McDaniel v Momentive Settlement in Age Discrimination Case After AARP Fou
McDaniel v. Momentive, Settlement in Age Discrimination Case After - AARP Fou... Legal Advocacy
McDaniel sued, invoking his rights under the federal Age Discrimination in Employment Act (ADEA), which among other things invalidates waivers in employment severance packages if the waivers were based on inaccurate, erroneous, or misleading information or if the worker was unaware of key facts. In other words, a waiver is not “knowing and voluntary” if the employer misled the worker into signing the waiver by mischaracterizing or withholding information.
As discovery in the litigation progressed, McDaniel learned more and more information that he alleged challenged the restructuring not only for him, but for others. He sought to expand his case to assert a “pattern or practice” of age discrimination by Momentive, but the federal court refused to allow him to expand the case or assert claims on behalf of others similarly situated to him. The court dismissed the case before he had a chance to have it heard, finding that the waiver was “knowing and voluntary” and that even if it was not, McDaniel could not sue Momentive for age discrimination because he had not returned the severance pay. The court also awarded Momentive attorney fees of more than $160,000, finding that McDaniel had brought the suit in bad faith. This award was strikingly close to the $164,000 McDaniel had received in severance payments.
McDaniel appealed to the U.S. Court of Appeals for the Fifth Circuit, where AARP filed a friend-of-the-court brief on behalf of McDaniel. AARP argued that a waiver is invalid if a person was induced to sign it by a material misrepresentation. Moreover, the brief argued, Supreme Court precedent is clear that workers do not have to return severance pay to challenge the waiver. Finally, the brief explained that the ADEA does not provide for recovery of attorneys’ fees from workers, and that the court had no reason to conclude that McDaniel had brought his case in bad faith.
Shortly after AARP Foundation Litigation attorneys filed AARP’s brief, the parties reached a confidential settlement.
Settlement in Age Discrimination Case After AARP Files Its Brief
Read AARP's (PDF) Shortly after AARP filed a friend-of-the-court brief, parties settled an age discrimination case that went to the heart of what constitutes a valid waiver of rights in negotiating a severance package.Background br
Robert McDaniel worked for a company, later renamed Momentive, for 26 years until April, 2010 when he was informed his position was being eliminated due to restructuring. He signed a severance package that provided him with compensation and other benefits after he waived any future legal claims. It wasn’t until later that he became aware that no other Momentive employee’s position had ever been “restructured” in the way his job was, and that two years after he left a person 20 years younger was hired to fill his jobMcDaniel sued, invoking his rights under the federal Age Discrimination in Employment Act (ADEA), which among other things invalidates waivers in employment severance packages if the waivers were based on inaccurate, erroneous, or misleading information or if the worker was unaware of key facts. In other words, a waiver is not “knowing and voluntary” if the employer misled the worker into signing the waiver by mischaracterizing or withholding information.
As discovery in the litigation progressed, McDaniel learned more and more information that he alleged challenged the restructuring not only for him, but for others. He sought to expand his case to assert a “pattern or practice” of age discrimination by Momentive, but the federal court refused to allow him to expand the case or assert claims on behalf of others similarly situated to him. The court dismissed the case before he had a chance to have it heard, finding that the waiver was “knowing and voluntary” and that even if it was not, McDaniel could not sue Momentive for age discrimination because he had not returned the severance pay. The court also awarded Momentive attorney fees of more than $160,000, finding that McDaniel had brought the suit in bad faith. This award was strikingly close to the $164,000 McDaniel had received in severance payments.
McDaniel appealed to the U.S. Court of Appeals for the Fifth Circuit, where AARP filed a friend-of-the-court brief on behalf of McDaniel. AARP argued that a waiver is invalid if a person was induced to sign it by a material misrepresentation. Moreover, the brief argued, Supreme Court precedent is clear that workers do not have to return severance pay to challenge the waiver. Finally, the brief explained that the ADEA does not provide for recovery of attorneys’ fees from workers, and that the court had no reason to conclude that McDaniel had brought his case in bad faith.
Shortly after AARP Foundation Litigation attorneys filed AARP’s brief, the parties reached a confidential settlement.