Long v. Sears Roebuck & Co

Opinions of the United
1997 Decisions States Court of Appeals
for the Third Circuit

2-6-1997

Long v. Sears Roebuck & Co
Precedential or Non-Precedential:

Docket 96-1264

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1997

Recommended Citation
"Long v. Sears Roebuck & Co" (1997). 1997 Decisions. Paper 32.
http://digitalcommons.law.villanova.edu/thirdcircuit_1997/32

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 1997 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
 UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________

No. 96-1264
___________

THOMAS LONG

vs.

SEARS ROEBUCK & COMPANY;
SEARS MERCHANDISE GROUP

Thomas G. Long

Appellant
___________

Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civ. No. 95-cv-00141)
___________

Argued
October 11, 1996
Before: MANSMANN and GREENBERG, Circuit Judges,
and HILLMAN, District Judge.*

(Filed February 6, l997)
___________

Richard Z. Freemann, Jr., Esquire (ARGUED)
1650 Market St.,
Suite 4900
Philadelphia, PA 19103

COUNSEL FOR APPELLANT

Robert M. Goldich, Esquire (ARGUED)
Rachel S. Lieberman, Esquire
Wolf, Block, Schorr &
Solis-Cohen
S.E. Corner 15th & Chestnut Streets
Packard Building, 12th Floor
Philadelphia, PA 19102

COUNSEL FOR APPELLEES

* Honorable Douglas W. Hillman of the United States
District Court for the Western District of Michigan, sitting by
designation.

Cathy Ventrell-Monsees, Esquire

1
Laurie A. McCann, Esquire
Melvin Radowitz, Esquire
American Association of Retired Persons
601 E Street, N.W.
Washington, D.C. 20049

COUNSEL FOR AMICUS-APPELLANT
AMERICAN ASSOCIATION OF RETIRED PERSONS

C. Gregory Stewart
General Counsel
Gwendolyn Young Reams
Associate General Counsel
Vincent J. Blackwood
Assistant General Counsel
Jennifer S. Goldstein, Esquire (ARGUED)
Equal Employment Opportunity Commission
1801 L Street, N.W.
Washington, D.C. 20507

COUNSEL FOR AMICUS-APPELLANT
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

Ann E. Reesman, Esquire
Robert E. Williams, Esquire
Mary Chlopecki, Esquire
McGuiness & Williams
1015 15th Street, N.W.
Suite 1200
Washington, D.C. 20005

COUNSEL FOR AMICUS-APPELLEE
EQUAL EMPLOYMENT ADVISORY COUNCIL
___________

OPINION OF THE COURT
__________

MANSMANN, Circuit Judge.

Thomas Long, a former Sears employee, appeals an order

of the district court granting summary judgment in favor of Sears

in an action filed by Long based in part on the Age

Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et

seq., as amended by Title II of the Older Workers Benefit

Protection Act of 1990 ("OWBPA"), 29 U.S.C. § 626(b). The main

issue, one of first impression for us, concerns the effect of a

2
release, drafted by Sears and executed by Long, by which Long

purported to waive all claims, including those based on age

discrimination, associated with his termination. The district

court rejected Long's argument that the release was invalid

because it failed to meet specific and detailed requirements of

the OWBPA. The court declined to consider alleged deficiencies

in the release, concluding that the document, even if flawed, was

ratified when Long accepted and retained severance benefits paid

to him following execution of the release. Reasoning that the

ratified release operated to preclude all claims associated with

Long's termination, the district court granted summary judgment

in favor of Sears.

Because we are convinced that the ratification doctrine

should not apply to a waiver of age discrimination claims which

is invalid under the OWBPA and that Long should not be required

to tender back severance benefits before proceeding with his age

discrimination claims, we find that the grant of summary judgment

with respect to these claims was inappropriate. We will,

therefore, reverse in part the order of the district court

relating to the ADEA claim. We will remand the non-ADEA claims

for further consideration.

I.

The relevant facts, which relate primarily to Long's

employment history with Sears, are undisputed. Long, who was

born in 1936, had a thirty year history with Sears where,

beginning in 1964, he worked in a variety of sales capacities.

3
From the early 1980s Long was employed in Sears' Home Improvement

Products and Services Division (HIPS). As a HIPS employee, Long,

at different times, sold heating and air conditioning, siding,

windows, and doors, although his primary responsibility was to

sell roofing. By all accounts, Long's job performance was

excellent and his earnings, based on straight commission, were in

the neighborhood of $100,000 per year.

In 1992, Sears analyzed the HIPS division's economic

performance and concluded that reorganization was warranted. In

January 1993 Sears announced that its HIPS division, with the

exception of one unit, would close nation-wide. HIPS employees

were told that Sears would discontinue its home improvement

services permanently and that it would lay off employees not

transferred to other Sears positions by mid-April. Employees

allegedly were promised that every effort would be made to place

them elsewhere in the Sears organization and were told that

placement preference would be given to long-term HIPS employees

with satisfactory performance.

In February 1993 Sears offered Long and certain other

employees a reorganization package which included severance

benefits. In exchange for the package, eligible employees were

asked to sign a "General Release and Waiver" which read as

follows:
GENERAL RELEASE AND WAIVER I

In consideration of the benefits I will receive under
the Sears Closed Unit/ Reorganization
Severance Allowance Plan as described in the
attached Benefit Notification form, I,
_________________ hereby release, waive, and
forever discharge officers, successors, and

4
 assigns from any and all actions, causes of
action (INCLUDING, BUT NOT LIMITED TO,
ACTIONS UNDER TITLE VII OF THE CIVIL RIGHTS
ACT OF 1964, THE AGE DISCRIMINATION IN
EMPLOYMENT ACT, STATE CIVIL RIGHTS STATUTES,
AND THE AMERICANS WITH DISABILITY ACT),
damages or claims of damage of every
character whatsoever by reason of my
employment with Sears, whether known or
hereafter discovered, including, but not
limited to, my termination from Sears.

I have read this General Release and Waiver and
understand all of its terms. I have signed
it voluntarily with full knowledge of its
legal significance. I have been given the
opportunity to consult with an attorney but
have chosen not to do so.

Date:______________ /s/______________________

Written in capital letters across the top of the release was the

following: "DO NOT SIGN THIS UNTIL YOU HAVE READ THE ATTACHED

NOTICE."

The notice attached bore a heading which read:

"IMPORTANT NOTICE: THIS NOTICE IS BEING PROVIDED TO SATISFY THE

REQUIREMENTS OF THE OLDER WORKERS BENEFIT PROTECTION ACT." The

notice itself provided that: 1) an employee would have up to

forty-five days from receipt of the severance package to decide

whether to sign the release; 2) the release was revocable for up

to seven days following its execution and no severance payments

would be made until this seven day period had passed; 3) a list

was attached showing the birth dates and job titles of those to

whom the package had been offered; and 4) if applicable, a list

was attached which included a list of employees deemed ineligible

to receive the package. The notice also contained a provision

suggesting that the employee consult an attorney prior to signing

5
the release and clarified that rights which might arise in the

future would not be waived by signing the release.

Although he now alleges that he did not understand the

terms or significance of the release, Long signed the document on

March 18, 1993. He contends that he was pressured by his

supervisor to sign and did so, in part, based upon his confidence

that he would eventually be placed elsewhere in the Sears

organization. Although he actively sought a transfer, Long was

not offered another position; his last day of work was April 9,

1993.1

On March 8, 1994, after having signed the release and

receiving more than $39,000 in severance benefit payments,2 Long

filed charges of discrimination with the Equal Employment

Opportunity Commission and the Pennsylvania Human Relations

Commission alleging violations of the Age in Discrimination in

Employment Act of 1967, 29 U.S.C. § 621-634, and the Pennsylvania

Human Relations Act of 1955 ("PHRA"), 43 Pa. Cons. Stat. Ann. §

951-863. Long claimed that he was discriminated against based on

his age because, following his layoff, Sears "retrained younger

employees with less seniority" to work in other departments and,

contrary to its representation, Sears "continued its Home

Improvement Operations."

1. Because Sears placed Long on a one-year leave of
absence, his actual date of termination was April 8, 1994.

2. It is undisputed that Long was not otherwise entitled
to receive these payments from Sears. Unlike the Sears general
pension plan, the severance package offered to Long provided for
twenty-six weeks of pay in addition to other benefits. Sears
allegedly failed to inform Long that he could opt to accept a
less generous severance package without executing a release.

6
 On January 10, 1995, Long filed a complaint in the

district court claiming age discrimination under the ADEA and the

PHRA. He also alleged that Sears violated Section 510 of the

Employment Retirement Security Act of 1974 ("ERISA"), 29 U.S.C. §

1140, by terminating his employment to avoid further accrual and

payment of pension benefits, and asserted state common law

claims.3

In response to Long's complaint, Sears filed an answer

raising, among others, the following affirmative defense:

"Plaintiff has waived and released all claims against [Sears]"

and "Plaintiff ratified his waiver and released all claims

against [Sears] by his acceptance of and failure to return his

severance payment."

Thereafter, Sears filed a motion for summary judgment,

alleging that Long's claims were barred by the release.

Specifically, Sears argued that the release satisfied the

requirements of the OWBPA and that, in any event, Long had

ratified the release, making it enforceable despite any statutory

deficiencies. Long opposed this motion with facts alleged to

demonstrate discrimination and filed a cross-motion for summary

judgment contending that the release was invalid for failure to

comply with the requirements of the OWBPA4 and was void and

3. In October, 1995, Long amended his complaint to add a
claim alleging that Sears discriminated against him on the basis
of age after the date of his termination when it failed to rehire
him.

4. Specifically, Long alleges that the release violated
the OWBPA in the following respects: 1) it purported to bar
future claims; 2) the release was not accompanied by the required

7
unenforceable because it had been obtained by fraud. Long agreed

to credit severance pay received against any damages awarded.

