Collette Hampton v. Ford Motor Company

In the
United States Court of Appeals
For the Seventh Circuit
No. 08-1346
C OLLETTE H AMPTON,
Plaintiff-Appellant,
v.
F ORD M OTOR C OMPANY,
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 06 CV 6720—George W. Lindberg, Judge.
A RGUED N OVEMBER 3, 2008—D ECIDED A PRIL 6, 2009
Before K ANNE, E VANS, and SYKES, Circuit Judges.
K ANNE, Circuit Judge. Collette Hampton worked the
night shift at Ford Motor Company’s Chicago assembly
plant, where she was allegedly harassed and discriminated
against by her coworkers. On October 16, 2006, she ac-
cepted a voluntary buyout package, agreeing to terminate
her employment with Ford in exchange for $100,000.
As one condition of the package, Ford required Hampton
to release any and all claims against Ford related to her
2 No. 08-1346
employment and arising prior to the execution date. After
signing the release and cashing the check, Hampton filed
a lawsuit against Ford based on conduct occurring prior
to October 16, 2006. The district court granted summary
judgment in Ford’s favor, finding that the buyout agree-
ment validly released her claims; Hampton appeals that
judgment. We agree with Ford that Hampton knowingly
and voluntarily signed a release that encompassed her
claims. Therefore, summary judgment in Ford’s favor
is warranted.
I. B ACKGROUND
It is no secret that the American automotive industry
has had its share of difficulties in recent years. In 2006,
facing a deteriorating market for American automobiles,
the Ford Motor Company agreed with the United Auto
Workers 1 to offer a one-time, systemwide buyout to
certain qualified hourly employees. The goal of the pro-
gram was to reduce Ford’s workforce without imposing
layoffs and to provide its employees with an incentive
to resign voluntarily. The buyout program included a
variety of packages, ranging from encouraging early
retirement to providing a subsidized college education.
1
The UAW is officially titled the International Union, United
Automobile, Aerospace and Agricultural Implement Workers
of America.
No. 08-1346 3
A. The STEP Program and Waiver Agreement
The buyout package at issue in this case was called the
Special Termination of Employment Program (STEP).
Under the STEP, an eligible employee who agreed to
terminate his or her employment received a lump sum
payment of $100,000, minus the applicable withholdings.
To enroll, Ford required the employee to sign an Applica-
tion and Waiver Agreement (“the Waiver”), in which the
employee released any and all claims against Ford as a
condition of receiving the $100,000. The Waiver stated,
in pertinent part:
I have decided voluntarily to terminate my em-
ployment under the terms and conditions of the
STEP. In consideration of the benefits to be pro-
vided as described in the summary, I waive and
release any and all rights or claims I may have
against the Ford Motor Company, its agents or
employees and agree not to institute any proceed-
ings of any kind against Ford Motor Company, its
agents or employees relating in any way to my
employment or the termination of my employment,
provided, however, I do not waive my rights or
claims under the Age Discrimination in Employ-
ment Act.
This waiver does not waive any rights or claims
that may arise after this waiver is signed or if it is
not permitted by law. . . .
I hereby acknowledge that I am voluntarily
applying for this STEP payment. . . . I have read
and reviewed this STEP Application and Waiver
Agreement carefully and to my satisfaction.
4 No. 08-1346
The terms and scope of this Waiver are at the center of this
case.
Ford notified all eligible employees of the buyout
program well in advance of the enrollment period. Ford
also provided its employees with written materials de-
scribing the available packages and the procedure for
participating, along with a copy of the Waiver. According
to these documents, an employee could enroll in the
buyout any time between October 16 and November 27,
2006, and the effective termination date for participating
employees would be January 1, 2007. If an employee
signed up, but failed to complete the termination process,
Ford would consider the employee to have withdrawn
the STEP application. Thus, the employee had the option
to rescind or withdraw her application any time before
December 31, 2006.
B. Plaintiff-Appellant Collette Hampton
In early 2004, Collette Hampton began working the
night shift on the “chassis line” at Ford’s Chicago
assembly plant. Beginning that summer, Hampton alleg-
edly suffered ongoing sexual harassment and discrimina-
tion by her coworkers. In May 2005, after retaining legal
counsel, she submitted a statement concerning her alleged
harassment to Ford management. Ford investigated
her claims and found them to be uncorroborated, yet it
agreed to move Hampton to the “motor line” in mid-
August 2005. Hampton did not experience any harass-
ment after switching job duties. On December 7, 2005, she
filed a Charge of Discrimination with the Illinois Depart-
No. 08-1346 5
ment of Human Rights and the Equal Employment Oppor-
tunity Commission alleging that she was harassed and
discriminated against by her coworkers on the “chassis
line.”
