congress then changed the relevant criteria under the ADEA by passing the Older Workers Benefit Protection Act, ("OWBPA") in 1990. See 29 U.S.C. § 626(b). Employer releases must now meet specific requirements in order to constitute a valid waiver of ADEA claims. Id.

 Both parties assume that we will apply the "totality of the circumstances" test in the instant case. While this approach has been superceded by the OWBPA with respect to releases of ADEA claims, we nonetheless conclude that the "totality of circumstances" test should be used to determine whether releases are valid under the FMLA. The test has been used by this Court to determine the validity of a release of a Title VII claim. See Martinez v. NBC, 877 F. Supp. 219, 227 (D.N.J. 1994); see also Bennett v. Independence Blue Cross, 1993 U.S. Dist. LEXIS 344, No. 92-4249, 1993 WL 15603 (E.D. Pa. Jan. 13, 1993) (unpublished opinion) (applying test to Title VII, ERISA, and ADEA claims); Morris v. Penn Mutual Life Ins. Co., 1989 U.S. Dist. LEXIS 1690, No. 87-7063, 1989 WL 14063 (E.D. Pa. Feb. 21, 1989) (unpublished opinion) (applying test to Title VII claim). New Jersey state courts have also adopted the Third Circuit test. See Swarts v. Sherwin-Williams Co., 244 N.J. Super. 170, 177, 581 A.2d 1328, 1332 (App. Div. 1990) (adopting the test for evaluating releases under the NJLAD).

 Under the totality of the circumstances test, a court should address, but is not limited to, the following factors when ...


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