New Jersey Decision Offers Cautionary Tale to Employers Regarding How Courts May Interpret Whether Employee’s Release Is Knowing And Voluntary

Author:Mr Keith Rosenblatt and Alison B. Andolena
Profession:Littler Mendelson

On August 26, 2013, the New Jersey Appellate Division reversed a grant of summary judgment to an employer upon concluding, based on little more than the plaintiff's self-serving statements, that its former employee's detailed release of claims was not "knowing and voluntary." Although this decision may later prove to be an outlier, it serves as a warning to employers of the highly critical manner in which some courts may scrutinize release agreements.

The plaintiff in Carey v. NMC Global Corp. (N.J. App. Div. Aug. 26, 2013) worked for the defendant company for less than three years as a dispatcher before the company terminated his employment upon his return to work following a two-month medical leave of absence. He was a high school graduate who had previously been employed in various positions, including supervisory positions, during his fifteen years of experience in the petroleum industry.

Upon his return, the company's office manager and vice president presented the plaintiff with a Separation and Release Agreement (Release), which offered him two weeks' severance pay and contained the following release language:

3. Employee's Release. In exchange for this foregoing consideration, [the employee] on behalf of Employee, Employee's heirs, representatives, agents and assigns hereby RELEASES, INDEMNIFIES, HOLDS HARMLESS, and FOREVER DISCHARGES (i) [the company] . . . from any and all actions, charges, claims, demands, damages, or liabilities of any kind or character whatsoever, known or unknown, which Employee know has or may have had through the effective date of this Agreement.

4. Employee's Release Continued. Without limiting the generality of the foregoing release, it shall include: (i) all claims or potential claims arising under any federal, state or local laws relating to the Parties' employment relationship, including, but not limited to, any claims Employee may have under the Civil Rights Act of 1866, 1964, and 1991, as amended, 42 U.S.C. §§ 1981 and 2000e; the Americans with Disabilities Act of 1990, as amended, 42 U.S.C. §§ 12,101 et seq.; the Fair Labor Standards Act 29 U.S.C. §§ 201 et seq.; the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101, et seq.; the Sarbanes-Oxley Act of 2002, including the Corporate and Criminal Fraud Accountability Act, 18 U.S.C. §§ 1514A; the Employee Retirement Income Security Act, 29 U.S.C. §§ 1101 et seq.; the Family and Medical Leave Act of 1993 as amended, 29 U.S.C. §§ 2601 et seq.; the New Jersey Conscientious Employee Protection Act, N.J.S.A. §§ 34:19-1 et seq; the New Jersey Law Against Discrimination, N.J.S.A. §§ 10:5-1 et seq.; (ii) any claims on account of, arising out...

To continue reading