Rick Stevenson v. Beaver Creek Coal Company

Plain-English summary

Rick Stevenson alleged that Beaver Creek Coal Company laid him off because of his safety and health activities and challenged the effect of a general release he signed when he received severance pay. Judge John J. Morris found a genuine factual dispute about whether the release was supported by adequate consideration and whether it waived the discrimination claim. He denied Beaver Creek's motion for summary decision, allowed 40 days for discovery, and directed the parties to propose a hearing site.

Decision snapshot

• Cited provisions: 29 C.F.R. § 2700.64, 30 U.S.C. § 815(c)
• Outcome: The motion for summary decision was denied, discovery was allowed, and the discrimination case was set to continue.
• Key point: Whether a release waived the complaint could not be decided without resolving factual questions about the severance consideration and the circumstances of signing.

Full text (FMSHRC public release)

CCASE:
RICK STEVENSON V. BEAVER CREEK COAL
DDATE:
19891219
TTEXT:

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Federal Mine Safety and Health Review Commission (F.M.S.H.R.C.)
Office of Administrative Law Judges

RICK STEVENSON, DISCRIMINATION PROCEEDING
COMPLAINANT
Docket No. WEST 89-130-D
v.
DENV CD 89-02
BEAVER CREEK COAL COMPANY,
RESPONDENT Trail Mt. No. 9 Mine

                            INTERIM ORDER

 This case involves a discrimination complaint filed by

complainant on his own behalf pursuant to the Federal Mine Safety
and Health Act of 1977, 30 U.S.C. 801 et seq., (the "Act").

 Now pending for a ruling is the motion of respondent Beaver

Creek Coal Company, ("BCCC"), for a summary decision pursuant to
Commission Rule 64, 29 C.F.R. 2700.64.

  Before considering the merits of the motion it is

appropriate to consider the relevant procedural history of the
case.

 On March 6, 1989, complainant Stevenson, appearing pro se,

filed his complaint pursuant to section 105(c) of the Act.

 On April 7, 1989, BCCC filed its answer denying any

discrimination. Further, BCCC raised several defenses. In part,
BCCC asserts complainant signed a general release of all claims
arising out of the termination of his employment.

 On April 13, 1989, the case was set for a hearing on the

merits.

 On April 20, 1989, BCCC filed interrogatories, a request for

documents and a request for admissions.

 On May 15, 1989, BCCC moved for a rescheduling of the

hearing.

    On May 16, 1989, the hearing was rescheduled to August 8,

1989.

 On May 22, 1989, after a conference call, complainant was

ordered to answer BCCC's interrogatories and to appear for a
deposition.

 On June 6, 1989, complainant filed his answer to

interrogatories.

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On June 20, 1989, the hearing of August 8, 1989, was rescheduled
to a full hearing on the merits.

 On August 1, 1989, at the request of complainant, the

hearing of August 8, 1989 was cancelled.

 On August 14, 1989, BCCC filed a motion and brief for a

summary decision.

 On September 7, 1989, counsel entered his appearance for

complainant.

 On October 10, 1989, complainant filed his affidavit and

brief in opposition to BCCC's motion.

    On October 23, 1989, BCCC filed a reply memorandum.

                             Allegations

 1. Complainant states that while he was a representative of

miners he made numerous complaints to the Mine Safety and Health
Administration ("MSHA"). These complaints resulted in MSHA
inspections and in the issuance of numerous citations.

 2. On September 26, 1988, complainant was laid off. He

claims this was because of his safety and health activities.

 3. It is uncontroverted that the day following his

termination complainant executed and delivered to BCCC a general
release. The agreement reads, in its pertinent part, as follows:

                               Part III

         Notice: Various State and Federal laws prohibit
         employment discrimination based on on age, sex, race,
         color, national origin, religion, handicap or veteran
         status. These laws are enforced through the Equal
         Employment Opportunity Commission (EEOC), Department of
         Labor and State Human Rights Agencies. If you feel that
         your election of the Atlantic Richfield Special
         Termination Plan was coerced and is discriminatory, you
         are encouraged to speak with your Employee Relations
         representative or follow the steps described in the
         Employee Problem Resolution procedure. You may also
         want to discuss the following release language with
         your lawyer. In any event, you should thoroughly review
         and understand the effect of the release before acting
         on it. Therefore, please take this Release home and
         consider it for at least (5) working days before you
         decide to sign it.

