Wis.LIRC ER Decision: Xu, David - January 31, 2017 - Pre-filing waiver and release of claims - tendering back the consideration the complainant received for signing a waiver and release is a prerequisite to challenging the validity of the waiver and release - where complainant agreed to do so, and in fact sent a check to the respondent's attorney, it was error to dismiss his complaint because the check was returned for insufficient funds

State of Wisconsin

Labor and Industry Review Commission


David Xu	Fair Employment Decision
Complainant	Fair Employment Decision

Epic Systems Corp.
Respondent
	Dated and Mailed:
ERD Case No. CR201301600	January 31, 2017
EEOC Case No. 443-2012-01537C	January 31, 2017

The decision of the administrative law judge is set aside, and the matter is remanded to the administrative law judge for further proceedings in accordance with this decision.

By the Commission:
	/s/
	Laurie R. McCallum, Chairperson

	/s/
	David B. Falstad, Commissioner

Memorandum Opinion

On June 15, 2015, the Equal Rights Division (hereinafter Division), issued a Notice of Dismissal of the complainant's complaint, on the ground that the complainant had signed a valid waiver and release of claims arising out of his employment with the respondent that precluded the Division from finding that the respondent violated the Wisconsin Fair Employment Act. The complainant filed an appeal of the dismissal, and the matter was assigned to an administrative law judge.

In a letter dated July 13, 2016, the administrative law judge notified the complainant that, if he wished to challenge the validity of the waiver and release he had signed, he needed to return to the respondent the severance pay he had received in consideration for signing such waiver and release. The administrative law judge explained that the respondent would put the severance pay into its attorney's trust account, and that if it was found that the complainant signed a knowing and voluntary waiver, the severance pay would be returned to him and the matter would be dismissed. However, if the waiver was not found to be knowing and voluntary, the matter would be remanded for an investigation and initial determination, and the monies would not be returned to the complainant. In subsequent correspondence, the administrative law judge specifically informed the complainant that he must tender the amount of $3,634.62 (representing three months of severance pay) by October 15, 2016, if he wished to challenge the validity of the waiver and release he had signed and potentially go forward with his discrimination case.

On October 15, 2016, the complainant mailed a check to the respondent's attorney in the amount of $3,634.62. The check was received on October 19, 2016.[1] On November 22, more than a month after receiving the complainant's check, the respondent's attorney attempted to deposit the check into its trust account. The check was returned on November 28 for insufficient funds. Four days later, on December 2, the respondent asked the administrative law judge to dismiss the complaint based upon the complainant's failure to return the severance pay to it per the administrative law judge's instructions. On December 9, the administrative law judge granted that motion and dismissed the complaint, noting that the complainant's failure to return the severance pay left him no choice but to do so. The complainant has filed a petition for commission review of the administrative law judge's decision.

In his petition for commission review the complainant argues that he tried to tender the funds back to the respondent, but that the respondent's attorney waited an unreasonable amount of time to deposit the money into its account. The complainant explains that there were sufficient funds in his account to cover the check at the time he sent it to the respondent, on October 15, 2016, but some time after November 15 he made another withdrawal from the account which caused it to go under the $3,634.62 balance.

The commission agrees with the complainant that his case should not have been dismissed on the basis of the returned check. While, as the administrative law judge correctly noted, tendering back the consideration the complainant received for signing the waiver and release is a prerequisite to challenging the validity of the waiver and release,[2] the cases the administrative law judge cited in support of dismissal, Dotz v. Johnsonville Sausages, ERD Case No. CR201201749 (LIRC Nov. 30 2015) and Rank v. City of Antigo, ERD Case No. CR201501168 (LIRC Jan. 7, 2016), do not compel that result. In Dotz, the complainant was willing to return the monies she received in consideration for signing a release only if she prevailed in her underlying claim against the respondent; in Rank, the complainant did not offer to return the consideration at all. In the instant case, by contrast, the complainant was willing to return the severance pay when asked, and did so. The respondent's attorney received a check from the complainant but did not act expeditiously to deposit the check into its trust account, waiting more than a month, at which point the check was returned for lack of sufficient funds in the account. The respondent then acted immediately to move for a dismissal of the complaint, which the administrative law judge promptly granted, without providing the complainant any opportunity to remedy the situation.

As set forth above, it is clear that the complainant did intend to return his severance pay to the respondent, and the commission can see no reason to dismiss his complaint on that basis. The commission has, therefore, set aside the administrative law judge's decision and remanded the matter to the administrative law judge so that the complainant can be given another opportunity to return his severance pay to the respondent, thereby allowing the administrative law judge to determine whether the complainant signed a voluntary and knowing release and waiver of his claims against the respondent. To avoid recurrence of the same situation, the administrative law judge may specify that the respondent's attorney should deposit the check into its trust account within a specific, reasonable period of time, during which the complainant must ensure that there are adequate funds in his account to cover the check.

cc:	Attorney Pamela Ploor

[1] The respondent's attorney moved for a dismissal of the complaint on the basis that the consideration was not returned to it by the October 15, 2016 deadline set by the administrative law judge. However, the administrative law judge denied that request, stating that the complainant had complied with the requirement that he tender the monies by October 15 by putting a check in the mail on that date.

[2] Under contract law, if a party signs an agreement releasing another from certain claims, then wants to set that release aside and make a claim against the other which had been released by the agreement, the party must tender back the consideration he or she received in the release agreement as a condition to attempting to set aside the release. Charron v. Northwestern Fuel Co., 149 Wis. 240, 134 N.W. 1048 (1912); Doyle v. Teasdale, 263 Wis. 328, 57 N.W.2d 381 (1953). The commission has consistently followed this general rule. See, Rank v. City of Antigo, ERD Case No. CR201501168 (LIRC Jan. 7, 2016); Dotz v. Johnsonville Sausages, ERD Case No. CR201201749 (LIRC Nov. 30 2015); Musial v. AECOM Government Services, Inc., ERD Case No. CR201203059 (LIRC July 21, 2014); Semandel v. Briggs & Stratton Corp., ERD Case No. CR200403135 (LIRC Feb. 24, 2005); Wesley v. TMP Worldwide, Inc., ERD Case No. 200201566 (LIRC Feb. 7, 2003); Meltz v. City of Appleton, ERD Case No. CR200001526 (LIRC Dec. 27, 2001); Lunch v. Zalk Joseph's Fabricators, Inc., ERD Case No. 9401181 (LIRC July 17, 1996); Grahl v. Mercury Marine, ERD Case No. 8902050 (LIRC Dec. 4, 1992); Giese & Field v. Wausau Insurance Companies, ERD Case No. 8600691 (LIRC Oct. 25, 1988).