In early August 2006, while awaiting response to her
EEOC charge, Hampton learned of Ford’s voluntary
buyout program and decided she wanted to participate.
Toward the end of August, Ford planned to lay off
a number of employees—including Hampton—in a
seniority-based reduction in force. Faced with upcoming
unemployment, Hampton naturally considered the
buyout to be an attractive alternative. She asked her UAW
representative to inquire about her eligibility and, if
necessary, negotiate with Ford to allow her to participate.
On October 2, 2006, Ford sent Hampton a letter con-
firming that she would be eligible for the STEP and
notifying her of an informational meeting on October 10,
which she did not attend. Hampton also received written
materials explaining the details of the buyout, including
the effect of receiving a STEP payment and the procedure
for applying. According to the materials, Hampton could
apply for the STEP at any time between October 16 and
November 27, 2006. Ford also directed its employees to
pose any questions about the STEP to the personnel/labor
relations department or their UAW representative. Fol-
lowing Hampton’s initial conversation with her UAW
representative regarding her eligibility, she did not speak
to anyone else about the buyout.
On the first day of the application period, Hampton
applied for the STEP and signed the Waiver. Hampton
6 No. 08-1346
testified at her deposition that she unsuccessfully at-
tempted to contact her attorney before signing. However,
representatives from Ford’s human resources depart-
ment and the UAW, each of whom witnessed Hampton’s
signature and also signed the Waiver, were available to
discuss the agreement and answer additional questions.
Hampton later provided her attorney with a copy of the
executed agreement. Hampton’s effective termination
date was January 1, 2007, after which she received and
promptly cashed a check for $64,429—the $100,000 STEP
payment, less applicable withholdings.
On November 17, 2006, a month after Hampton signed
the Waiver, but before the application enrollment period
concluded, the EEOC issued her a right-to-sue letter based
on her December 2005 charge. On December 6, 2006, she
filed the instant lawsuit in the Northern District of
Illinois, alleging sexual discrimination and harassment
in violation of Title VII of the Civil Rights Act of 1964,
42 U.S.C. § 2000e-2(a)(1).
Following discovery, Ford filed a motion for summary
judgment, in which it denied the merits of Hampton’s
claims and argued that she waived her claims by
signing the Waiver on October 16, 2006. On January 7, 2008,
the district court granted summary judgment in Ford’s
favor. The court did not reach the substance of
Hampton’s Title VII claims because it determined that
she had released them as a matter of law. Hampton
now appeals.
No. 08-1346 7
II. A NALYSIS
The only issue on appeal is whether the district court
properly granted summary judgment against Collette
Hampton. We review the district court’s grant of sum-
mary judgment de novo and construe all facts and rea-
sonable inferences in the light most favorable to Hampton.
Sycamore Indus. Park Assocs. v. Ericsson, Inc., 546 F.3d 847,
850 (7th Cir. 2008). Summary judgment is proper when
the evidence on file demonstrates that there is no genu-
ine issue as to any material fact. Fed. R. Civ. P. 56(c). A
disputed fact is “material” if it might affect the outcome
of the suit under the governing law. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986).
Hampton claims that she did not release her Title VII
claims by signing the Waiver on October 16, 2006. She
propounds an assortment of arguments to support this
conclusion, each of which falls within one of two
separate issues: (1) whether the parties intended for the
Waiver to cover Hampton’s Title VII claims; and
(2) whether she executed the Waiver knowingly and
voluntarily. We address both arguments and find
against Hampton on each. First, she signed an agreement
releasing any and all claims related to her employment
that arose before October 16, 2006. Her Title VII claims
fit that description, and the Waiver therefore encom-
passed them. Second, she entered the Waiver knowingly
and voluntarily. Therefore, we agree with the district
court’s decision to grant summary judgment in Ford’s
favor.
