The 3d U.S. Circuit Court of Appeals has held that 15 minutes was a sufficient amount of time for the plaintiff, a public school teacher, to review a separation agreement and release negotiated in connection with her resignation. Gregory v. Derry Twp. Sch. Dist., 2011 WL 944424 (3d Cir., March 21, 2011)
Rhauni Gregory, a public school teacher, sued her former employer and a number of individuals for race discrimination under 42 U.S.C. §1981. Although prior to her resignation from employment, Gregory signed a separation agreement that included a release, she subsequently claimed that the agreement was invalid and that it did not preclude her from suing the School District. Her argument was based largely on the fact that when she was asked to sign the agreement, Gregory was provided only about 15 minutes to deliberate whether to sign. However, the agreement had been reviewed and negotiated by a representative of the teachers’ union of which Gregory was a member, who assured that the agreement included continued health benefits and a positive letter of recommendation, both of which Gregory had indicated were critical to her. In addition, Gregory claimed that she signed the agreement under duress, because the school principal sat next to her as she reviewed the document. However, she was unable to point to any actual restriction on her ability to think or consider in that circumstance, or to show any specific instance of “duress.” The lower court granted the school District’s motion for summary judgment, finding that Gregory had waived her right to sue when she signed the release agreement.
The Third Circuit affirmed on appeal. Examining the facts under the applicable “totality of the circumstances” test, the Court rejected Gregory’s attempt to avoid the agreement, finding that she had sufficient time to review the agreement, and that she did not sign under coercion or duress. The Court reviewed the seven factors to be considered: 1) the clarity and specificity of the release language; 2) the plaintiff's education and business experience; 3) the amount of time the plaintiff had to deliberate about the release before signing it; 4) whether the plaintiff knew or should have known her rights upon execution of the release; 5) whether the plaintiff was encouraged to seek, or in fact received benefit of counsel; 6) whether there was an opportunity for negotiation of the terms of the agreement; and 7) whether the consideration given in exchange for the waiver and accepted by the plaintiff exceeded the benefits to which she was already entitled by contract or law.
It is important to this decision that Gregory’s representative already had approved the agreement before Gregory reviewed it, and that Gregory had negotiated certain specific benefits in exchange for resigning. Based on those background facts, employers cannot interpret this case as providing permission to rush an employee into signing a release, and in most cases still should provide sufficient time for the employee to review an agreement and confer with an attorney or other representative. In addition, it is important to note that releases of claims under the federal Age Discrimination in Employment Act (ADEA) must comply with the minimum review period and other specific requirements of the Older Workers Benefit Protection Act.