Stretching the reach of a 1998 ruling by the U.S. Supreme Court that found that an employee was not required to “tender back” a monetary settlement he received in return for granting a release of claims under the Age Discrimination in Employment Act (ADEA), the U.S. Court of Appeals for the Sixth Circuit ruled recently that neither is tender back required under Title VII of the Civil Rights Act (Title VII) and the Equal Pay Act (EPA) where a plaintiff challenges the validity of the release in question.
Under common law principles, once an employee signs a severance agreement that includes a release of claims in return for a certain benefit, the employee generally is prohibited from suing the employer before tendering back any benefit received as a condition of challenging the agreement itself. In Oubre v. Entergy Operations, Inc., the Supreme Court did away with this requirement in the context of age discrimination claims brought under the ADEA as amended by the Older Workers Benefit Protection Act (OWBPA). The Court, however, has never applied that holding in the context of other federal employment laws.
Creating a circuit court split, the divided three-judge panel ruling by the Sixth Circuit in McClellan v. Midwest Machining, Inc., No. 17-1992 (6th Cir. August 16, 2018), ostensibly extends the Oubre rationale to any case brought under Title VII and the EPA. The panel majority reasoned that because Title VII and the EPA are remedial statutes, requiring employees to tender back their benefits before filing suit would frustrate these statutes’ goals of ferreting out workplace discrimination.
The Sixth Circuit’s decision is available here.
Members of the Center for Workplace Compliance (CWC) can read more here.