On March 1, 1996, the district court granted summary

judgment in favor of Sears on all claims without addressing

Sears' compliance with the OWBPA. While the court recognized

that "[w]hether the Sears release meets the facial requirements

of the OWBPA is a question of fact not resolvable here by summary

judgment," it concluded that summary judgment was, nonetheless,

appropriate. In reaching this conclusion the district court

relied on authority holding that releases which fail to conform

to the OWBPA are merely voidable and, under traditional

principles of contract law, may be ratified by retention of

benefits received. Citing the decision in Wamsley v. Champlin

Refining and Chemical, Inc., 11 F.3d 534 (5th Cir. 1993), the

district court concluded that the ratification doctrine had

survived the enactment of the OWBPA and operated to bar Long's

claims:
Because Long retained, and did not offer to return more
than $39,000 paid in consideration of a
Release that he suspected was defective, we
hold that he ratified that Release and is
precluded from pressing claims arising from
his termination by Sears.

1996 WL 94537 at *8 (E.D. Pa. March 1, 1996).5 This appeal

followed.
(..continued)
data relating to other Sears employees; and 3) the release
materials were incomprehensible to Long and other employees.

5. Two days prior to trial the district court, in a pre-
trial conference, signalled its intent to grant summary judgment
in favor of Sears. Understanding that the court's decision
turned on his retention of benefits, Long submitted a brief in
which he offered to tender the money. This brief and the court's

8
 II.

Our review of the district court's grant of summary

judgment is plenary. "[B]ecause the facts are undisputed, we

decide [this] appeal as a matter of law." DiBiase v. SmithKline

Beecham, 48 F.3d 719 (3d Cir.), cert. denied, 116 S. Ct. 306

(1995). The legal questions before us are straightforward: (1)

Are releases of ADEA claims which fail to conform to the

requirements of the OWBPA enforceable or can they be rendered

enforceable, or ratified, by an employee's acceptance and

retention of severance benefits? (2) Where ratification does not

apply, does retention of severance benefits operate nonetheless

to prevent an employee from pursuing a claim under the ADEA?6

(3) Where a release of ADEA claims is invalid under the OWBPA and

does not, therefore, release the employer from liability for the

ADEA claims, is the release nonetheless effective in insulating

the employer with respect to non-ADEA claims covered by the

release?

The district court granted summary judgment in favor of

Sears, predicting that we would hold that Long, by retaining

(..continued)
order granting summary judgment were docketed the same day.
Apparently, they "crossed in the mail."

6. Long also asks that we determine whether the release at
issue waived future claims in violation of the OWBPA. Because
the district court found it unnecessary to determine whether the
release did, in fact, fail to comply with the OWBPA, our
consideration of this issue would be premature. Our disposition
of this appeal will require that the district court assess the
merits of this argument, as well as Long's other allegations of
statutory deficiency.

9
severance benefits, ratified the allegedly defective release and,

as a result, is precluded from pursuing a claim under the ADEA.

This prediction was based, in part, on the decision in Ponzoni v.

Kraft General Foods, 774 F. Supp. 299 (D.N.J. 1991), aff'd, 968

F.2d 14 (3d Cir. 1992). In Ponzoni, a pre-OWBPA case, we

affirmed without opinion the district court's determination that

a release of ADEA claims which was not knowing and voluntary

could be enforced, nonetheless, because it had been ratified

through retention of benefits. As we will explain, we conclude

that the enactment of the OWBPA changed the legal landscape with

respect to the release of ADEA claims. In light of the law as it

now stands, we conclude that the ratification doctrine does not

apply to ADEA releases which fail to comply with the OWBPA.7 As

a result, the district court erred in granting Sears' motion for

summary judgment. This error is rooted in the fact that the law

with respect to employee releases which fail to comply with the

OWBPA is unsettled.

In order to place the issues raised here in context we

turn to the language and legislative history of the OWBPA.

III.

The Older Workers Benefit Protection Act became

effective on October 16, 1990, as an amendment to the ADEA. Its

purpose was two-fold: to "make[] clear that discrimination on

7. The decision in Ponzoni does not control the outcome of
this case as our affirmances, without opinion, of district court
decisions are not binding precedent. See Ransom v. Marrazzo, 848
F.2d 398, 411 (3d Cir. 1988).

10
the basis of age in virtually all forms of employee benefits is

unlawful," and to "ensure[] that older workers are not coerced or

manipulated into waiving their rights to seek legal relief under

the ADEA." S. Rep. No. 263, 101st Cong., 2d Sess. 2 (1990).

Congress' concern over employee waiver of rights under the ADEA

was summarized as follows:
[E]arly retirees or employees offered the chance to
participate in exit incentive or other group
termination programs can effectively be
forced to waive their right to file a claim
when the employer conditions such
participation on the signing of a waiver.
The problem is particularly acute in large-
scale terminations and lay-offs, where an
individual employee would not reasonably be
expected to know or suspect that age may have
played a role in the employer's decision, or
that the program may be designed to remove
older workers from the labor force. The
preemptive waiver of rights occurs before a
dispute has arisen and indeed before an
employee is even aware of any potential or
actual pattern of discrimination. Such a
pre-emptive waiver may also preclude the
employee from asserting claims that arise out
of subsequent discriminatory conduct by the
employer, e.g. hiring younger workers to
replace the terminated older workers. These
waivers are both unfair and inconsistent with
the intent of the ADEA.

S. Rep. No. 79, 101st Cong., 1st Sess. 9 (1989).8 The Report

emphasized the need for protective legislation, noting that:
Age discrimination victims typically earn more than the
minimum wage, but their average annual income
is only $15,000. Moreover, once out of work,
these older Americans have less than a 50/50
chance of ever finding new employment.
The[y] often have little or no savings, and
may not yet be eligible for Social Security.
Accordingly, it is reasonable to assume that
many employees would be coerced by

8. This language was adopted by reference in S. Rep. No.
263, 101st Cong. 2d Sess. 15 (1990).

11
 circumstances into accepting significant
compromises. This is especially true where
employees are unable even to recognize the
potential of their claims because no dispute
exists between them and their employer.

Id. In an effort to protect older workers, Title II of the OWBPA

defined those circumstances in which ADEA waivers would be

permitted.

Prior to the OWBPA, the general approach of the courts

was to find waivers permissible subject to a requirement that

they be made "knowingly" and "willfully." "Under the [OWBPA,]

waivers must [still] be made knowingly and voluntarily. However,

they cannot be deemed to be so unless several statutory minima

are met." Pellicciotti, Older Workers Benefit Protection Act of

1990: Congress Responds to Betts Decision, 35 Res Gestae 114,

115 (1991). These minimum requirements are set forth at 29

U.S.C. § 626(f):
(1) An individual may not waive any right or claim
under this chapter unless the waiver is knowing and
voluntary. . . . [A] waiver may not be considered
knowing and voluntary unless at a minimum --

(A) the waiver is part of an agreement between the
individual and the employer that is written in a manner
calculated to be understood by such individual . . .

(B) the waiver specifically refers to rights or claims
arising under this chapter;

(C) the individual does not waive rights or claims that
arise after the date the waiver is executed;

(D) the individual waives rights or claims only in
exchange for consideration in addition to anything of
value to which the individual already is entitled;

(E) the individual is advised in writing to consult
with an attorney prior to executing the agreement;

(F) . . . (ii) if a waiver is requested in connection
with an exit incentive or other employment termination

12
 program offered to a group or class of employees, the
individual is given . . . at least 45 days within which
to consider the agreement;

(G) the agreement provides that for a period of at
least 7 days following the execution of such agreement,
the individual may revoke the agreement;

(H) if a waiver is requested in connection with an . .
. employment termination program . . . the employer . .
. notifies the individual in writing in a manner
calculated to be understood . . . as to --

(i) any class, unit or group of individuals covered by
such program, any eligibility factors for such program,
and any time limits applicable . . .; and

(ii) the job titles and ages of all individuals
eligible or selected for the program, and the ages of
all individuals in the same job classification or
organizational unit who are not eligible or selected.
. . .

The statute also specifies that the party asserting the validity

of the waiver bears the burden of showing that the waiver was

indeed knowing and voluntary. 29 U.S.C. § 626(f)(4).

While Congress carefully defined what must be included

in a knowing and voluntary waiver under the ADEA, it did not

characterize the legal effect of a release which fails to satisfy

the statutory requirements. Courts asked to determine whether

deficient waivers should be enforced have purported to rely on

"clear" congressional intent. They have reached different

conclusions, however, with respect to whether Congress intended

that waivers deficient under the OWBPA be declared void or merely

voidable.

IV.

13
 The view that deficient releases are void was adopted

by the Court of Appeals for the Seventh Circuit in Oberg v.

Allied Van Lines, Inc., 11 F.3d 679 (7th Cir. 1993).9 The court

in Oberg held that releases which fail to conform to the OWBPA

have no legal significance; they cannot be ratified or enforced.10

Relying on OWBPA language that "[a]n individual may not waive

any right or claim . . . unless the waiver is knowing and

voluntary," the court concluded that, "unless a waiver contract

takes the form required by the statute, an employer and an

employee cannot contract to waive the ADEA provisions. . . . No

matter how many times parties may try to ratify such a contract,

the language of the OWBPA . . . forbids any waiver." Id. at 682.

9. On January 9, 1997, the Court of Appeals for the Sixth
Circuit issued its decision in Raczak v. Ameritech Corp., No. 95-
1082, 1997 WL 5921 (6th Cir. Jan. 9, 1997). Two panel members,
on divergent grounds, agreed that the plaintiffs were not
precluded from pursuing an action under the ADEA despite having
executed waivers deficient under the OWBPA and retained payments
made pursuant to these waivers. One of these panel members
adopted the ratification analysis set forth in Oberg while the
other concurred in the result only, concluding that "there was
not a total failure of consideration when the ADEA claim was
instituted without plaintiffs tendering back benefits received .
. ." and "reserv[ing] judgment as to whether a release limited to
ADEA claims would require a different result." Id. at *15. The
remaining panel member adopted an analysis similar to that
undertaken by the district court in this case.

This decision, fractured though it is, means that the
appellate courts, prior to our opinion, are evenly divided on the
issue of tender back.

10. The common law doctrine of ratification results in the
enforcement of "a promise to perform all or part of an antecedent
contract of the promisor, previously voidable by him, but not
avoided prior to the making of the promise." Restatement
(Second) of Contracts § 85 (1981). Promises that are void cannot
be ratified. Void promises are not legally binding, have no
legal effect and, therefore, are not contracts. Id. § 7 cmt. a.

