TABLE OF AUTHORITIES............................................................................. ii

STATEMENT OF INTEREST.......................................................................... 1

STATEMENT OF THE ISSUES....................................................................... 2

STATEMENT OF THE CASE......................................................................... 3

A. Statement of Facts and Procedural Background.................................. 3

B. District Court’s Decision....................................................................... 7

ARGUMENT................................................................................................... 9

A. The district court’s decision is inconsistent with the Supreme Court’s tender-back cases................................................................................................... 10

B. The district court erred in concluding that McClellan was required to tender back the $4,000 before filing suit................................................................. 18

CONCLUSION.............................................................................................. 25

CERTIFICATE OF COMPLIANCE.............................................................. 26

CERTIFICATE OF SERVICE......................................................................... 27

ADDENDUM.............................................................................................. A-1

Table of Authorities

Page(s)

Cases

Adams v. Philip Morris, Inc.,
67 F.3d 580 (6th Cir. 1995).......................................................................... 6

Albemarle Paper Co. v. Moody,
422 U.S. 405 (1975).................................................................................... 15

Alexander v. Gardner-Denver Co.,
415 U.S. 36 (1974)...................................................................................... 17

Atwell v. Tennessee State Employees Association,
2015 WL 5697311 (M.D. Tenn. Sept. 28, 2015).................................... 23, 24

Botefur v. City of Eagle Point,
7 F.3d 152 (9th Cir. 1993).......................................................................... 15

Brown v. City of South Burlington,
393 F.3d 337 (2d Cir. 2004).................................................................. 16, 21

Corning Glass Works v. Brennan,
417 U.S. 188 (1974).................................................................................... 15

Fleming v. U.S. Postal Service AMF O’Hare,
27 F.3d 259 (7th Cir. 1994)............................................................. 21, 22, 23

Gascho v. Scheurer Hospital,
589 F. Supp. 2d 884 (E.D. Mich. 2008)................................................. 20, 24

Hogue v. Southern Railway Co.,
390 U.S. 516 (1968).............................................................................. passim

Jakimas v. Hoffmann-LaRoche, Inc.,
485 F.3d 770 (3d Cir. 2007)........................................................................ 16

Long v. Sears Roebuck & Co.,
105 F.3d 1529 (3d Cir. 1997)...................................................................... 16

Oubre v. Entergy Operations, Inc.,
522 U.S. 422 (1998).............................................................................. passim

Rangel v. El Paso Natural Gas Co.,
996 F. Supp. 1093 (D.N.M. 1998).............................................................. 24

Richardson v. Sugg,
448 F.3d 1046 (8th Cir. 2006)..................................................................... 12

Schwartz v. Florida Board of Regents,
807 F.2d 901 (11th Cir. 1987)..................................................................... 18

Wittorf v. Shell Oil Co.,
37 F.3d 1151 (5th Cir. 1994)....................................................................... 23

Statutes

29 U.S.C. § 206(d)(1)........................................................................................ 1

29 U.S.C. § 623(a)........................................................................................... 10

29 U.S.C. § 626(f)............................................................................................ 10

42 U.S.C. §§ 2000e et seq................................................................................... 1

42 U.S.C. § 2000e-5(f)(1)................................................................................... 4

45 U.S.C. §§ 51 et seq...................................................................................... 13

45 U.S.C. § 55................................................................................................. 17

Other Authorities

Federal Rule of Appellate Procedure 29(a)..................................................... 2

Restatement (Second) of Contracts § 7, Comment b...................................... 9

Restatement (Second) of Contracts § 184(1)................................................. 18

Restatement (Second) of Contracts § 381(1)................................................. 19

Restatement (Second) of Contracts § 384, Comment b................................ 19

STATEMENT OF INTEREST

The Equal Employment Opportunity Commission (“EEOC” or “the Commission”) is charged with the interpretation, enforcement, and administration of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. (“Title VII”), and the Equal Pay Act, 29 U.S.C. § 206(d)(1) (“EPA”). Thus, the EEOC has a strong interest in safeguarding individuals’ right to bring private suits to further the purposes of these statutes.

