The case of Johnson v. Lebanese American University should serve as a lesson to employers that sometimes there is such a thing as a release that is too short. In this case, the University had decided to terminate the plaintiff’s employment. At the time of termination, the University offered the plaintiff severance on the condition that plaintiff execute a release. The release, was only three paragraphs long and read as follows:
"I, the undersigned Robert Johnson do hereby declare that I have received from the Lebanese American University the sum of $4,651.94 as an ex-gratia payment in full settlement of any and all claims and entitlements related to my services of whatsoever nature with the above mentioned University up to June 10, 2008.
"I therefore hereby remise, release and completely discharge the Lebanese American University and all its responsible officers of and from all actions or rights that I may ever have against the University in respect of my above mentioned service.
"In witness whereof I have signed this full, final and irrevocable Release and Discharge this day of 6/30/08."
Some of you reading this may be applauding the fact that the release is short, seems direct and to the point. In our practice, we often have clients complain that something seems too lawyerly and is too long, so short and sweet should be good, right? Unfortunately, as the University discovered, brief is not always better. On May 3, 2011, the New York State appeals court ruled that the release signed by the plaintiff did not bar him from pursuing claims of discrimination brought under the New York Human Rights Law. In part, the court reached this decision because plaintiff testified that he believed the release only covered his claims for back pay due and owing at the time of termination. The court also held that the small amount of severance paid by the employer could lend support for plaintiff’s belief. Thus, based on this decision, the University finds itself in the position of having paid plaintiff approximately $4,500 and still having to pay to defend a lawsuit.
So, what should employers do? Obviously, it is a good idea to have legal counsel draft any releases, but employers should follow these guidelines when reviewing or revising a release:
- Avoid fancy Latin terms (like ex gratia in the University’s release). The release should be written in plain English.
- A reasonable period of time to review the release should be given to the employee.
- Identify the claims being released. Some statutes, like the Age Discrimination in Employment Act ("ADEA"), specifically require that the release state that claims under those statutes are being released.
In addition, to consulting legal counsel, employers can make use of the guidance provided by the Equal Employment Opportunities Commission on what should be contained in an enforceable release.