14
 In light of the OWBPA's unambiguous statutory prohibition

against waiver where one or more of the statutory requirements

are absent, the court concluded that further analysis was

unwarranted:
When the plain text of a statute is clear then "courts
must presume that a legislature says in a
statute what it means and means in a statute
what it says. When the words of a statute
are unambiguous then, this first canon is
also the last: `judicial inquiry is
complete.'" Connecticut Nat. Bank. v.
Germain, 503 U.S. 249, 253-54 (1992).

Id. at 682 (citations omitted).

Having pronounced non-conforming releases void, the

court next considered whether an employee is required to tender

back severance benefits in order to maintain suit under the

ADEA.11 The court concluded that employees "were not required to

tender back their severance benefits before filing ADEA claims,

notwithstanding [the] previously executed waiver of all claims. .

. ." Id. at 684.

The Courts of Appeals for the Fourth and Fifth Circuits

have rejected the Oberg approach, holding instead that defective

waivers are merely voidable and are, therefore, subject to

ratification by an employee's retention of severance benefits.12

11. Because void releases cannot be ratified, the court did
not consider whether failure to tender back might amount to
ratification.

12. The Oberg analysis has been adopted by a majority of
district courts outside the Seventh, Fourth and Fifth Circuits.
See EEOC v. Sara Lee Corp., 923 F. Supp. 994 (W.D. Mich. 1995)
(no ratification; where waiver is deficient under the OWBPA,
employer and employee cannot contract to waive ADEA provisions);
Elliott v. United Technologies Corp., 94 CV 01577, slip op. (D.
Conn. March 24, 1995) (ratification at odds with plain language
of the OWBPA); Soliman v. Digital Equipment Corp., 869 F. Supp.

15
See Wamsley v. Champlin Refining and Chemicals, Inc., 11 F.3d 534

(5th Cir. 1993); and Blistein v. St. John's College, 74 F.3d 1459

(4

th Cir. 1996). In Wamsley the court wrote:
We do not interpret the language of section 626(f)(1)
[of the OWBPA] to mean that a waiver which
fails to meet the requirements of subsections
(A) through (H) is void of legal effect.
Rather, we interpret it to mean that such
waivers are not knowing and voluntary and
thus are subject to being avoided at the
election of the employee. . . .

Therefore, we hold that neither the language nor the
purpose of the OWBPA indicates a
congressional desire to deprive an employee
of the ability to ratify a waiver that fails
to meet the requirements of the OWBPA. When
[the employees] chose to retain and not
tender back to [the employer] the benefits
paid them in consideration for their promise
not to sue . . ., they manifested their
intention to be bound by the waivers and
thus, made a new promise to abide by their
terms.

(..continued)
65 (defective release cannot be ratified; tender back will chill
bringing of meritorious claims) (D, Mass, 1994); Raczak v.
Ameritech Corp., 1994 WL 78099 (E.D. Mich. 1994), rev'd in part,
No. 95-1082, 1997 WL 5921 (6th Cir. Jan. 9, 1997), (Oberg
approach better reasoned); Carr v. Armstrong Air Conditioning,
817 F. Supp. 54 (N.D. Ohio 1993) (plaintiff waived no rights
since severance agreement violated the OWBPA; tender requirement
not consistent with purposes of the ADEA); Pierce v. Atchison,
Topeka and Santa Fe Railway Co., 1993 WL 18437 (N.D. Ill. 1993)
(OWBPA requirements preclude waiver by ratification); Collins v.
Outboard Marine Corp., 808 F. Supp. 590, 594 (N.D. Ill. 1992)
(scope of defective release did not include claim under ADEA;
consideration received need not be returned since it was not paid
for relinquishment of ADEA claim); Issacs v. Caterpillar, Inc.,
765 F. Supp. 1359 (C.D. Ill. 1991) (ratification and tender-back
not applicable to releases deficient under the OWBPA). But see
Hodge v. New York College of Podiatric Medicine, 940 F. Supp. 579
(S.D.N.Y. 1996) (Oberg rejected; defective releases subject to
ratification); and Rivers v. Northwest Airlines, Inc., 71 Fair
Empl. Prac. Cas. (BNA) 1217 (E.D. Mo. 1995) (failure to tender
back benefits precluded ADEA claim even where release was
deficient under OWBPA).

16
Id. at 539-40. In part, the court's conclusions were drawn from

the legislative history of the OWBPA:
The legislative history indicates that the
fundamental purpose of the OWBPA waiver
provisions is to ensure that an older worker
who is asked to sign an ADEA waiver does so
in the absence of fraud, duress, coercion, or
mistake of material facts. S. Rep. No. 101-
263, 101st Cong., 2d Sess. (1990). . . . The
circumstances against which these provisions
were designed to protect are the same
circumstances that have traditionally given
rise to grounds upon which a party can avoid
contractual obligations. That the Committee
enumerated several of the traditional grounds
of avoidance is significant. Also
significant is the absence of any language in
the statute and any statement in the
legislative history indicating that a waiver
executed in contravention of the OWBPA
requirements is void . . . and cannot be
ratified. . . .

Id. The court also cited section 626(f)(1)(G) of the Act which

provides that an employee may revoke a waiver for any reason

within seven days of its execution and that the agreement is not

enforceable during that seven-day period. "If non-compliance

with the other subparts of section 626(f)(1) rendered the

agreement void, there would be no need for subpart (G)." Id. at

539. According to the court, declaring defective waivers void:
would be inconsistent with one of the expressed
purposes of the ADEA: "to help employers and
workers find ways of meeting problems arising
from the impact of age on employment." 29
U.S.C. § 621(b). The simplest and easiest
way to further this purpose is to give effect
to private agreements which resolve age-
related employment problems without the
inevitable delays and costs associated with
litigation.

Id.

17
 Finally, the court held that "justice and equity

require the employee who seeks to avoid the obligations to which

he agreed under the settlement agreement to return the

consideration which he received for his promise not to sue." Id.

at 542.

While the district court in the case before us adopted

the reasoning underlying the decision in Wamsley, on balance we

find the Oberg approach to tender back to be more consistent with

the purposes underlying the OWBPA.

18
 V.

While we, like the court in Oberg, reject the argument

that Long is precluded from maintaining an ADEA claim because he

retained severance benefits, we reach this end via a different

route. In both Oberg and Wamsley the courts focused first upon

whether a defective release should be characterized as void or

voidable. It was only after this question was resolved that the

courts considered the import of the plaintiff's failure to return

severance benefits. In Wamsley, the court concluded that the

allegedly defective release was voidable. The plaintiff's

retention of benefits served to ratify the defective release and,

therefore, suit was barred. The court in Oberg reasoned that

defective releases were void and that ratification could not

apply. The court found it necessary, however, to address the

issue of retention of severance benefits in that tender back of

benefits has been viewed by some courts as a prerequisite to

suit. The court in Oberg relied on Supreme Court precedent and

other policy arguments to hold that tender back should not be a

prerequisite to an ADEA suit where the release at issue is

defective under the OWBPA.

Although the analysis in Oberg and Wamsley might

suggest otherwise, resolution of the void/voidable issue does not

control our disposition of this appeal. No matter how we

characterize a release which fails to comply with the OWBPA -

void or voidable -- we must, under either theory, decide whether

Long's retention of severance benefits should prevent him from

pursuing his ADEA claim. Because we conclude that neither

19
ratification nor tender back was meant to apply in the ADEA

context, we need not address the void/voidable distinction.13

The court in Oberg declared that releases which fail to

conform to the OWBPA are void and, consequently, found it

unnecessary to consider the ratification doctrine. Our analysis,

however, requires that we consider its application. The language

of the OWBPA and its legislative history convince us Congress did

not intend that the ratification doctrine be invoked to enforce

the terms of a deficient release.

Prior to the OWBPA, it was generally recognized that

employees could waive federal ADEA rights in private settlements

with their employees so long as the employees' consent to the

settlement was knowing and voluntary. Even during this pre-OWBPA

period, however, there was disagreement over the standard to be

applied in assessing whether a waiver was, in fact, knowing and

voluntary. The Courts of Appeals for the Fourth, Sixth and

Eighth Circuits held that ordinary state contract law principles

controlled.14

13. Indeed, to resolve that question here is premature.
The district court has yet to determine whether the release at
issue is, in fact, defective under the OWBPA. While this case
does not turn upon whether an allegedly defective release is void
or voidable, we recognize that it might be necessary to reach
this question under a different set of facts. For example,
holding a release of ADEA claims void could have implications for
non-ADEA claims also covered by the release.

14. See, e.g., O'Shea v. Commercial Credit Corp., 930 F.2d
358, 362 (4th Cir.), cert. denied, 502 U.S. 859 (1991); Lancaster
v. Buerkle Buick Honda Co., 809 F.2d 539 (8th Cir.), cert.
denied, 482 U.S. 928 (1987); and Runyan v. National Cash Register
Co., 787 F.2d 1039, 1045 (6th Cir. 1986) (en banc).

20
 We, however, elected to apply a more stringent federal

"totality of the circumstances test," reasoning that "in

recognition of the important interests involved . . . careful

evaluation of the release form itself as well as the complete

circumstances in which it was executed [is] warranted." Cirillo

v. Arco Chemical Co., 862 F.2d 448, 450 (3d Cir. 1988).15 Factors

relevant in assessing the totality of the circumstances included,

but were not limited to, the following:
(1) the clarity and specificity of the release
language; (2) the plaintiff's education and
business experience; (3) the amount of time
plaintiff had for deliberation about the
release before signing it; (4) whether
plaintiff knew or should have known his
rights upon execution of the release; (5)
whether plaintiff was encouraged to seek, or
in fact received benefit of counsel; (6)
whether there was an opportunity for
negotiation of the terms of the Agreement;
and (7) whether the consideration given in
exchange for the waiver and accepted by the
employee exceed[ed] the benefits to which the
employee was already entitled by contract or
law.

Id. at 451.

