Bala v. Commonwealth of Virginia Department of Conservation & Recreation

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-1362
SUNDERSINGH BALA,
Plaintiff − Appellant,
v.
COMMONWEALTH OF VIRGINIA DEPARTMENT OF CONSERVATION AND
RECREATION,
Defendant − Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond. Henry E. Hudson, District
Judge. (3:12-cv-00748-HEH)
Argued: May 13, 2015 Decided: June 25, 2015
Before TRAXLER, Chief Judge, and WILKINSON and FLOYD, Circuit
Judges.
Affirmed by unpublished opinion. Judge Wilkinson wrote the
opinion, in which Chief Judge Traxler joined. Judge Floyd wrote
a dissenting opinion.
ARGUED: Scott Gregory Crowley, Sr., CROWLEY & CROWLEY, Glen
Allen, Virginia, for Appellant. Gregory Clayton Fleming, OFFICE
OF THE ATTORNEY GENERAL OF VIRGINIA, Richmond, Virginia, for
Appellee. ON BRIEF: Mark R. Herring, Attorney General of
Virginia, Rhodes B. Ritenour, Deputy Attorney General, Ronald N.
Regnery, Senior Assistant Attorney General, OFFICE OF THE
ATTORNEY GENERAL OF VIRGINIA, Richmond, Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
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WILKINSON, Circuit Judge:
Sundersingh Bala brought a Title VII claim for retaliatory
discharge against the Commonwealth of Virginia Department of
Conservation and Recreation (“DCR”). The district court granted
summary judgment to the DCR because Bala released this claim in
a July 7, 2011, Settlement Agreement. We affirm the trial
court’s holding that the Settlement Agreement included the
retaliatory discharge claim. Having obtained the benefit of his
bargain, Bala cannot now seek a remedy from the courts after
knowingly and voluntarily relinquishing the underlying claim.
I.
Bala is a naturalized United States citizen of East Indian
origin who joined the DCR’s accounting department in 1985. Since
that time, he has filed numerous employee grievances with the
Department of Employee Dispute Resolution (“EDR”) alleging,
among other things, that the DCR refused to promote him for
discriminatory reasons. Most recently, he filed two related
grievances: one in May 2009, alleging that the DCR failed to
select him for the DCR’s Accounts Payable Supervisor position
owing to discrimination against his age and national origin; and
another in October 2009, alleging that his September 2009
termination (effective December 31, 2009) violated internal
Department of Human Resource Management (“DHRM”) layoff
policies, discriminated against him because of his age and
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national origin, and retaliated against his prior protected
allegations of discrimination. J.A. 370.
Bala’s termination was part of a series of layoffs pursuant
to an overall budget reduction for state agencies. Bala did not
volunteer for early retirement and was not suggested for
termination by his supervisors, but was nevertheless included on
a list of employees under consideration for termination and
eventually selected to be laid off. He alleged in his grievance,
and later in his complaint, that he was selected for involuntary
termination in retaliation for his numerous complaints of
discrimination in grievances and court proceedings.
Employees of Virginia’s state agencies who have employment
complaints file grievances with the EDR as part of a statutorily
created dispute resolution process. The grievances are first
reviewed by management in a three-step internal review process.
Employees who are dissatisfied with the resolution of their
grievances after this process may request a hearing with a
neutral arbiter. The hearing officer’s decision is appealable to
Virginia state circuit court if the employee believes the
decision is contrary to law. Va. Code Ann. § 2.2-3006.
The initial three-step review of Bala’s May and October
2009 grievances, consolidated at his request, J.A. 290-293,
found that DCR had not discriminated, retaliated, or failed to
follow the DHRM policy governing layoffs. Displeased with this
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result, Bala requested and was granted a hearing. The
administrative review of his grievances on February 1, 2011,
found that the DCR had violated the DHRM’s policies (without
reversing the other findings), and the hearing officer directed
DCR to reinstate Bala to his former position. J.A. 372-374.
Meanwhile, Bala had already resumed work with the DCR as an
hourly employee starting in February 2010, and had been
receiving early retirement benefits since his termination. Both
his hourly wages and the early retirement benefits would have
been offset against any back pay he was due upon reinstatement.