8 No. 08-1346
A. The Scope of the STEP Waiver Agreement
Hampton first contends that she did not intend for the
Waiver to bar her Title VII claims. She provides the follow-
ing reasons to support this assertion: she filed an EEOC
charge reporting the alleged harassment prior to
signing the Waiver; she could not file a lawsuit until
she received a right-to-sue letter; her lawyer was not
involved in negotiating the waiver; the waiver was not
“expressly conditioned” on the release of her Title VII
claim; and the waiver agreement was ambiguous. A
release is simply a particular type of contract, and Illinois
law governs questions regarding the parties’ intent and
the proper construction of the agreement. See Newkirk v.
Vill. of Steger, 536 F.3d 771, 774 (7th Cir. 2008).
Our primary objective in construing a contract is to
give effect to the intent of the parties. Vill. of S. Elgin v.
Waste Mgmt. of Ill., Inc., 810 N.E.2d 658, 670 (Ill. App. Ct.
2004). Illinois follows the objective theory of intent,
whereby the court looks first to the written agreement
and not to the parties’ subjective understandings.
Newkirk, 536 F.3d at 774. “The status of a document as a
contract depends on what the parties express to each
other and to the world, not on what they keep to them-
selves.” Skycom Corp. v. Telstar Corp., 813 F.2d 810, 814-15
(7th Cir. 1987). Thus, we must not interpret contractual
language in a way contrary to the plain, obvious, and
generally accepted meaning of its terms. Krilich v. Am. Nat’l
Bank & Trust Co. of Chi., 778 N.E.2d 1153, 1164 (Ill. App. Ct.
2002).
No. 08-1346 9
A standard principle of contract law is that we will not
disturb an unambiguous agreement. Where a con-
tractual release is clear and explicit, we must enforce it as
written. Rakowski v. Lucente, 472 N.E.2d 791, 794 (Ill. 1984);
Farmers Auto. Ins. Ass’n v. Wroblewski, 887 N.E.2d 916, 923
(Ill. App. Ct. 2008). A contract is ambiguous if its terms
may reasonably be interpreted in more than one way,
Krilich, 778 N.E.2d at 1164, but it is not rendered ambigu-
ous simply because the parties disagree upon its proper
construction, Whiting Stoker Co. v. Chi. Stoker Corp., 171
F.2d 248, 250-51 (7th Cir. 1948). Rather, an ambiguous
contract is “an agreement obscure in meaning, through
indefiniteness of expression, or having a double mean-
ing.” Id. at 251.
In Hampton’s case, we need look no further than the
Waiver. According to its language, in exchange for the
STEP benefits Hampton agreed to release “any and all
rights or claims” she may have had against Ford, and not
to institute “any proceedings of any kind” against Ford
relating “in any way” to her employment. The Waiver
then expressly stated that Hampton did not waive “any
rights or claims that may arise after” she signed the
Waiver.
First, we find no ambiguity in the Waiver. Both our court
and Illinois courts have determined that releases with
similar language were unambiguous. See, e.g., Pierce v.
Atchison, Topeka & Santa Fe Ry. Co. (Pierce I), 65 F.3d 562,
568 (7th Cir. 1995) (finding agreement that released “any
and all claims of any nature” sufficient to release plain-
tiff’s federal claim); Rakowski, 472 N.E.2d at 794 (finding
10 No. 08-1346
release of “any and all claims” unambiguous). Hampton
argues that the parties did not intend for the Waiver to
release all claims “in the usual sense” because it was
intended as a company-wide buyout, printed on a form
agreement, with no negotiation between the parties. But
these extrinsic circumstances do not affect the plain
meaning of the Waiver’s language and provide us with
no reason to believe that the parties “couldn’t have
meant what they seem to have said.” Pierce I, 65 F.3d at
568 (quotations omitted).
Second, the scope of the Waiver’s “any and all” language
encompassed Hampton’s discrimination claims. A
general release typically covers “all claims of which a
signing party has actual knowledge or that he could have
discovered upon reasonable inquiry.” Fair v. Int’l Flavors &
Fragrances, Inc., 905 F.2d 1114, 1116 (7th Cir. 1990) (quota-
tions omitted); see also Wagner v. NutraSweet Co., 95 F.3d
527, 533 (7th Cir. 1996). Neither party disputes that
Hampton was aware of the alleged wrongful acts prior
to the date she signed the Waiver. Her claims fall within
the Waivers’s scope unless Hampton presents a persua-
sive reason for construing the Waiver to exclude them.