In enacting the OWBPA, Congress resolved this dispute

regarding the standard to be applied in determining whether a

15. The totality of the circumstances test was also adopted
by the Court of Appeals for the Fifth Circuit in O'Hare v. Global
Natural Resources, Inc., 898 F.2d 1015, 1017 (5th Cir. 1990); and
by the Court of Appeals for the Second Circuit in Bormann v. AT&T
Communications, Inc., 875 F.2d 399, 403 (2d Cir. 1989).

It is significant that even prior to enactment of the
OWBPA, we concluded that ordinary contract principles were not
sufficient to vindicate the protective purpose of the ADEA.
Cirillo, 862 F.2d at 450. It is difficult, therefore, to
understand the dissent's "urging" that we retreat to traditional
common law principles in order to decide this case.

21
release is "knowing and voluntary." Congress rejected the

applicability of common law contract principles and declined to

embrace even the more demanding "totality of the circumstances"

test:
Even the decisions that have followed the more
protective "totality of the circumstances"
approach . . . have not held that certain
protective factors must be present . . . .
The [OWBPA], by contrast, will limit
unsupervised waivers to certain situations
and then spell out clear and ascertainable
standards to govern those situations.

S. Rep. No. 79, 101st Cong., 1st Sess. 17 (1989) (emphasis

added).

The requirements established in order for releases to

be "knowing and voluntary" under the OWBPA clearly exceed the

protections available under the common law. The right to seek

counsel, the 45-day consideration period, the seven-day right of

revocation, and the provision of detailed information about those

affected by group terminations are all protections which were

unavailable under the "knowing and voluntary" standard of the

common law. In addition, the OWBPA establishes that waivers must

be in writing, must specifically refer to rights under the ADEA,

and are subject to "an average person" standard; whether a

particular plaintiff understood the implications of the release

is irrelevant. The OWBPA also effected a shift in the burden of

proof applicable in judicial proceedings. Where, under the

common law, the employee challenging a waiver was required to

show that the waiver was not "knowing and voluntary," the OWBPA

shifts this burden to the employer. See 29 U.S.C. § 626(f)(3).

22
These requirements, too, overrode pre-OWBPA decisions applying

common law principles.16 Most importantly, Congress, after

grappling with the question of whether to permit ADEA waivers at

all, stated unequivocally that unless the enumerated requirements

are met, an individual "may not waive" ADEA rights. 29 U.S.C. §

626(f)(1) (emphasis added).

We are convinced that in enacting the OWBPA, Congress

intended to occupy the area of ADEA releases and, in doing so, to

supplant the common law; the OWBPA was enacted to "establish[] a

floor, not a ceiling." Soliman v. Digital Equipment, 869 F.

Supp. 65, 68 n.12 (D. Mass. 1994). Enforceability of a waiver is

made contingent upon the presence of certain enumerated factors.

Given the clear and specific goals of the OWBPA, we

cannot accept that Congress intended that the common law doctrine

of ratification be applied to releases invalid under the OWBPA.17

16. See Taylor v. Gordon Flesch Co., 793 F.2d 858, 862 (7th
Cir. 1986) (oral waivers enforceable); Runyan v. National Cash
Register Corp., 787 F.2d 1039 (6th Cir. 1986) (en banc), 479 U.S.
850 (1986) (if plaintiff understood release, whether anyone else
would have understood it was not controlling); Lancaster v.
Buerkle Buick Honda Co., 809 F.2d 539 (8th Cir. 1987) (release
enforced despite failure to refer to ADEA); and Harrison v.
Arlington Ind. School Dist., 717 F. Supp. 453, 455 (N.D. Tex.),
aff'd without op., 891 F.2d 904 (5th Cir. 1989) (under common
law, employee challenging waiver on "knowing and voluntary"
grounds carried burden of proof).

17. It is significant that neither the text of the OWBPA
nor its legislative history discusses ratification as a bar to
suit; there is no mention of the ratification doctrine or
reference to caselaw invoking that doctrine. In fact, at the
time of the OWBPA's enactment, not a single court of appeals had
held that a waiver which was not knowing and voluntary could,
nonetheless, be enforced pursuant to a ratification theory. Many
courts, however, including ours, had resolved waiver questions
without reference to the doctrine. See O'Hare v. Global Natural
Resources, Inc., 898 F.2d 1015, 1017 (5th Cir. 1990); Bormann v.
AT&T Communications, Inc., 875 F.2d 399, 403 (2d Cir. 1989);

23
 The common law fiction of a "new promise" forged from retention

of benefits has no place in this statutory scheme.18 To conclude

otherwise would be to say that Congress only intended that the

OWBPA requirements apply to the "first" waiver. Such a result is

inconsistent with the aims of the Act and works a hardship on

(..continued)
Cirillo v. Arco Chem. Co., 862 F.2d 448, 451-55 (3d Cir. 1988);
Coventry v. United States Steel Corp., 856 F.2d 514, 523 (3d Cir.
1988); Lancaster v. Buerkle Buick Honda Co., 809 F.2d 539, 541
(8th Cir. 1987); Runyan v. National Cash Register Corp., 787 F.2d
1039, 1044 (6th Cir. 1986) (en banc). Several of these cases are
cited in the OWBPA's legislative history. See H.R. Rep. No. 664,
101st Cong., 2d Sess. 26-27 (1990). Furthermore, we believe that
it would be wrong to conclude, as does the dissent, that simply
because ratification is not rejected in the text or legislative
history of the OWBPA that the common law is unchanged. The Act
establishes that validity and enforceability are inextricably
linked; adherence to the terms of the Act is fundamental to
enforcement. The critical point is not that the Act fails
specifically to do away with ratification. It is instead that
the ratification doctrine is logically inconsistent with the
specific terms of the OWBPA.

18. We are not persuaded by the dissent's argument that
"the policy of the OWBPA requires that an employee should be able
to ratify a defective release" (Typescript at 4), nor do we
believe that the dissent's "dramatic" example purporting to
illustrate this conclusion is apposite. The OWBPA was written to
govern waivers of the right to file a claim. This "pre-emptive
waiver of rights occurs before a dispute has arisen and indeed
before an employee is even aware of any potential or actual
pattern of discrimination." S. Rep. No. 79, 101st Cong., 1st
Sess. 9 (1989). We certainly have not suggested, nor, as far as
we know, is there any authority for the proposition that the
OWBPA might apply to the terms of a settlement agreement forged
after the taking of evidence in a civil trial.

In any event, it is a given that even well-designed
remedial legislation may result in unintended consequences.
Suffice it to say that we are not aware, nor was counsel for the
EEOC when questioned at oral argument, of any case where an
employer has sought to avoid its obligations under a severance
agreement by invoking its own failure to comply with the OWBPA.
That case, should it ever arise, is a matter for a different day;
we need not decide this case on the basis of what might happen in
a hypothetical case which might come before us at some point in
the future.

24
employees who could not have known that by retaining severance

pay they were, in effect, declining the protection of the OWBPA.

This conclusion applies as well to the common law concept of

tender back of benefits as a pre-requisite to suit under the

ADEA.19

Although our rejection of the ratification and tender

back theories could rest alone on the language and legislative

history of the OWBPA, we find additional support for our position

in Supreme Court precedent and the caselaw interpreting that

precedent.

VI.

In the leading case rejecting a tender back requirement

under the ADEA, Oberg, the Court of Appeals for the Seventh

Circuit rejected the employer's argument that "Plaintiffs must

tender back the consideration received for executing . . .

19. "States that require a tender to challenge a release
sometimes use the language `condition precedent to suit' and
sometimes use the language of `ratification.' But there is no
meaningful difference between the two." Issacs v. Caterpillar,
Inc., 765 F. Supp. 1359, 1372 (C.D. Ill. 1991).

In any event, the legislative history indicates that
Congress was aware of the benefit retention issue and chose not
to include in the OWBPA a proviso prohibiting this retention.
The minority members of the Committee on Education and Labor
referred to a letter from IBM which mentioned the possibility
that former employees might retain benefits while pursuing an
ADEA claim. H.R. Rep. No. 664 at 81 proposed a substitute bill
containing the following provision: "If a waiver is set aside
for any reason, any damages received through a discrimination
action shall be offset by the consideration received for the
waiver." Id. at 200. This proposal did not mention ratification
or tender back but was a moderate response to the possibility of
retention of benefits. It was, nonetheless, rejected. Id. at
29.

25
Severance Agreements" in order to maintain a claim under the

ADEA. 11 F.3d 679, 683. Recognizing that the requirement might

initially seem "appealing under common law notions of fairness,"

the court nonetheless held that the Supreme Court's decision in

Hogue v. Southern R. Co., 390 U.S. 516 (1968), compelled a

different result. Id.20

In Hogue, a brief per curiam opinion, the Supreme Court

considered the tender back requirement in a case arising under

the Federal Employer's Liability Act ("FELA"), 45 U.S.C. § 51 et

seq. (1939). Stating that the tender back question was to be

resolved under federal rather than state law, the Court concluded

that requiring a refund would be "wholly incongruous with the

general policy of the [FELA]." Id. at 517 (citation omitted).

The court in Oberg summarized the Hogue decision as follows:
In Hogue, the Court rejected any notion that state
common law principles could help resolve the
tender back question in FELA cases. The
Court stated that "[t]he question whether a
tender back of the consideration was a
prerequisite to the bringing of the suit is
to be determined by federal rather than state
law." The Court went on to hold that an
employee, who previously executed an employer
release, need not, as a precondition to
bringing suit under FELA tender back to his
employer any of the consideration he received
for executing the release. The Court did,
however, state that the benefits paid should
be deducted from any award to the employee.

20. The dissent argues that the holding in Oberg was
undermined by the decision in Fleming v. United States Postal
Service AMF O'Hare, 27 F.3d 259 (7th Cir. 1994). In Fleming the
court of appeals refused to extend the reasoning of Hogue to a
Title VII case, limiting Hogue to the "context of a federal
statute that regulates releases, displacing common law rules."
Id. at 261-62. The OWBPA is precisely such a statute.

26
Id. at 683-84 (citations omitted). The Court in Oberg was

"convinced that . . . analogizing the policy of [the] ADEA to

that of [the] FELA, and thus applying Hogue, [was] correct." Id.

at 684. We agree, based on a number of factors.

A.