So instead of pursuing reinstatement, Bala and the DCR
“concluded that it would be in their best interests to resolve
this situation by agreement,” and they consequently negotiated a
settlement agreement on July 7, 2011. J.A. 46.
Under the terms of the agreement, the agency agreed to not
seek revocation of Bala’s enhanced retirement and related
benefits, and to maintain his hourly position for at least three
years as long as his job performance was satisfactory. J.A. 47.
In return, Bala agreed to “waive any rights accorded to him
pursuant to the hearing officer’s decision of February 1, 2011,
including his reinstatement to his former salaried position.”
Id. The agreement applied to “the grievance dated October, 2009
and/or case # 9295 Hearing officer final decision issued on
February 1, 2011.” Id. The parties declared that each had an
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opportunity to seek counsel, and that the terms had been
carefully read, fully understood, and agreed to voluntarily. Id.On October 23, 2012, however, Bala initiated this civil
action alleging violations of Title VII of the Civil Rights Act
of 1964, as amended, 42 U.S.C. § 2000e-2 and -3, for
discrimination and retaliation based on his race and national
origin. The complaint contained a count of discrimination and a
count of retaliation against the DCR for both refusing to
interview Bala for a grants manager position in 2011 and
involuntarily terminating him in the layoffs in 2009. The
district court granted a 12(b)(6) motion to dismiss on all
counts. Bala v. Commonwealth of Va. Dep’t of Conservation &
Recreation, No. 3:12CV748, 2013 WL 53744, at *1-2 (E.D. Va. Jan.
3, 2013). On appeal, we upheld the dismissal of the
discrimination claim for Bala’s layoff, but reversed on the
other three counts for “consider[ing] DCR’s proffered legitimate
nondiscriminatory reasons at a procedurally improper time,
within the context of a Rule 12(b)(6) motion.” Bala v.
Commonwealth of Va. Dep’t of Conservation & Recreation, 532 F.
App’x 332, 335 (4th Cir. 2013).
On remand, Bala amended his complaint to allege only the
retaliatory discharge claim. He claimed his layoff was in
retaliation for his numerous grievances and court filings
“complaining of race, national origin and age discrimination” --
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in particular his May 2009 grievance for failing to interview
him for an Accounts Payable Supervisor position. J.A. 11-2, 16.
After oral argument and supplemental briefing on the Settlement
Agreement, the district court granted DCR’s motion for summary
judgment on the grounds that the Settlement Agreement precluded
Bala from bringing the claim. Bala v. Commonwealth of Va. Dep’t
of Conservation & Recreation, No. 3:12CV748, 2014 WL 1281235, at
*1, *5 (E.D. Va. Mar. 27, 2014). We now affirm the judgment.
II.
Title VII of the Civil Rights Act of 1964 protects
employees from harms caused by an employer’s discriminatory or
retaliatory actions. While litigation of such claims remains the
ultimate option, the statute itself selected “[c]ooperation and
voluntary compliance” as the “preferred means” for eliminating
unlawful discrimination. Alexander v. Gardner-Denver Co., 415
U.S. 36, 44 (1974).
To that end, Congress created the Equal Employment
Opportunity Commission (“EEOC”) as a mechanism “to settle
disputes through conference, conciliation, and persuasion before
the aggrieved party was permitted to file a lawsuit.” Id.Consistent with that purpose, the EEOC maintains a preference
for “voluntary and expeditious resolution of disputes” between
employers and employees through settlement. Admin. Exemption
Allowing for Waivers Under the ADEA, 50 Fed. Reg. 40,870,
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40,870-40,871 (proposed Oct. 7, 1985) (comparing ADEA and Title
VII claims). Waiver of Title VII claims through settlement,
therefore, is authorized, provided the waiver is knowing,
voluntary, and part of a bargain that resolves the underlying
employment discrimination dispute. See Alexander, 415 U.S. at 52
& n.15; Keith v. Aldridge, 900 F.2d 736, 741 (4th Cir. 1990).
We must therefore determine whether Bala and the DCR’s
Settlement Agreement effected a waiver of Bala’s retaliation
claim. “Settlement agreements operate on contract principles,
and thus the preclusive effect of a settlement agreement ‘should
be measured by the intent of the parties.’” Ohio Valley Envtl.