Hampton’s primary assertion is that the Waiver did not
release her Title VII claims because they did not “arise”
until after she received her EEOC right-to-sue letter
allowing her to file suit in federal court. Hampton is
incorrect. See, e.g., Pierce I, 65 F.3d at 567-68 (holding that
a general release covered plaintiff’s claim, even though
he had already filed an EEOC charge). The natural mean-
ing of the term “arise” in the Waiver is that Ford intended
No. 08-1346 11
for Hampton to release any potential claims based on
conduct that occurred prior to the execution date. Cf.
Wagner, 95 F.3d at 533 (“In release cases, the question is
not when was the date of accrual [for the statute of limita-
tions], but rather whether the plaintiff is knowingly
giving up the right to sue on some claims, or all claims
that are in general terms predictable.”); Capocy v. Kirtadze,
183 F.3d 629, 634 (7th Cir. 1999) (“Illinois courts read
general releases to include claims of which the parties
were aware at the time of the release’s execution.”); Myers
v. Health Specialists, S.C., 587 N.E.2d 494, 499 (Ill. App. Ct.
1992) (noting that no justiciable claim “arose” until plain-
tiff suffered injury or a real threat thereof). Filing an
EEOC charge and awaiting a right-to-sue letter do not
alter that the conduct giving rise to Hampton’s Title VII
claims occurred before she signed the Waiver, and she
was well within her rights to voluntarily release those
claims.
Furthermore, Hampton agreed not only to waive any
claims that arose before signing the Waiver, but also “not
to institute any proceedings of any kind against Ford.” The
Title VII administrative scheme is distinct from a
federal lawsuit. Although filing a charge with the EEOC
is a prerequisite to bringing a federal action, see 42
U.S.C. § 2000e-5(b), such a charge does not automatically
institute a lawsuit. In fact, a component of Congress’s
original plan in drafting Title VII and creating the EEOC
was to facilitate conciliation and settlement. See id. A mere
two months after signing the Waiver, Hampton filed a
complaint in the district court alleging wrongdoing that
occurred prior to the execution date. In so doing, she
12 No. 08-1346
initiated a proceeding in violation of the clear terms of
the Waiver.
Hampton’s remaining arguments regarding the scope
of the Waiver are unpersuasive. Ford’s failure to refer
expressly to Hampton’s Title VII claims does not exclude
them from the Waiver’s scope; a party need not
enumerate the specific claims an employee is waiving in a
general release. See Wagner, 95 F.3d at 533; Constant v.
Cont’l Tel. Co. of Ill., 745 F. Supp. 1374, 1380 (C.D. Ill. 1990);
Rakowski, 472 N.E.2d at 794. The Waiver also expressly
excluded claims under the ADEA, which provides
further support that it included all other claims. Next,
Hampton suggests that Ford provided no consideration for
relinquishing her Title VII claims, but she fails to explain
why $100,000 does not qualify. Finally, despite her un-
founded assertions that the Waiver was a contract of
adhesion, Hampton does not allege that she signed the
Waiver under duress or that it was otherwise invalid
under state law. Therefore, we find that the Waiver
unambiguously covered any and all claims arising prior
to the date Hampton signed, including her discrim-
ination claims.
B. Validity of the STEP Waiver Agreement Under Federal
Law
An employee may waive or release a Title VII claim.
Wagner, 95 F.3d at 532. For a release affecting a federal
right to be valid, it must not only be valid under state
law, but it must also be knowing and voluntary. See
No. 08-1346 13
Alexander v. Gardner-Denver Co., 415 U.S. 36, 52 n.15 (1974);
Pierce I, 65 F.3d at 570. For us to reach this issue, how-
ever, the party challenging the release “must come
forward with specific evidence sufficient to raise a ques-
tion as to the validity of the release.” Pierce v. Atchison
Topeka & Santa Fe Ry. Co. (Pierce II), 110 F.3d 431, 438 (7th
Cir. 1997).
Hampton provides a litany of circumstances that alleg-
edly led her to believe that she was not releasing her
Title VII claims. Notably missing, however, is a direct
assertion that she did not read or understand the
Waiver. Despite this, we believe that Hampton’s scat-
tered allegations regarding the circumstances sur-
rounding the Waiver are sufficient for us to reach the
issue of whether she entered it knowingly and volun-
tarily. Those claims include, among others, that the docu-
ment was generic and offered to thousands of other
Ford employees; that her lawyer did not review the
Waiver before she signed it; that she was not allowed to
take a copy of it home before she signed it; that there
were no “real negotiations”; and that neither Ford nor
the UAW explained the release to her.