First, we note that courts have regularly applied the

analysis in Hogue to reject tender requirements in lawsuits

brought under a variety of federal remedial statutes.21 It is

impossible to view the ADEA as anything other than a federal

remedial statute. The ADEA was enacted in order to further the

dual goals of compensating discrimination victims and deterring

employers from practicing discrimination. As the Supreme Court

wrote in McKennon v. Nashville Banner Publishing Co., 115 S. Ct

879, 884 (1995): "The private litigant who seeks redress for his

or her injuries vindicates both the deterrence and compensation

21. See Botefur v. City of Eagle Point, 7 F.3d 152, 156
(9th Cir. 1993) (Hogue generalizable to other federal
compensatory statutes including Title VII); Home Box Office, Inc.
v. Spectrum Electronics, Inc., 100 F.R.D. 379, 382 n.1 (E.D. Pa.
1991) (not citing Hogue but holding that under antitrust law
benefits available under federal law cannot be defeated by state
common law rules; no ratification where plaintiffs failed to
tender back); Washner v. American Motors Sales Corp., 597 F.
Supp. 991 (E.D. Pa. 1984) (not citing Hogue but finding
Pennsylvania law with respect to ratification releases
incongruous with Automobile Dealers' Day in Court Act where Act
was intended to provide redress for the very activity alleged;
amount retained was to be set off against any damages); Smith v.
Pinell, 597 F.2d 994, 996 (5th Cir. 1979) (plaintiff allowed to
proceed under Jones Act despite having signed release and
received settlement; Jones Act analogized to FELA); Taxin v. Food
Fair Stores, Inc., 287 F.2d 448 (3d Cir. 1961) (cases regarding
necessity for tender are in hopeless confusion; in case involving
Sherman Act, plaintiffs not required to tender back consideration
received for release).

27
objectives of the ADEA." In light of this clear recognition of

the purpose of the ADEA, we are confident that the tender back

rule rejected in suits under the FELA should be rejected in suits

under the ADEA as well.22 Imposing a tender back rule in the ADEA

context would almost certainly compromise the purposes underlying

that statute. The concerns expressed by our sister court in the

pre-OWBPA case of Forbus v. Sears Roebuck & Company, 958 F.2d

1036, 1041 (11th Cir. 1992), apply with equal force here:

22. In reaching this conclusion, we are mindful of the fact
that other courts have rejected Hogue's applicability to ADEA
releases. In Wamsley, for example, the court of appeals wrote:

[Hogue] is founded on the recognition that a "tender
back" requirement would be "wholly
incongruous" with the right of recovery
provided under the FELA and inconsistent with
the objectives of the act. The right of
recovery under the FELA, however, is unique
in that it advances a congressional intention
of facilitating recovery by injured railroad
workers against their employers.

11 F.3d 534, 540. The Court concluded that by eliminating the
tender requirement in connection with FELA releases, "Congress
advanced the FELA's purpose of providing liberal recovery to
injured rail workers . . . . No such purposes underlie the
ADEA." Id. at 542.

There is no question that the FELA and ADEA are not
identical in purpose. Nor, in our view, need they be in order
for the rule in Hogue to apply. The mandate of Hogue is that
tender back requirements imposed in connection with the release
of federal rights be evaluated in light of the general policy of
the statute in question. That the ADEA as amended by the OWBPA
serves a purpose distinct from that underlying the FELA does not
change the fact that a tender back requirement is "wholly
incongruous" with the general policies of the ADEA and the OWBPA.
In enacting the OWBPA, Congress specifically regulated ADEA
releases in order to provide employees with protection not
available at common law. To strip them of this protection
through application of the common law principle of tender back
would be anomalous indeed. "When federal law limits a class of
releases, . . . the common law requiring tender . . . may have to
give way." Fleming v. U.S. Postal Service, 27 F.3d 259, 260 (7th
Cir. 1994).

28
The Court in Hogue found that a tender requirement
would deter meritorious challenges to
releases in FELA lawsuits. The same
deterrence factor applies to ADEA claims.
Forcing older employees to tender back their
severance benefits in order to attempt to
regain their jobs would have a crippling
effect [sic] on the ability of such employees
to challenge releases obtained by
misrepresentation or duress. Such a rule
would . . . encourage egregious behavior on
the part of employers in forcing certain
employees into early retirement for the
economic benefit of the company. The ADEA
was specifically designed to prevent such
conduct, and we reject a tender requirement
as a prerequisite to instituting a challenge
to a release in an ADEA case.

29
 B.

Second, any doubt about whether Hogue's rejection of

the tender back rule should apply to ADEA claims was resolved

with the enactment of the OWBPA. The very specific requirements

of this Act, considered against the background of its legislative

history, demonstrate that Congress intended to provide

protections unavailable at common law; congressional focus

extended beyond ensuring that ADEA releases were untainted by

fraud, duress, or some other defect recognized at common law.23

Congress explicitly stated that it intended to protect employees

who might waive rights under the ADEA before they were "even

aware of any potential or actual pattern of discrimination."

H.R. Rep. No. 664 at 23. See also S. Rep. No. 263, 101st Cong.

2d Sess. 32 (1990) (recognizing "need for adequate information

before waivers are signed."). Imposing a tender requirement

where a release is defective under the OWBPA would effectively

eviscerate that act.

23. The Court of Appeals for the Fifth Circuit in Wamsley,
11 F.3d at 1539, rested its conclusion that common law contract
principles should apply to ADEA releases on one portion of the
OWBPA's legislative history which provides that the primary
purpose underlying the OWBPA was to ensure that workers executing
ADEA waivers do so "in the absence of fraud, duress, coercion, or
mistake of material facts. S. Rep. No. 263, 101st Cong., 2d
Sess. (1990), reprinted in 1990 U.S.C.C.A.N. 1509, 1539." The
court reasoned that these concerns were the same as those "that
have traditionally given rise to grounds upon which a party can
avoid contractual obligations." Id. The court's reliance on
this single statement fails to take into account the fact that
both the provisions of the statute and other statements in the
legislative history clearly establish that Congress rejected and
intended to move beyond application of common law principles.

30
 Through the OWBPA Congress sought to insure that

employees faced with deciding whether to sign an ADEA waiver and

forego an ADEA claim be provided with sufficient information to

allow them to evaluate the merits of that claim. Applying a

ratification-tender back rule would require employees in Long's

position, who arguably did not receive the required information,

to make a similarly uninformed choice. These employees would be

forced by the ratification and tender back doctrines to decide,

in the continued absence of information, whether to surrender

severance pay or waive all claims under the OWBPA. Employees

whose releases are defective under the OWBPA would be no better

off than before the OWBPA was enacted; they could be forced to

make critical decisions without information deemed essential by

Congress.

The choice which the Wamsley approach, adopted by the

district court, places before older employees amounts to no

choice at all: pursue your claim at the risk of your livelihood.

Testimony before Congress established that older workers facing

termination "could not afford" to do without separation benefits.

Age Discrimination in Employment Waiver Protection Act of 1989:

Hearing on 5.54 Before the Subcomm. on Labor of the Senate Comm.

on Labor and Human Resources, 101st Cong., 1st Sess. 61 (1989)

(Testimony of Robert Patterson). Other excerpts from the OWBPA's

legislative history emphasize the economic plight of older

workers and Congress' intention to better equip them to make

choices directly affecting their rights and livelihood. Applying

31
ratification or a tender back requirement in the circumstances

presented here would mean that:
[n]o matter how egregiously releases might violate the
requirements of the [OWBPA], employees would
be precluded from challenging them unless
they somehow . . . come up with the money
they were given when allegedly forced into
retirement.

Issacs v. Caterpillar, Inc., 765 F. Supp. 1359, 1367 (C.D. Ill.

1991).

Courts which have applied tender-ratification

principles to ADEA releases which fail to conform to the OWBPA

have rendered the OWBPA meaningless. The gist of these holdings

is, as Long argues, "to uphold flawed ADEA releases [to] block

discrimination claims [rather] than . . . require employers to

comply fully with federal law." (Long br. at 38).

C.

Application of the tender-ratification doctrines and

rejection of Hogue stem, we believe, from an incomplete analysis

of the equities involved in allowing an employee to retain

severance benefits while pursuing ADEA claims. The court in

Wamsley expressed concern that were ratification and tender back

held not to apply, employers would face "continued litigation

with opponents who could use, and very possibly already have

used, to finance their suit, the very funds paid as consideration

to avoid litigation." 11 F.2d at 539. Amicus, Equal Employment

Advisory Council,24 frames the concern even more starkly, warning

24. The Equal Employment Advisory Council, in an amicus
brief filed on behalf of Sears, identifies itself as an

32
that abrogation of the tender-ratification doctrines, "improperly

encourages nefarious plaintiffs to secure the benefits awarded

for signing a release and then press for more gains through a

legal challenge." (Br. at 7). While this argument, although

stated in extreme terms, is not without merit, it misperceives

the economic reality for many older workers. The congressional

assumptions underlying the OWBPA posit that most covered

employees need severance benefits to fund living rather than

legal expenses. Employees with baseless claims have strong

financial incentives to keep severance payments rather than risk

them in prolonged litigation.

Neither will rejecting ratification and tender back

principles mean that employees will receive a "double recovery"

by first accepting a severance payment and later winning a

judgment. An employer found liable will be entitled to a set-off

of any severance benefits paid. Oberg, 11 F.3d at 684. In any

event, the windfall argument cuts two ways. Presumably,

employers offer severance packages, in part, in exchange for the

employees' release of claims. Where an employee must tender

severance benefits prior to suit, it is very difficult to return

that employee to his pre-release position. He is not restored to

employment, the employer may still assert the release as an

affirmative defense, and there is no guarantee that the employee

will receive the information to which he was entitled under the
(..continued)
organization comprised of nearly 300 major U.S. corporations and
several industry associations. The organization exists "to
promote sound approaches to the elimination of employment
discrimination."

33
OWBPA. "Such an exchange would arguably unjustly enrich the

employer." Issacs, 765 F. Supp. 1367.