Coal. v. Aracoma Coal Co., 556 F.3d 177, 211 (4th Cir. 2009);
see also First Sec. Fed. Sav. Bank, Inc. v. McQuilken, 480
S.E.2d 485, 487 (Va. 1997). Where the parties’ intent is clear
from the unambiguous terms of the contract, construed as a
whole, we need not and cannot resort to extrinsic evidence of
intent. See Goodman v. Resolution Trust Corp., 7 F.3d 1123, 1126
(4th Cir. 1993); W.D. Nelson & Co. v. Taylor Heights Dev. Corp.,
150 S.E.2d 142, 145 (Va. 1966).
The Settlement Agreement stated plainly that “the parties
have concluded that it would be in their best interests to
resolve this situation by agreement.” J.A. 46. The “situation”
referenced in that provision is described immediately before it
-- Bala was laid off, filed the October 2009 grievance, and
8
pursued administrative review until he was awarded reinstatement
by a hearing officer. Id. Furthermore, the Agreement stated
clearly that it applied to the October 2009 grievance and/or the
hearing officer’s final decision on February 1, 2011. J.A. 47.
These documents, therefore, were incorporated by reference as if
included in the contract itself. See W.D. Nelson & Co., 150
S.E.2d at 146 (“Writings referred to in a contract are construed
as a part of the contract for the purpose and extent
indicated.”). Finally, Bala explicitly waived any rights related
to or flowing from that February 1, 2011, decision, specifically
including the right to reinstatement to his former position.
J.A. 47.
There can be no doubt that this Settlement Agreement
addressed and resolved the matter now alleged in Bala’s Title
VII retaliation claim. By its plain language, the Agreement
covered “the grievance dated October, 2009 and/or case # 9295
Hearing officer final decision issued on February 1, 2011.” J.A.
47. The October 2009 grievance alleged misapplication of the
agency’s layoff policies, discrimination, and retaliation for
prior charges and grievances, resulting in Bala’s termination.
J.A. 370. That the hearing officer only reversed the claim of
violating agency policy does not magically remove the other
claims from the proceedings. The agency’s alleged retaliation,
in the form of laying him off, is the crux of Bala’s only
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remaining claim in his Title VII complaint. See J.A. 16-17. The
complaint clearly describes the same “situation” that both
parties thought best to resolve by agreement. By so agreeing,
Bala waived the right to resurrect his retaliation claim and
reinstatement remedy in later litigation.
Bala cannot obtain through litigation what he voluntarily
relinquished in the Settlement Agreement for good consideration.
The relief sought in the grievance was reinstatement to his
former position, with back pay and benefits. J.A. 370. He was
granted this relief in the administrative review, and chose to
negotiate away that specific remedy in order to retain his early
retirement benefits and secure his hourly job for the next three
years. J.A. 46-47. Now he seeks to obtain through judicial
action the same remedy that he voluntarily forfeited in the
Settlement Agreement. J.A. 17. He could have expressly reserved
the right to bring the retaliation claim at a later time, but
declined to do so. See Keith, 900 F.2d at 741. Bala negotiated
his terms and obtained the benefit of his bargain. He cannot now
claim what he earlier relinquished.
We thus hold that the Title VII claim for retaliation was
unambiguously included in Bala’s July 7, 2011, Settlement
Agreement with the DCR, and that therefore he is precluded from
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bringing that claim now in order to achieve a second bite at the
apple.
AFFIRMED
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FLOYD, Circuit Judge, dissenting:
This appeal presents a straightforward question regarding
the scope of the parties’ release. In the governing agreement,
Bala agreed “to waive any rights accorded to him pursuant to the
hearing officer’s decision of February 1, 2011.” J.A. 47. It
is undisputed that the only “right” awarded to Bala in the
February 2011 decision was reinstatement to his former position
at the DCR. And the hearing officer granted Bala this right
only because the DCR failed to follow its own internal layoff
policies; the officer did not address Bala’s additional claims
under Title VII.
Yet, the majority concludes that the release also precludes
Bala from pursuing his Title VII retaliation claim in federal
court. This result would be correct if the release stated that
Bala agreed to waive “any and all claims related to his
employment” with the DCR. But that is not what the Agreement--
drafted by the DCR--says. By holding otherwise, the majority
transforms the narrow, specific release at issue into a general
release broadly precluding all claims brought in the October
2009 grievance. The parties were certainly free to negotiate
and agree to such a release. But nothing in the plain language
of the Agreement suggests they actually did so here.