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General Release:

      In consideration for the Atlantic Richfield Special
      Termination Plan offered to me by the Company I release
      and discharge the Company, its successors,
      subsidiaries, employees, officers and directors
      (hereinafter referred to as "the Company") from all
      claims, liabilities, demands and causes of action known
      or unknown, fixed or contingent, which I may have or
      claim to have against the Company as a result of this
      termination and do hereby covenant not to file a
      lawsuit to assert such claims. This includes but is not
      limited to claims arising under federal, state, or
      local laws prohibiting employment discrimination or
      claims growing out of any legal restrictions on the
      Company's right to terminate its employees. This
      release does not have any effect on any claim I may
      have against the Company unrelated to this termination.
      I have carefully read and fully understand all of the
      provisions of this Separation Agreement and General
      Release which sets forth the entire agreement between
      me and the Company and I acknowledge that I have not
      relied upon any representation or statement, written or
      oral, not set forth in this document.

 4. In support of its position that complainant is bound by

the release BCCC further cites portions of complainant's
disposition (taken July 25, 1989). The relevant portions are as
follows:

 A. When delivering the general release to Beaver Creek

Complainant Stevenson also delivered a handwritten statement
which stated that Stevenson was signing the form with the "sole
purpose of receiving any and all moneys (sic) owed me by Beaver
Creek Coal. No other purpose is intended" (Tr. 119, 120, BC-19).

 B. Beaver Creek refused to accept Stevenson's conditional

note (BC-19) along with the BC-18 agreement, (Tr. 120, 121).

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C. Stevenson received a letter dated October 4, 1988 from Beaver
Creek which states in pertinent part: ". . . in order to get your
severance pay you must sign the release given to you on September
27, 1988 without any conditions." The October 4, 1988 letter also
noted that Stevenson had "already received all monies owed" to
him. (Emphasis in original) (Tr. 121, BC-20).

 D. Stevenson delivered to Beaver Creek a handwritten signed

note dated October 10, 1988 which read, "Disregard previous note
concerning severance pay and all related conditions." (Tr. 122,
123, BC-21)

 E. Stevenson knew that the severance pay of nearly $8,000.00

was a company benefit given in exchange for the unconditional
execution of the General Release (Tr. 116-123).

 F. Stevenson knew that upon signing the release and

receiving the severance pay he "could not pursue . . . a Federal
Mine Health and Safety Discrimination case." (Tr. 114, 122).

 G. Stevenson testified that with respect to signing the

release:

      a) He thought about not signing it. (Tr. 114, 115).

      b) He kept it a couple days before signing it. (Tr.
      113, 114).

      c) His wife witnessed his signature. (Tr. 114, 115,
      BC-18).

      d) He was aware that by signing, he released Beaver
      Creek of liability. (Tr. 115).

      e) He talked it over with his wife and also talked it
      over with a friend. (Tr. 115, 117).

      f) Upon signing, he was unconditionally releasing
      Beaver Creek. (Tr. 123).

      g) He had a right not to sign the release and not
      receive the severance pay. (Tr. 124).

      h) He considered consulting a lawyer. (Tr. 125).

      i) He was not forced to sign the release. (Tr. 126).

      j) He "knew perfectly well what [I] was signing. (Tr.
      122).

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H. Stevenson has not refunded the nearly $8,000.00 in severance
money to Beaver Creek. (Tr. 124).

      I. Stevenson is a high school graduate (Tr. 5) with

substantial mining experience and has had six years experience
operating a video store which he owned. (Tr. 5-8).

 Complainant, in opposition to BCCC's motion, asserts he is

not bound by the release. In support of his position he states in
an affidavit as follows:

 1. His mailing address is Box 170, Star Route, East Carbon,

Utah 84520.

 2. He was employed at Trail Mountain Mine No. 9 on July 30,

1985 to September 26, 1988, for a period of over three years.

 3. Respondent purchased the above mine on or about September

24, 1987, and agreed to honor, among other things, the existing
severance pay benefit.

 4. Upon becoming separated from BCCC, Stevenson was eligible

for the severance pay benefit, which he earned as part of his
compensation package during over three years of employment at
said mine. The amount of his entitlement was based upon his
length of service at said mine.

 5. BCCC improperly required Stevenson to sign a document

entitled "Special Termination Plan Documentation, Acknowledgment
and Payment Schedule", which contained a "General Release"
provision (refer to Deposition Exhibit BC-18 attached to
Respondent's Brief), as a condition of obtaining his severance
benefit money owed to him upon his separation for past service,
notwithstanding the incorrect statement of Mr. J. F. Kasper,
Employee Relations Manager of BCCC in his letter of October 4,
1988 to the contrary (refer to Deposition Exhibit BC-20, attached
to Respondent's Brief).