The equities associated with applying the logic of

Hogue to eliminate the tender-ratification rule in the ADEA

context are at least in equipoise. In this circumstance, we will

give effect to what we believe Congress intended: the OWBPA was

designed to protect employees negotiating with employers, not to

protect employers from overreaching plaintiffs. Employers are,

by far, in a better position to protect their own interests than

are older employees. Employers should not need the ratification

doctrine in order to ensure that their releases are effective;

they need to comply with the OWBPA. Most OWBPA requirements are

clear and specific, and, once these requirements are met, waivers

executed by employees will be valid and enforceable. If prodded

by necessity into following the mandates of the OWBPA, employers

will have purchased a valid affirmative defense against suit.25

D.

A final factor favoring Hogue's rejection of a tender

back rule in the ADEA context is practicality. "[I]mposing a

25. We are not swayed by the argument that rejection of the
tender-ratification theory will discourage employers from
offering severance packages and will encourage plaintiffs and
their counsel knowingly to sign releases that do not comply with
the OWBPA in order to receive benefits to which they are not
entitled even though they have no intention of honoring the
release agreement. The ratification-tender theory has been
applied only by Courts of Appeals in the Fourth and Fifth
circuits. There is no empirical evidence to show that in other
areas of the country severance plans are offered less often or
that there is a greater volume of litigation turning on allegedly
inadequate ADEA releases.

34
`tender' requirement for challenges to ADEA releases would

frequently create insoluble practical problems." Issacs, 765 F.

Supp. 1367.
A tender requirement in such cases would ... create a
conundrum as to how much [consideration]
should be tendered to restore the pre-release
status quo. There is no available method of
forcing the parties to agree on what an
appropriate amount would be, since typically
the employer does not specify how much of the
consideration paid to the employee is for the
retirement and how much is for the release.

Id. at 1368.26

To require tender of the full amount of a severance

payment would force an employee to return a sum that typically

incorporates consideration for multiple factors not challenged in

an age case: waivers for other violations of law or contract,

rolled-in vacation and sick time, and a public relations benefit

to the employer that itself may deter other litigation.27 This

26. Another practical problem identified by the district
court in Issacs is the fact that "ordinary contract principles"
governing tender back are not uniform:

Some states impose no tender requirement for law suits
that challenge releases. Some state impose
[a] tender requirement for certain kinds of
challenges to releases, but not for others,
becoming enmeshed in the technicalities of
"void" versus "voidable" contracts. Some
states impose universal tender requirements.
Some states cannot make up their minds from
decision to decision.

765 F. Supp. at 1372. The court in Issacs concluded that, "[t]he
confusion . . . on this issue is reason enough for this Court to
decide this [question] not on the basis of state-law contract
doctrines, but -- as Hogue commands . . . on the simple basis of
what rule best serves the purposes of the ADEA." Id.

27. Our decision in DiBiase v. Smith Kline Beecham Corp.,
48 F.3d 719 (3d Cir.), cert. denied, 116 S. Ct. 306 (1995), does
not resolve this difficulty as that case did not address tender

35
approach "would appear to leave the employer better off and the

employee worse off than they were under the status quo." Id. at

1370. We are convinced that "[i]t would not serve the purposes

of the ADEA to impose a tender requirement that creates such

disputes and inequities." Id. at 1368.

E.

Having examined the language of the OWBPA, the purposes

underlying its enactment, and the caselaw bearing on its

application, we hold that where a release of ADEA claims fails to

comply with the provisions of the OWBPA, the common law doctrines

of ratification and tender back should not be applied to bar an

employee's ability to pursue claims under the ADEA.28 In light of
(..continued)
back or the effect of OWBPA section 26(f)(1)(D). We do not read
DiBiase to suggest that all severance pay received must be
allocated to ADEA claims for purposes of tender back.

28. Contrary to the position taken in the dissent, we do
not read our decision in McNemar v. The Disney Store, Inc., 91
F.3d 610 (3d Cir. 1996), petition for cert. filed Dec. 16, 1996,
as having any bearing on this case. In McNemar we held that a
plaintiff was precluded from pursuing a claim under the ADA based
on the fact that he had made assertions inconsistent with his
right to recover in proceedings before the Social Security
Administration and two state agencies. The dissent argues that
because "our ultimate conclusion . . . was that conduct which the
ADA never addressed barred McNemar's action. . . . Similarly,
the OWBPA does not set forth the controlling law in this case as
it does not address the ratification issue." (Typescript at 11).
The point seems to be that a plaintiff may be barred from
pursuing a claim by factors lying outside the statute pursuant to
which the claim is brought. We agree with McNemar's basic
premise. Nevertheless, McNemar is distinguishable from this case
both legally and factually. McNemar has nothing to do with what
Congress intended in enacting the OWBPA nor with the analysis of
those factors outside the statute which might bear on how the
OWBPA should be applied in a particular circumstance. We have
discussed these policy underpinnings at length and conclude that
the issues here have little in common with the invocation of
judicial estoppel in McNemar.

36
this holding, the district court's entry of summary judgment in

favor of Sears on claims brought pursuant to the ADEA was

erroneous. Accordingly, we will reverse that portion of the

order of the district court granting summary judgment in favor of

Sears with respect to the ADEA claims.

VII.

One final matter remains. Our rejection of the

void/voidable distinction in reaching this result has

implications for the non-ADEA claims asserted by Long. This case

has, from its inception, centered on the question of whether the

release, as a whole, was void or voidable. The parties have

consistently framed and briefed the issues in terms of this

distinction and, indeed, the district court rested its grant of

summary judgment as to all claims on its finding that the release

as a whole was voidable and had been ratified. Because Long

approached this case by arguing that the entire release --

including non-ADEA claims -- was void we believe that these non-

ADEA claims were adequately preserved for consideration on

appeal.

Our holding, confined as it is to ADEA releases invalid

under OWBPA, does not automatically dispose of the remainder of

Long's claims as might be the case if we had rested our decision

on the void/voidable distinction. Therefore, in order to ensure

that the parties have an opportunity to analyze the remaining

claims in terms of our holding and to present that analysis to

the district court, we will vacate the district court's entry of

37
summary judgment as to the non-ADEA claims and remand for further

consideration.

Long v. Sears Roebuck & Company, No. 96-1264

GREENBERG, Circuit Judge, dissenting.

The majority succinctly sets forth its primary

conclusion at the outset of the opinion: "the ratification

doctrine should not apply to a waiver of age discrimination

claims which is invalid under the OWBPA and [consequently] Long

should not be required to tender back severance benefits before

proceeding with his age discrimination claims." Typescript at 3.

The majority reaches this conclusion even though Long executed a

broad form of release and waiver of his claims for which Sears

38
paid Long over $39,000 which he retains. Consequently, the

majority reverses the district court's summary judgment in favor

of Sears on Long's ADEA claim. While the majority understandably

seeks to protect the rights of older workers in accordance with

the Older Workers Benefit Protection Act of 1990, 29 U.S.C. §

626(f), and surely Congress did intend to protect older workers

in that act, well-established principles of law lead me to a

different conclusion. Thus, I dissent with respect to Long's

ADEA claim. The majority vacates the summary judgment on Long's

non-ADEA claims, but I dissent on this aspect of the case as

well, as Long has not preserved his appeal with respect to these

claims.

The majority sets forth the first legal question to be

decided as follows: can an employee render a release enforceable

which fails to conform to the requirements of the OWBPA with

respect to ADEA claims by ratifying the agreement by acceptance

and retention of severance benefits? And next: if ratification

does not apply, does the employee's retention of severance

benefits operate nonetheless to prevent an employee from pursuing

a claim under the ADEA? Typescript at 9. After further

discussion, the majority compares Oberg v. Allied Van Lines,

Inc., 11 F.3d 679 (7th Cir. 1993), cert. denied, 114 S.Ct. 2104

(1994), with Wamsley v. Champlin Ref. and Chems., Inc., 11 F.3d

534 (5th Cir. 1993), cert. denied, 115 S.Ct. 1403 (1995), and

Blistein v. St. John's College, 74 F.3d 1459 (4th Cir. 1996). In

39
Oberg, the Court of Appeals for the Seventh Circuit held that

releases not conforming with the OWBPA are void and cannot be

ratified or enforced. On the other hand, the Courts of Appeals

for the Fifth and Fourth Circuits in Wamsley and Blistein held

that defective releases were voidable and that employees could

ratify them.29 Thus, while Oberg did not require an employee to

tender back the consideration paid for a release before bringing

an ADEA suit, Wamsley and Blistein reached the opposite result

and held that by retaining the consideration the employees

ratified the releases, thereby barring their ADEA actions.

The majority next rejects the methodology of both Oberg

and Wamsley (and thus Blistein, as well), though not the result

in Oberg as, unlike the Oberg and Wamsley courts, the majority

holds that it need not decide whether a release not conforming

with the OWBPA is void or voidable. Indeed, the majority also

rejects the approach of the parties to this appeal; Long explains

in his brief that the legal principle governing the

enforceability of his release depends on the answer to the

following question: "Is a release obtained in violation of OWBPA

and by fraud void or merely voidable?" Br. at 18-19. Sears

argues the case on the same basis, and the Equal Employment

29. I am aware that the OWBPA speaks of an "individual"
waiving rights and thus does not use the terms "employee" or
"release." As a matter of convenience I will use the terms
"employee" and "release," as Long was an employee and the terms
"waiver" and "release" have the same meaning in the context of
this case.

40
Opportunity Commission agrees that we must decide whether a

release not conforming with the OWBPA is void or voidable.

Instead, the majority finds that it need not determine

whether a release which does not conform to the OWBPA is void or

voidable because, without regard to the answer to that question,

"neither ratification nor tender back was meant to apply in the

ADEA context." Typescript at 20. It reaches that result because

the "language of the OWBPA and its legislative history convince

[it that] Congress did not intend that the ratification doctrine

be invoked to enforce the terms of a deficient release." Id.

After a discussion of the circumstances leading to the enactment

of the OWBPA, the majority indicates that:

Congress intended to occupy the area of ADEA releases

and, in doing so, to supplant the common law;

the OWBPA was enacted to 'establish[] a

floor, not a ceiling.' Enforceability of a

waiver is made contingent upon the presence

of certain enumerated factors. Given the

clear and specific goals of the OWBPA, we

cannot accept that Congress intended that the

common law doctrine of ratification be

applied to releases invalid under the OWBPA.

