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Wastak v. Lehigh Valley Health Network

September 02, 2003


Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil No. 00-cv-04797) District Court Judge: Honorable Herbert J. Hutton

Before: Rendell, Ambro and MAGILL*fn1, Circuit Judges

The opinion of the court was delivered by: Rendell, Circuit Judge.


Argued March 10, 2003

Sur Panel Rehearing

Submitted: August 27, 2003


This matter is before us on a Petition for Rehearing filed by John Wastak from the decision of this panel filed June 10, 2003. In our original opinion, reported at 333 F.3d 120 (3d Cir. 2003), we considered Wastak's appeal from an order entered in the District Court on March 27, 2002, granting summary judgment in favor of his former employer, defendant Lehigh Valley Health Network, with regard to Wastak's allegations of age discrimination. The District Court held that Wastak's suit was precluded by a valid release agreement, pursuant to which Wastak, in exchange for various benefits, waived his right to assert any claims arising out of his employment or termination. We affirmed the rulings of the District Court.

Wastak filed a Petition for Rehearing, which was joined by amicus the Equal Opportunity Employment Commission ("EEOC"). In its brief, the EEOC raised an issue regarding our construction of 29 C.F.R. § 1625.23(b), an EEOC regulation, contending that it was in conflict with agency statements published in the Federal Register at the time of the regulation's promulgation, which indicated a contrary interpretation, and urging that its view was entitled to considerable deference under settled principles of administrative law. Agreeing that our original analysis was in some tension with the EEOC's interpretation of its own regulation, we granted panel rehearing and vacated our prior opinion and judgment. The EEOC's argument, however, does not alter the remainder of our analysis or our holding, as the regulation was promulgated long after the events in question here took place and is without retroactive effect. Apart from modifying our statement regarding Wastak's arguments based on § 1625.23(b), the remainder of this amended opinion reproduces the original opinion in its entirety, and we will affirm.


In January of 1990, Lehigh Valley Health Network hired John Wastak as the Administrator for its Department of Psychiatry. Wastak held the position for eight years, during which time Wastak believed that Lehigh Valley was satisfied with his performance, and that his employment was secure.

Sometime in 1997, Wastak began negotiations to lease office space for the Department. That December, however, the Psychiatry Department Chair, Dr. Michael Kauffman, directed Wastak to cease the discussions. Subsequently, the Department engaged in the lease negotiations with a different employee as its representative.

On March 12, 1998, Lehigh Valley fired Wastak, who was fifty-seven years old at the time. Dr. Kauffman indicated that the termination was a result of Wastak's conducting inappropriate lease negotiations. Wastak was given a proposed Separation Agreement and Release ("Release"), along with a letter explaining and supplementing its provisions. The Release states, in pertinent part:

Wastak... herein agrees that [he will not] file a charge, complaint, lawsuit or other claim against [Lehigh Valley]... for any acts, omissions or statements arising out of any aspect of Wastak's employment or termination of Wastak's employment with [Lehigh Valley]. By way of example only and without limiting the immediately preceding sentence, Wastak promises not to file a claim or lawsuit under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (29 U.S.C. § 621), Section 1981 of the Civil Rights Act of 1866, the Equal Pay Act of 1963, the Rehabilitation Act of 1973 and Civil Rights Act of 1991, Pennsylvania Human Relations Act, Employee Retirement Income Security Act, 29 U.S.C. §§ 1001 et seq., and any other state or federal equal employment opportunity law or statute. In addition, Wastak agrees not to file any cause of action or claim relating to the breach of an oral or written contract, misrepresentation, defamation, interference with contract and intentional or negligent infliction of emotional distress, and any other common law claims and all claims for counsel fees and costs.

The Release also relevantly provided that (1) if litigation was brought in violation of the covenant not to sue, the prevailing party would be entitled to reasonable costs and attorneys' fees; (2) performance of each party was contingent on the other party's compliance with the terms of the agreement; (3) the Release contained all the promises and understandings of the parties; (4) Wastak was advised by Lehigh Valley to seek an attorney; (5) Wastak had twenty-one days within which to sign the Release, and (6) Wastak could revoke acceptance of the Release within seven days of signing.

In exchange for his execution of the Release, Lehigh Valley offered Wastak income protection for a period of thirty-six weeks, paid biweekly. Under the provisions of the agreement, Wastak was guaranteed remuneration equivalent to his Lehigh Valley salary, whether or not he secured other employment during the benefits period. Thus, if Wastak accepted lower-paid employment prior to the end of the period, Lehigh Valley would cover the difference in salary, but Wastak's benefits would terminate if he was able to secure employment at a salary equal to or exceeding his salary at Lehigh Valley. Lehigh Valley also promised Wastak the free use of a professional outplacement firm.

As noted above, the Release provided that Wastak could sign the agreement anytime within twenty-one days, and Lehigh Valley advised Wastak to consult an attorney before signing. Unfortunately, however, Wastak's attempts to secure counsel were unsuccessful as, for various reasons, none of the three lawyers Wastak ...

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