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If You Were Bullied Into Your Severance Agreement, You May Still Be Able To Sue

<b>If You Were Bullied Into Your Severance Agreement, You May Still Be Able To Sue</b>

 

After seven years of service to her job, Plaintiff Jena McClellan announced to her employer that she was pregnant.  About three months later, she was bullied into signing a severance agreement.

On the day of her termination, the company’s president called her into his office, closed the door behind her, and presented her with an agreement. He said that she “needed to sign then if [she] wanted any severance.”  The two reviewed the agreement together, but the President zipped through the document at a “rapid pace” and did nothing to ensure Jena fully understood the legal implications of her signature.  Jena even tried to challenge a provision, indicating she felt she had one week of vacation left.  The president forcefully told her that she did not and moved on without further discussion.  Feeling pressured, Jena signed the agreement.  She did not have a lawyer present, nor did she have the opportunity to fully weigh her options in deciding whether or not to sign.

A typical provision of a severance agreement includes a waiver of “any and all past, current, and future claims” against the employer.  Without the benefit of a lawyer explaining this, Jena assumed “claims” referred to unpaid wages or benefits—she certainly did not understand that “claims” referred to discrimination claims in a court of law.  “Blindsided” by the unexpected meeting and feeling “bullied,” Jena signed the agreement and received $4,000 – a cheap price tag for blatant pregnancy discrimination.

Jena received her severance payments, but then met with an attorney, who filed suit against her employer.  But wait, what about the severance agreement she signed?  What about the money she had received?  The Sixth Circuit recently held not only that Jena did not have to “tender back” the severance money (meaning she got to keep it), but also that she could still file suit, even though she signed the severance agreement.

What? How can this happen? I thought when people signed a severance agreement, that was it?  Typically, yes.  In this case, the court found that Jena signed the agreement under duress (meaning she was unduly coerced) and that she did not “knowingly and voluntarily” execute the severance agreement.  Despite her signature, the Sixth Circuit allowed her to proceed with Title VII pregnancy discrimination and Equal Pay Act claims.

Employers can sometimes have far too much bargaining power.  Severance agreements can be lengthy, complicated, and full of legal jargon.  If you’ve been presented with a severance agreement, or if you have recently signed one and want a second opinion, do not hesitate to give O’Hara, Taylor, Sloan & Cassidy a call.  We can be reached at (859) 331-2000, or feel free to submit a summary of your situation at http://www.oharataylor.com/contact-us/.  Our dedicated labor and employment attorneys will be happy to break down the legal jargon and guide you in making the best decision for your situation.

McClellan v. Midwest Machining, Inc.

Authors:   Michael O'Hara, Jessica Wimsatt