Accordingly, I respectfully dissent.
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I.
It is well-settled that an employee may release a cause of
action under Title VII if the employee’s consent to settlement
is “voluntary and knowing.” Alexander v. Gardner–Denver Co.,
415 U.S. 36, 52 n.15 (1974). But circuits diverge on what an
assessment of voluntariness and knowledge entails: some look
solely to principles of contract interpretation, while others
evaluate the totality of the circumstances surrounding a
purported release. See Pierce v. Atchison, Topeka & Santa Fe
Ry. Co., 65 F.3d 562, 570 (7th Cir. 1995) (collecting cases).
Under either approach, however, the clarity of a purported
waiver’s language is significant. Compare O’Shea v. Commercial
Credit Corp., 930 F.2d 358, 362 (4th Cir. 1991) (considering
this split and determining that the “better approach is to
analyze waivers of ADEA claims under ordinary contract
principles”), superseded by statute, 29 U.S.C. § 626(f), with
Beadle v. City of Tampa, 42 F.3d 633, 635 (11th Cir. 1995)
(listing factors relevant in assessing the totality of the
circumstances, including “the clarity of the agreement”). And
although the Fourth Circuit lacks binding precedent on which
approach governs releases of Title VII claims, see Randolph v.
Caruso Homes, Inc., No. RWT–13–2069, 2014 WL 4661985, at *4 n.6
(D. Md. Sept. 16, 2014), we need not decide that issue, as the
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Agreement’s plain language compels one result under either
approach.
Here, the plain language of the Agreement unambiguously
demonstrates that the parties agreed only to a limited release
that did not include Bala’s Title VII claim. Although we must
derive the parties’ intent from the instrument viewed as a
whole, Atalla v. Abdul–Baki, 976 F.2d 189, 193 (4th Cir. 1992),
Section 4 of the Agreement is the only section that defines the
scope of the release. That section limits Bala’s release to
“any rights accorded to [Bala] pursuant to the hearing officer’s
decision of February 1, 2011, including his reinstatement to his
former salaried position.” * J.A. 47. Significantly, the only
right accorded to Bala pursuant to the February 1 decision was
* This language stands in stark contrast to the broad
language typically used in general releases of Title VII claims.
See, e.g., Smith v. Amedisys Inc., 298 F.3d 434, 441-42 (5th
Cir. 2002) (finding Title VII claims clearly waived by an
employee’s agreement “to release [the employer] of any and all
employment related claims”); Stroman v. W. Coast Grocery Co.,
884 F.2d 458, 460-61 (9th Cir. 1989) (finding clear waiver of
Title VII claims based on a provision stating that the
agreement’s “terms represent a full and final settlement of any
and all claims arising out of [the employee’s] employment with
[his employer]”; Pilon v. Univ. of Minn., 710 F.2d 466, 467-68
(8th Cir. 1983) (finding clear waiver of a Title VII claim in a
provision in which a graduate student released the university
“from any and all manner of action . . . which [the plaintiff]
ever had”); Anderson v. Garbage Disposal Serv., No. 3:00CV294-
MU, 2000 WL 33912330, at *1 (W.D.N.C. Dec. 18, 2000) (finding
clear waiver of a Title VII claim in a provision in which the
plaintiff “released and forever discharged [the employer] of and
from any and all actions related to Plaintiff’s employment”
(brackets omitted)).
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the “specific remedy,” Maj. Op. at 10, of reinstatement to his
former (or a similar) position. And that right was based only
on his having proved his claim that the DCR “did not comply with
the terms and conditions of the Commonwealth of Virginia Layoff
Policy and Procedure Number 1.30.” J.A. 373-74. Thus, I
believe the release clearly applies only to Bala’s right to
reinstatement for the violation of administrative policy, and I
would reverse the district court’s grant of summary judgment.
II.
Rather than conduct a straightforward analysis, the
majority contorts the Agreement and errs in four main respects.