 6. BCCC did not offer him an Enhanced Retirement Program,

which is described on the above acknowledgment form, so that he
wasn't provided any opportunity to elect between a severance pay
benefit and an Enhanced Retirement Program benefit. The above
form indicates that he could decline to sign the release language
and receive an Enhanced Retirement Program benefit instead of the
severance pay benefit. He was not provided with this option to
elect. He was simply told by BCCC that if he refused to sign the
above document with the general release language, he would not
receive any severance pay benefit or any other additional
benefit.

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7. BCCC never advised Stevenson, or any other coal miner to his
knowledge prior to separation, that a general release would be
required to receive the severance pay benefit, and no such
requirement existed, to his knowledge, prior to the BCCC
takeover. Moreover, he received nothing in return for giving to
BCCC a general release, because he was owed the severance pay
benefit anyway, whether he agreed to the release or not.

 8. BCCC would not agree to his request to delete the effect

of the general release language and required that said language
be included for him to obtain his severance pay benefit. BCCC
refused to negotiate or agree to any change.

 9. Stevenson was forced to retract his attempt to delete the

effect of the general release language, because of economic
duress and coercion resulting from his child support obligation
(over $900.00 per month for four children); the loss of his video
business; his inability to qualify for Unemployment Insurance
benefits because of the availability of a severance pay benefit,
his lack of a job and lack of outside income and because of
additional pressing economic obligations. (Refer to page 126 of
his deposition of July 25, 1989.)

 10. At the time that Stevenson submitted the signed document

with the release language, he doubted that the release language
was valid or enforceable. This was because it was obtained by
coercion and duress ("blackmail") and because he was owed the
severance pay money anyway, whether I signed the release or not.

 11. At his deposition of July 25, 1989, Stevenson offered to

pay back the severance pay money upon his reinstatement. (Page
124 of his deposition of July 25, 1989).

                           Discussion

 As a threshold matter Complainant contends BCCC's motion was

untimely.

 Commission Rule 64 simply provides that a motion for summary

decision may not be filed before the scheduling of a hearing on
the merits. In this case the hearing on the merits then scheduled
for August 8, 1989, was cancelled on August 1, 1989. BCCC filed
its motion for summary decision on August 14, 1989 when there was
no scheduled hearing. This factual scenario causes me to conclude
that Commission Rule 64 is not applicable.

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The writer believes the applicable case law governing the effect
of a release as a valid waiver of rights is generally expressed
in an ADEC(FOOTNOTE 1) case, Cirillo v. Arco Chemical Company, a
Division of Atlantic Richfield Company and Ramey, 862 F.2d 448
(3rd. Cir. 1988).

 Specifically, therein the Court adopted a "totality of the

circumstances" approach, necessitating careful evaluation of the
release form itself as well as the complete circumstances in
which it was executed.

 Relevant factors to be considered in the totality of the

circumstances include, but are not limited to, the following
considerations: (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 rights upon execution of the release; (5) whether
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 employee
exceeds the benefits to which the employee was already entitled
by contract or law. 862 F.2d at 451.

 It is apparent on the facts presented herein that a genuine

issue of fact exists under the totality of circumstances rule. In
particular, the issue arises as to whether the consideration was
adequate. Or as otherwise stated: was the consideration given for
the waiver and accepted by Stevenson in excess of the benefits to
which he was already entitled by contract or law.

 Since a genuine issue of fact exists on this point it

follows that BCCC's motion for a summary decision should be
denied.

    Accordingly, the following order is appropriate:

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ORDER

    1. Respondent's motion for a summary decision is denied.

    2. Complainant is granted 40 days to conduct discovery.

 3. Counsel are directed to confer and within 10 days they

are to suggest to the judge, in writing, an appropriate hearing
site for this case.

 4. If the parties cannot agree on an appropriate hearing

site the judge will set the case for a hearing in Price, Utah in
February 1990.

 5. This is not an appealable order since it does not dispose

of the alleged discrimination issues.

                              John J. Morris
                              John J. Morris
                              Administrative Law Judge

ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
FOOTNOTES START HERE
~FOOTNOTE_ONE
1. Age Discrimination in Employment Act of 1967, 29 U.S.C.A.
621, et seq