Id. at, 23-24 (citation omitted).

I respectfully state that we should not hold that the

"doctrine of ratification" cannot be applicable to a release

41
which is invalid under the OWBPA. Certainly nothing in the OWBPA

states that an employee cannot ratify an invalid release.

Rather, the act merely provides that an "individual may not waive

any right or claim under the [ADEA] unless the waiver is knowing

and voluntary." The act then provides minimum requirements for a

waiver to be knowing and voluntary.

Furthermore, the holding that an employee cannot ratify

an invalid release sometimes will lead to an outcome directly

contrary to the policy of the OWBPA to protect older workers. In

this case, of course, the employee, not the employer, is seeking

to avoid the settlement agreement. But, as the majority seems to

recognize, an employer also might seek to avoid its obligation to

pay severance benefits. Typescript at 24-25 n.18. It seems

clear that inasmuch as the OWBPA was enacted to protect

employees' rights, an employee should be able to ratify a

defective release and hold a recalcitrant employer to its

bargain.

I will demonstrate with a particular example why the

policy of the OWBPA requires that an employee should be able to

ratify a defective release. Under the OWBPA, a waiver of ADEA

rights and claims in a settlement of an action in court must

comply with certain of the minimum requirements of the OWBPA to

be knowing and voluntary. 29 U.S.C. § 626(f)(2). One of these

requirements is that the employee "is advised in writing to

42
consult with an attorney prior to executing the agreement." 29

U.S.C. § 626(f)(1)(E).

Consider the following situation. An employee

represented by experienced and competent counsel brings an ADEA

action. At trial, at the end of the presentation of evidence,

the parties settle the case on the record in open court with the

employee waiving his ADEA claims in return for the promise of a

cash payment. Subsequently, however, the employer reneges on the

settlement and refuses to make the payment, contending that the

settlement agreement cannot be enforced because the employee was

not "advised in writing to consult with an attorney prior to

executing the agreement." In my view, in these circumstances it

would be contrary to the intent of Congress in enacting the OWBPA

if a court refused to enforce the agreement on the employee's

motion, thus requiring the employee to try the case again.

Indeed, it would be amazing if a court reached that result, as

the settlement would have been enforceable if Congress had not

adopted the OWBPA. Thus, unless the settlement could be

enforced, the OWBPA would have the exact opposite effect to that

which Congress intended. The OWBPA would prejudice the employee.

Furthermore, a holding that the employee could not enforce the

settlement would not protect any legitimate interest of the

employer, as 29 U.S.C. § 626(f)(1)(E) was enacted for the benefit

of employees.

43
 The majority dismisses my example by indicating that

"[w]e certainly have not suggested, nor, as far as we know, is

there any authority for the proposition that the OWBPA might

apply to the terms of a settlement agreement forged after the

taking of evidence in a civil trial." Typescript at 24, n.18. I

am at a total loss to understand how the majority can make this

statement as the OWBPA provides that a "waiver in settlement of a

charge filed with the Equal Employment Opportunity Commission, or

an action filed in court by the individual or the individual's

representative, alleging age discrimination . . . may not be

considered knowing and voluntary unless at a minimum - (A)

subparagraphs (A) through (E) of paragraph (i) have been met."

29 U.S.C. § 626(f)(2) (emphasis added). I reiterate that

subparagraph (E) provides "the individual is advised in writing

to consult with an attorney prior to executing the agreement."

While the majority cites legislative history indicating

congressional concern with preemptive waiver of an employee's

rights before a dispute has arisen, the OWBPA as written simply

is not limited to such situations. The majority thus is

confining the application of the OWBPA in a way Congress did not.

I have given a dramatic example demonstrating that the

majority's holding that an employee cannot ratify a release

"invalid under the OWBPA" in some cases will frustrate the policy

of the OWBPA. Typescript at 23-24. Yet in other circumstances,

as well, employers might want to repudiate a release even though

44
delivered at an earlier stage of litigation or not given in

settlement of an action in court. In my view, the employer

should not be able to repudiate a release because of its own

failure to comply with the OWBPA. Nevertheless, unless an

employee can ratify a release which is invalid under the OWBPA,

the employer will be able to do exactly that.

Actually, notwithstanding its holding that a defective

release cannot be ratified, the majority will not foreclose the

possibility that an employee may ratify a defective release. The

majority does, after all, leave open the possibility that in some

other context, i.e., when it is in the employee's interest to

enforce a settlement, he or she may be able to do so for it

indicates that "[t]hat case, should it ever arise, is a matter

for a different day; we need not decide this case on the basis of

what might happen in a hypothetical case which might come before

us at some point in the future." Typescript at 25, n.18. While

I agree that we cannot decide cases not before us, yet, if the

majority is correct in holding that "neither ratification nor

tender back was meant to apply in the ADEA context" then the

outcome of the "hypothetical case" is preordained. Thus, the

majority is unwilling to accept the consequences of its own

holding. In my view, we should consider the consequences of a

holding with respect to future cases. After all, I thought that

we should avoid construing a statute to reach an absurd result.

45
See, e.g., Government of the Virgin Islands v. Berry, 604 F.2d

221, 225 (3d cir. 1979).

Accordingly, the issue in this case should not be

whether an employee can ratify a release not complying with the

OWBPA, but what conduct of the employee constitutes a

ratification of an invalid release? In particular, does the

employee's withholding of the consideration the employer paid for

a release ratify the release? Inasmuch as the OWBPA does not

indicate what conduct constitutes ratification, we must refer to

the common law for guidance on the point. After all, where else

can we look?

I realize that the majority indicates that the OWBPA

"supplant[s] the common law." Typescript at 23. But I cannot

understand how that can be true. The OWBPA provides that an

individual may not waive any right or claim under the ADEA except

by a knowing and voluntary waiver and sets forth "minimum"

requirements for a waiver to be knowing and voluntary. 29 U.S.C.

§ 626(f)(1). Conspicuously absent from the list are the basic

prerequisites to an agreement being knowing and voluntary, i.e.,

that the employee waiving the rights have at least a certain

level of mental competency and that the employee not sign the

waiver as a consequence of unlawful threats. Nevertheless, while

the OWBPA does not say so, there can be no doubt that if the

employer threatens the employee with bodily harm if the employee

46
does not sign the waiver, the waiver is not "knowing and

voluntary" and thus is not enforceable.

What then is the source of the requirements beyond

those enumerated in 29 U.S.C. § 626(f)(1) for a waiver to be

knowing and voluntary? I reiterate that there can be only one

source, the common law. Accordingly, I do not doubt that in

determining whether a waiver is knowing and voluntary, a court

should consider common law principles with respect to such

traditional factors relating to the validity of contracts as

competency and duress which are absent from the OWBPA.

Further, it is evident that the OWBPA could not have

supplanted the common law with respect to ADEA releases for still

another reason: the OWBPA does not even purport to occupy the

entire area regarding enforceability of ADEA releases. For

example, under 29 U.S.C. § 626(f)(1)(D), a knowing and voluntary

waiver must be "in exchange for consideration in addition to

anything of value to which the individual already is entitled."

The OWBPA, however, does not address the possibility of the

failure of consideration, i.e., the employer does not fulfill its

obligations under the agreement. Is the employee bound by the

release if the employer does not pay the consideration it

promised for the release?

As far as I am concerned, it is clear that the OWBPA

did not "supplant" the common law with respect to enforceability

of ADEA releases. Instead, it has supplemented the common law

47
and, in this case, as in other cases dealing with a federal

statute, we must develop a federal common law to accompany the

statute. See, e.g., Ryan v. Federal Express Corp., 78 F.3d 123,

126-27 (3d Cir. 1996); United States v. Alcan Aluminum Corp., 964

F.2d 252, 268 (3d Cir. 1992). Thus, in urging that we apply

federal common law in this case, I am suggesting nothing unusual.

Rather, I am proposing that we use our ordinary methodology in

applying a statute which does not address a problem which arises

under it.

Where does application of the common law lead us? The

answer is obvious. The Court of Appeals for the Seventh Circuit

in Fleming v. United States Postal Serv., 27 F.3d 259, 260-61

(7th Cir. 1994), cert. denied, 115 S.Ct. 741 (1995), pointed out

that it is "one of the most elementary principles of contract law

. . . that a party may not rescind a contract without returning

to the other party any consideration received under it. . . .

The principle that a release can be rescinded only upon a tender

of any consideration received . . . would surely be a component

of any federal common law of releases." Thus, in Fleming the

court held that an employee could not avoid a release settling

Title VII and Rehabilitation Act claims without tendering back

the consideration for the release. We should apply that settled

48
principle in this case and affirm the order for summary

judgment.30

Our treatment of an analogous issue in our recent

opinion in McNemar v. The Disney Store, Inc., 91 F.3d 610 (3d

Cir. 1996), petition for cert. filed Dec. 16, 1996, surely points

to the result we should reach here. In that case, McNemar, who

was HIV-positive, brought an action under the Americans with

Disabilities Act saying that Disney violated the ADA when it

discharged him. Of course, to recover McNemar had to show that

he was discharged because of his disability and that with or

without reasonable accommodations he could perform the essential

functions of the job.

In McNemar, we held that McNemar could not recover

because he had asserted to the Social Security Administration and

to two state agencies that he was totally disabled and unable to

work. Yet the ADA does not provide that a plaintiff, by making

such assertions, forfeits his or her right to recover under the

ADA. Nevertheless, through an application of judicial estoppel

we would not allow McNemar to pursue his ADA claims. Thus, even

though McNemar might have been able to demonstrate that he could

30. Long argues that the release is invalid as purporting to
"waive rights or claims that may arise after the date the waiver
is executed." 29 U.S.C. § 626(f)(1)(C). The majority does not
need to reach this point and does not do so. To affirm we would
have to reach this issue and I would do so and reject it.
However, in view of my dissenting position in this case, I have
no need to explain my reasoning on this point.