To determine whether a party entered a release know-
ingly and voluntarily, we must examine the totality of
the circumstances surrounding its execution and consider
a number of factors, including, but not limited to:
(1) the employee’s education and business experi-
ence; (2) the employee’s input in negotiating the
terms of the settlement; (3) the clarity of the agree-
ment; (4) the amount of time the employee had
for deliberation before signing the release;
14 No. 08-1346
(5) whether the employee actually read the release
and considered its terms before signing it;
(6) whether the employee was represented by
counsel or consulted with an attorney; (7) whether
the consideration given in exchange for the
waiver exceeded the benefits to which the em-
ployee was already entitled by contract or law;
and (8) whether the employee’s release was in-
duced by improper conduct on the defendant’s
part.
Pierce I, 65 F.3d at 571 (footnote omitted).
Applying these factors to Hampton’s circumstances, we
conclude that she entered the Waiver knowingly and
voluntarily. Hampton graduated from high school, com-
pleted some college courses, and later took paralegal
classes that included, ironically, a course in contracts.
She has no difficulty reading, and as we stated above, the
agreement was clear and unambiguous. And just above
Hampton’s signature, the Waiver provided that she read
and reviewed the agreement carefully.
Hampton had ample time to consider whether to sign
the Waiver. Ford advertised the buyout program well in
advance, provided written materials to its employees,
and even held a meeting to discuss the various options.
Ford then scheduled a period of nearly six weeks in
which an interested employee could enroll. Hampton,
apparently eager to receive the STEP payment, asked her
UAW representative to confirm her eligibility and then
chose to sign up on the first day. She also had approxi-
mately one additional month after the enrollment period
ended to withdraw or rescind the agreement.
No. 08-1346 15
Hampton was represented by an attorney at the time
she signed the Waiver. Although her attorney was not
involved in negotiating its terms, nothing prevented
Hampton from consulting him before signing, and Ford
did not discourage her from doing so; Hampton even
testified that she unsuccessfully attempted to reach him.
Hampton provides no legal authority for her assertion
that Ford had a duty to contact her attorney before she
signed the Waiver. Two parties to a dispute may discuss
and settle their claims directly, even if represented by
counsel. See Model Rules of Prof’l Conduct R. 4.2 cmt. 4.
Furthermore, Hampton showed the Waiver to her attor-
ney prior to her last day at Ford, within the time when
she could have rescinded it.
As to the remaining factors, Ford provided consideration
for Hampton’s release, to the tune of a $100,000 cash
payment. Hampton alleges no improper conduct on
Ford’s part, and we agree that the company committed
none. The only factor that arguably swings in Hampton’s
favor is that she had no input regarding the Waiver’s terms
because Ford offered all qualified employees the same
Waiver. However, nothing indicates that these terms were
unreasonable or unfair. Further, Hampton signed the
Waiver in front of a UAW representative, and she did not
ask for assistance, clarification, or more favorable terms.
She was well aware of her pending EEOC charge and was
free to request additional consideration for releasing
any Title VII claims. For these reasons, we find that
Hampton entered the Waiver knowingly and voluntarily.
Last, we should also note that Hampton has not offered
to return to Ford the consideration she received for
16 No. 08-1346
signing the Waiver. Because we have determined that her
Title VII claims fall within the scope of the Waiver, her
only means to pursue those claims is if the Waiver were
invalid and rescinded. To the extent that Hampton is
asking for rescission, however, she must return—or at
least offer to return—the consideration she received
under the contract. See Fleming v. U.S. Postal Serv. AMF
O’Hare, 27 F.3d 259, 260-61 (7th Cir. 1994). No exception
to the tender rule exists in this case, and Hampton has
neither returned nor offered to return $64,429 to Ford.
Consequently, her challenge must fail for this additional
reason.
III. C ONCLUSION
For the above reasons, we find no genuine issue of
material fact regarding the validity or scope of the STEP
Waiver Agreement. The Waiver unambiguously encom-
passed Hampton’s Title VII claims, and she executed it
knowingly and voluntarily. Therefore, the district court
properly granted summary judgment in favor of the
Ford Motor Company, and we A FFIRM .
4-6-09