Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.


August 17, 1983

REED, Jerrildine

The opinion of the court was delivered by: GREEN


 This action is brought under 42 U.S.C. ยง 2000e-5(f)(1). Plaintiff, a former employee of defendant corporation, was hired by defendant in 1970 in a non-legal capacity. She received the SmithKline Fellowship Award in 1980, was given leave from employment for one year, and planned to work in defendant's legal department upon law school graduation in 1981. However, plaintiff was arrested in May of 1981, and shortly thereafter the Pennsylvania Bar Examiners notified her that, as a result of her arrest, she would not be allowed to take the July 1981 administration of the Bar Examination. *fn1"

 Plaintiff did not inform defendant of her legal problems. When defendant became aware of plaintiff's arrest and the Bar Examiners' decision, it met with plaintiff. At this July 17, 1981 meeting, defendant suggested that it might be in everyone's best interest if plaintiff found employment elsewhere and offered to pay plaintiff one year's salary if she left. Plaintiff discontinued employment with defendant in August 1981, but demanded that certain conditions be met before she agreed to defendant's termination proposal. Negotiations regarding the terms of plaintiff's departure from defendant ensued. Nearly six weeks later, an agreement was reached. Part of this agreement contained a release clause, *fn2" the validity of which is at issue in the instant case. In the privacy of her own home, plaintiff signed a termination agreement and other documents which defendant sent to her and returned them to defendant. Plaintiff received all the benefits agreed upon, including a final lump sum payment in January 1982 of the balance of the $32,000 settlement.

 In March 1982, plaintiff filed a charge of sex and race discrimination in employment against defendant with the Equal Employment Opportunity Commission ("EEOC"), mentioning neither the agreement reached with defendant nor the $32,000 settlement. The EEOC found no reasonable cause to believe plaintiff's allegations of discrimination.

 In October of 1982, plaintiff filed this action, alleging that defendant discriminated against her because of her race and sex, and averring that she executed the termination agreement under duress. Now before the court is defendant's motion for summary judgment. Defendant contends that no genuine issue of material fact is in dispute. Defendant also maintains that, since plaintiff's allegations of duress are insufficient as a matter of law, the release is valid, entitling defendant to summary judgment. Moreover, defendant asserts that, irrespective of the duress issue, plaintiff's acceptance of the benefits of the termination agreement constitutes a ratification of the release clause and a waiver of plaintiff's right to rescind. Plaintiff opposes the entry of summary judgment. She asserts that genuine issues of material fact remain unresolved and that she has not been given a reasonable opportunity to complete discovery.

 In an order entered February 2, 1983, the court noted that duress was a key issue in the instant case. As I stated then,

although the plaintiff alleges that defendant violated her civil rights, she essentially seeks to repudiate, on the grounds of duress and coercion, a contractual settlement with defendant from which she has already derived economic benefit.

 The parties stipulated that "since the defendant's motion presents this threshold issue [i.e., the validity of the release], discovery in [this case] will be stayed immediately and this stay of discovery will continue until this court rules on Defendant's Motion for Summary Judgment." Stipulation and Order, Reed v. SmithKline Beckman Corp., No. 82-4326 (E.D.Pa. Apr. 25, 1983).

 Although this case is before the court under federal question jurisdiction, the claims of duress and coercion are grounded in state law. Whatever the basis for federal jurisdiction, the Erie doctrine applies to any issue or claim which has its source in state law. Maternally Yours v. Your Maternity Shop, 234 F.2d 538, 540 n. 1 (2d Cir.1956); accord, Three Rivers Motors Co. v. Ford Motor Co., 522 F.2d 885, 888 n.5 (3d Cir.1975). Here, the validity of the termination agreement is at issue. Plaintiff and defendant are citizens of Pennsylvania. The termination agreement was executed in, and governed employment in, Pennsylvania. Thus, the law of Pennsylvania is the source of the state law claims.

 Under Pennsylvania law, a signed release is binding upon the parties unless executed and procured through fraud, duress, accident, or mutual mistake. Id. at 892, citing Kent v. Fair, 392 Pa. 272, 140 A.2d 445 (1958); see also Commonwealth of Pennsylvania v. Flaherty, 547 F. Supp. 172 (W.D.Pa.1982). The natural and ordinary meaning of the language of the release demonstrates the intention of the parties and will prevail unless one of the parties unequivocally proves that the release is invalid. Sears, Roebuck & Co. v. Jardel Co., 421 F.2d 1048, 1051 (3d Cir.1970); Young v. Robertshaw Controls Co., 430 F. Supp. 1265, 1268 (E.D.Pa.1977); Frank v. Volkswagenwerk, A.G. of West Germany, 382 F. Supp. 1394, 1400 (E.D.Pa.1974), modified on appeal, 522 F.2d 321 (3d Cir.1975). The party alleging that the release is invalid has the burden of proving its invalidity. Young, 430 F. Supp. at 1268; Hohlweiler v. Pennsylvania R.R. Co., 294 F. Supp. 1377, 1381 (E.D.Pa.1969), aff'd, 436 F.2d 1382 (3d Cir.1971), cert. denied, 404 U.S. 884, 92 S. Ct. 220, 30 L. Ed. 2d 167 (1971).

 Similarly, "where the contracting party is free to come and go and to consult with counsel, there can be no duress in the absence of threats of actual bodily harm." Carrier v. William Penn Broadcasting Co., 426 Pa. 427, 431, 233 A.2d 519, 521 (1967), quoted in, Three Rivers Motors Co., 522 F.2d at 893. Mere economic or financial pressure does not suffice to invalidate a release. Id.

 Plaintiff, a law school graduate, represented herself in the instant action until February of 1983. She negotiated with defendant for a period of almost six weeks, during which she extracted substantial concessions from defendant prior to signing the release. Further, during that time, plaintiff was represented by legal counsel with respect to the pending criminal charges, and was always free to consult with him or other counsel of her choice. Plaintiff argues that she signed the release under duress, "economic pressure to support herself and son", *fn3" and "desperation produced by corporation's improper firing," *fn4" so as to protect herself from the "massive impending and threatened damage to her present and future ability to work." *fn5" In essence, plaintiff seeks to repudiate the settlement and release because of economic and career-related pressures.

 Plaintiff admits in her deposition that no employee of defendant's ever threatened her with physical harm. *fn6" In the absence of threats of actual bodily harm, as a matter of law, there was no duress. This conclusion is supported by the ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.