49
establish a cause of action under the ADA, we held that he had

deprived himself of that opportunity. Our ultimate conclusion,

therefore, was that conduct which the ADA never addressed barred

McNemar's action. While we could have said that we would look

solely to the ADA for the governing law with respect to McNemar's

right of recovery, as McNemar urged, and thus rejected Disney's

judicial estoppel arguments, we did not do so. Similarly, the

OWBPA simply does not set forth the controlling law in this case

as it does not address the ratification issue. In fact, Long's

position is weaker than McNemar's because the ADA far more

comprehensively regulates actions under it than the OWBPA governs

releases under the ADEA.

While I reach my conclusion as the result of

independent analysis, I point out that my conclusion accords with

the weight of appellate authority and not merely because Oberg is

one case and Wamsley and Blistein are two.31 Rather, it is also

for the reason that the Court of Appeals for the Seventh Circuit,

which decided Oberg, later questioned Oberg by diplomatically

describing its reasoning in that case as "a little obscure."

Fleming, 27 F.3d at 261. Thus, the court which supplies the only

31. The Court of Appeals for the Fifth Circuit adhered to
Wamsley in Blakeney v. Lomas Information Sys., Inc., 65 F.3d 482,
484-85 (5th Cir. 1995), cert. denied, 116 S.Ct. 1042 (1996). In
the recent case of Raczak v. Ameritech Corp., F.3d ,
1997 WL 5921 (6th Cir. Jan. 9, 1997), the panel was too fractured
in its approach to render a decision of much precedential value
on the ratification issue.

50
appellate support under the OWBPA for the majority's approach has

cast doubt on its own opinion. The Blistein court made this

point when it indicated that the Court of Appeals for the Seventh

Circuit itself, in Fleming, "questioned" Oberg. Blistein, 74

F.3d at 1466.

Hogue v. Southern R. Co., 390 U.S. 516, 88 S.Ct. 1150

(1968), a case involving a FELA settlement on which the majority

partially relies, is not controlling. Hogue was based on a

different statutory scheme and, as a footnote in Hogue makes

clear, the Supreme Court in part based its opinion on a statute

making agreements to exempt the employer from liability "void."

Id. at 518, 88 S.Ct. at 1152. In this case the majority does not

hold that a release not in conformity with the OWBPA is void.

Indeed, it does not reach that issue. I, of course, would hold

that the release is not void. Furthermore, the OWBPA, in its

terms, simply does not provide that a release not in conformity

with the OWBPA is "void." Thus, the OWBPA differs critically

from the FELA statute at issue in Hogue. Of course, as Oberg,

Wamsley, and Blistein make clear, void contracts cannot be

ratified. Thus, Hogue is distinguishable. Indeed, if the OWBPA

provided that releases not conforming with its terms are void, I

would not be dissenting with respect to the ADEA aspects of the

case. I, however, will not extend my discussion of Hogue, for

Wamsley discusses Hogue at length and demonstrates that it is not

51
controlling in the OWBPA context and I adopt Wamsley's analysis.

Wamsley, 11 F.3d at 540-42.

The legislative history of the OWBPA is of some help in

this case but it does not support the majority's result. The

majority points out that "Congress was aware of the benefit

retention issue and chose not to include in the OWBPA a proviso

prohibiting this retention." Typescript at 25 n.19. Yet

Congress also chose not to include a proviso authorizing an

individual to challenge a release while retaining the

consideration for the release. I would think that if Congress

was aware that parties might seek to apply a common law doctrine

under a statute and it did not intend that they could do so, it

would have addressed the point. We indicated in United States v.

Alcan Aluminum Corp., 964 F.2d at 268, in determining the

allocation of damages under the Comprehensive Environmental

Response, Compensation and Liability Act, that "Congress'

deletion of joint and several liability from the final version of

the statute signalled its intent to have the courts determine, in

accordance with traditional common law principles, whether such

liability is proper under the circumstances." A similar type of

analysis here demonstrates that, if anything, the legislative

history supports my conclusion because, as in Alcan Aluminum,

Congress was aware of a problem which could arise under a statute

it was enacting and left the issue to the courts to resolve. As

52
in Alcan Aluminum, how could the courts decide the issue except

by applying the common law?

I will mention briefly some other OWBPA issues. First,

I recognize that the employee might be unable to return the

consideration paid by the employer for the defective OWBPA

release. After all, the employee could have spent the money.

That circumstance, however, would not be legally germane because

it is not unique to cases in which a party seeks to rescind a

release of ADEA claims. Yet, as Fleming explains, to rescind a

party must return the consideration the party obtained under the

contract. Second, allowing ratification will not encourage

employers to obtain invalid releases, for the employer obtaining

such a release would run the risk that the employee would tender

back the consideration and then sue under the ADEA while seeking

to avoid the release. On the other hand, if the employee can

retain the consideration and sue on the merits if the release is

invalid, the employee will obtain an undeserved windfall.

Third, I note but reject Long's contention that

allowing ratification of a defective release may result in

inconsistent adjudications from state to state because the law

regarding ratification is not uniform in all states. Clearly, a

federal common law should be consistent throughout the country,

though I acknowledge that in cases involving ratification courts

of appeals may reach different conclusions until the Supreme

Court settles the law. But the possibility of inconsistent

53
adjudications among the circuits exists throughout the law, so

there is nothing unique about that possibility in the context of

ratification of ADEA releases. In fact, with this opinion there

will be a two/two conflict among the circuits on whether an

employee ratifies a defective OWBPA release by retaining the

consideration the employer paid for it.

As I indicated at the outset, this appeal involves more

than an ADEA claim because the majority vacates the summary

judgment awarded to Sears on Long's ERISA, Pennsylvania Human

Relation Act, and common law claims. I see no basis for it to do

so. There is no argument in Long's brief supporting the

contention that the summary judgment in favor of Sears on those

claims should be reversed. Rather, Long directs his arguments

solely to his ADEA claim. If anyone doubts me on this point, I

suggest that the doubter read Long's brief. In fact, with one

possible exception, Long never specifically mentions his non-ADEA

claims after he describes them in the statement of the case on

the second page of his 48-page brief. This possible exception is

that Long argues that he had not ratified the release by "undue

delay" in declaring his position repudiating the release, because

he filed a PHRA charge of discrimination in July 1993, only four

months after signing the release. Br. at 43-44.

Long, however, does not raise the PHRA issue in

connection with an argument that the summary judgment on the PHRA

claim should be reversed. Rather, he makes the point in the

54
context of an argument that even if common law ratification

principles are applicable to ADEA releases, he has not ratified

the release. Br. at 39. Thus, Sears's brief is correct when it

points out that Long has not "asserted that the District Court

erred in dismissing Long's non-ADEA claims to which the OWBPA

does not apply." Br. at 4.

In response to Sears's observation, Long argues in his

reply brief why the summary judgment on the non-ADEA claims

should be reversed, contending that the release is invalid under

the OWBPA and is not severable with respect to Long's claims so

that it is "unenforceable in all respects." Reply br. at 10.

That frivolous argument, however, comes too late. We explained

the procedural rule in the Republic of the Philippines v.

Westinghouse Elec. Corp., 43 F.3d 65, 71 n.5 (3d Cir. 1994), as

follows:

Although the Republic stated in its initial
briefing that it 'strongly disagrees' with
the district court's findings 'that
Philippine government officials engaged in
retaliation against or harassment of
witnesses in this case' (Appellant's Br. at
19), it did not squarely challenge those
findings as clearly erroneous. See Burns and
Roe Br. at 14 (noting Republic's failure to
challenge findings). The Republic did raise
the issue of clear error in its reply brief
(Appellant's Reply Br. at 10-16), but that
was one brief too late: we have often
instructed that 'appellants are required to
set forth the issues raised on appeal and to
present an argument in support of those
issues in their opening brief.' Kost v.
Kozakiewicz, 1 F.3d 176, 182 (3d Cir. 1993).

55
Thus, Long has waived his action insofar as he bases it on ERISA,

the PHRA, and the common law, as he has not properly challenged

the district court's ruling that he has ratified the release on

those claims. Circuit procedural precedent requires that we

reject Long's challenge to the summary judgment on the non-ADEA

claims.

The majority nevertheless finds that "[b]ecause Long

approached this case by arguing that the entire release --

including non-ADEA claims -- was void we believe that these non-

ADEA claims were adequately preserved for consideration of

appeal." Typescript at 37-38. While the majority correctly

recognizes that it is deciding the case on a basis Long does not

advance, the fact remains that Long's argument was that the

release was void under the OWBPA. He makes no argument in his

opening brief explaining why the release could not be enforced

with respect to his non-ADEA claims nor does he advance on any

basis in that brief to reverse the summary judgment on those

claims. Of course, it does not follow automatically that if a

release cannot be enforced with respect to ADEA claims, it cannot

be enforced with respect to non-ADEA claims. Thus, Long had to

have made that contention to preserve it for appeal. Yet he

simply did not make that contention until his reply brief when it

was too late. I reiterate my suggestion that anyone who doubts

what I say should read Long's brief. I am certain that the

56
reader will agree that Long presents no argument on any basis for

reversing the judgment on the non-ADEA claims.

While I would not consider the challenge to the release

on the non-ADEA claims on the merits, I note that even if I

agreed with the majority's holding on the ADEA claim, I could

conceive of no way in which the release would be invalid with

respect to the non-ADEA claims. Is a court to read the OWBPA

requirements into settlement of ERISA, PHRA, and common law

claims? The implications that somehow the release in this case

might not be effective with respect to the non-ADEA claims are so

far-reaching that I hesitate even to state them. Of course,

these implications will not be lost on attorneys who represent

employees who have signed releases of non-ADEA claims in

connection with employment terminations. What I do state is the

obvious conclusion that if Long's release is valid as to the non-

ADEA claims, it would not have to be ratified with respect to

them to be enforceable.

In conclusion, I will sum up my views. I believe that

we should follow the weight of appellate authority, our well-

established practice of applying federal common law to statutes

not addressing issues arising under them, and our recent opinion

in McNemar dealing with a situation analogous to that here.

Thus, I would hold that an employee may ratify a release which is

invalid under the OWBPA, and that Long has ratified the release.

I would not entertain the appeal from the summary judgment on

57
the non-ADEA claims. Consequently, I would affirm the order for

summary judgment entered by the district court in its entirety

and I thus respectfully dissent.

58