First, the majority erroneously declares that “Bala
explicitly waived any rights related to or flowing from” the
hearing officer’s February 1 decision. Maj. Op. at 9. I agree
that Bala waived his limited right to reinstatement--flowing
from or “accorded” by that decision--but I cannot find where the
Agreement explicitly says that he also waived any rights
“related to” the decision. If such language existed, perhaps we
could interpret the waiver provision to capture the Title VII
claims as “related” (albeit distantly) to the final decision.
See Related Definition, Merriam–Webster Dictionary, www.merriam-
webster.com/dictionary/related (defining “related” as “connected
by reason of an established or discoverable relation”). But in
15
actuality, such language is wholly absent, and the majority errs
by reading it into the Agreement.
Second, the majority relies on Section 5 of the Agreement,
which the majority says incorporates by reference Bala’s October
2009 grievance and the February 1 decision. According to the
majority, merely incorporating these documents by reference
somehow expands the scope of the release to include all claims
at issue in the October 2009 grievance. I disagree. Unlike
Section 4, Section 5 does not define the scope of the waiver.
Indeed, it says nothing about waiver at all. Rather, it states
that the Agreement only applies to the grievance and the
resulting final decision; not that the “waiver” itself applies
to all claims raised in the grievance or adjudicated prior to
the February 1 decision. In reading Section 5 as it does, the
majority simply conflates Section 5 with the actual waiver
language in Section 4.
Third, the majority relies on the Agreement’s recitals,
which describe the procedural posture of Bala’s grievance and
state that the Agreement’s purpose was to “resolve this
situation.” J.A. 46. The majority concludes that the amorphous
reference to a “situation” must mean all of Bala’s claims, and
thus expands the limited release into a general waiver. Again,
I do not believe this is correct. As an initial matter, I do
not read “situation” to unambiguously refer to all of Bala’s
16
claims, as the majority does. Rather, it may just as easily
refer to Bala’s right to reinstatement based on the favorable
February 1 decision. Thus, at best for the DCR’s case, the
recitals create an ambiguity about the scope of Bala’s release.
But even if there is an ambiguity, based on the inclusion of a
vague general expression of intent, “no rational court could say
that a general expression of intent trumps the specific terms
that it introduces.” Kenneth A. Adams, A Manual of Style for
Contract Drafting 32 (3d ed. 2013); see also United Va.
Bank/Nat’l v. Best, 223 Va. 112, 115 (1982) (“Under settled
rules of construction, if the prefatory or recital language
conflicts with the obligatory provisions of the contract, then
the obligatory provisions must prevail.”). And even if the
recitals somehow suffice to create an ambiguity in the
Agreement, we should construe it (at least for the purposes of
the DCR’s summary-judgment motion) against the drafter, the DCR.
Sys. Research & Applications Corp. v. Rohde & Schwarz Fed. Sys.,
Inc., 840 F. Supp. 2d 935, 945 (E.D. Va. 2012) (citing Martin &
Martin, Inc. v. Bradley Enters., Inc., 256 Va. 288, 291 (1998)).
Finally, validating such vagueness as sufficient to
constitute waiver poses a real threat to employees’ ability to
pursue their rights under Title VII. Essentially, the majority
equates the mere existence of a waiver provision to a full,
exhaustive release of an employee’s right to bring any pending
17
claims. If the Agreement at issue suffices for such a release,
I am hard pressed to imagine what the majority would find
inadequate. Indeed, as the majority opinion hypothesizes, the
burden is now on employees to insist on language reserving any
such rights, Maj. Op. at 10, even where an agreement does not
reference Title VII claims and even where a waiver provision is
otherwise narrow. In placing such a burden on employees, the
majority simply disregards the basic tenet that “[w]aivers of
federal remedial rights . . . are not lightly to be inferred.”
Torrez v. Pub. Serv. Co. of N.M., Inc., 908 F.2d 687, 689 (10th
Cir. 1990) (per curiam) (citing Watkins v. Scott Paper Co., 530
F.2d 1159, 1172 (5th Cir. 1976)); see also Pierce v. Atchison
Topeka & Santa Fe Ry. Co., 110 F.3d 431, 438 (7th Cir. 1997);
Lyght v. Ford Motor Co., 643 F.2d 435, 441 (6th Cir. 1981).
For these reasons, I respectfully dissent.
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