In this Title VII and EPA case, the district court ruled that the plaintiff, Jena McClellan, could not proceed with her lawsuit against her former employer, Midwest Machining, Inc. (“Midwest”), because she and Midwest entered into a severance agreement, which ostensibly released “any and all past, current and future claims” she may have had against it. The court concluded that McClellan could avoid the severance agreement but only if, before filing suit, she had “tendered back,” i.e., returned, the money she obtained as part of it. Because McClellan did not do so, the district court entered judgment as a matter of law in favor of Midwest.

This appeal raises important questions regarding whether the common-law “tender-back” doctrine applies in Title VII and EPA cases, and, if it does, whether it should bar a case like this—where the plaintiff offers to return the consideration just weeks after filing suit, before the defendant is obligated to file a responsive pleading, and the defendant does not accept the money. Since the answer to these questions will affect the enforcement of Title VII and the EPA, the EEOC offers its views to the Court. See Fed. R. App. 29(a).

STATEMENT OF THE ISSUES [1]

1. Did the district court err in holding that the common-law “tender-back” doctrine applies to suits seeking relief under Title VII and the EPA?

2. Did the district court err in dismissing McClellan’s lawsuit because she filed it before “tendering back” the $4,000 in consideration she received as part of a severance agreement, even though she attempted to return the money just weeks after obtaining counsel and filing her lawsuit, and Midwest refused to accept the money?

STATEMENT OF THE CASE

A. Statement of Facts and Procedural Background

Midwest, a maker of component parts for complex tools and machines, hired McClellan in 2008 as a telemarketer and soon promoted her to work in “inside sales.” R.31-4/McClellan Dep./PageID200; see also https://selflube.com/ (last visited December 19, 2017). In late August of 2015, McClellan announced her pregnancy at work. R.1/Compl./PageID3. According to McClellan, her “supervisor reacted negatively” to this announcement, commenting on the “medical appointments related to her pregnancy.” Id. Midwest terminated McClellan in mid-November 2015, “[d]espite McClellan’s many years of service for the company in its inside sales department and no record of discipline in over six years.” R.33/Dist. Ct. Second Op. at 2/PageID230.

The day of the termination, McClellan testified that Philip Allor, Midwest’s owner, called her into his office. R.31-4/McClellan Dep./ PageID202. There, Allor presented McClellan with a severance agreement and said that she “needed to sign then if [she] wanted any severance.” R.17-3/McClellan Aff./PageID90. “Feeling pressured,” McClellan testified, she signed the agreement, but did not consult a lawyer before doing so. Id. Referring to a provision in the agreement that she would waive “any and all past, current and future claims,” McClellan testified, “I did not understand that the ‘claims’ referred to in . . . the severance agreement meant discrimination complaints.” Id. “I assumed it referred to any unpaid wages or benefits,” she said. Id.

McClellan filed a charge of discrimination with the EEOC, and the EEOC subsequently issued her a notice of right to sue on August 11, 2016. R.17-2/Piper Aff./PageID82-83. On November 6, 2016, just before the ninety-day expiration date for filing suit in court, see generally 42 U.S.C. § 2000e-5(f)(1), McClellan first met with the attorney representing her in this case, William Piper, and told him what had transpired during her employment with Midwest. Id. Given that any Title VII action would soon be untimely under 42 U.S.C. § 2000e-5(f)(1), Piper “immediately drafted a lawsuit,” which he filed with the district “court on November 9, 2016.” Id.

The suit alleges that Midwest “terminated Ms. McClellan because of her pregnancy.” R.1/Compl./PageID4. It also accuses Midwest of maintaining a sex-segregated workforce in that “all 20 or so people who worked in inside sales . . . were women,” and “all three people who worked in outside sales were men.” Id. at PageID2. McClellan’s lawsuit further avers that Midwest “paid male outside sales persons substantially higher commissions and paid them substantially more overall than female inside sales persons, even though the positions required substantially similar duties, requirements, equal skill, effort and responsibility, under the same or similar working conditions.” Id. at PageID3.

After receiving McClellan’s complaint, Midwest’s attorney notified Piper that McClellan and Midwest had entered into a severance agreement. R.17-2/Piper Aff./PageID83. On or around December 1, 2016, about three weeks after McClellan filed suit and before Midwest had filed, or was required to file, a responsive pleading, McClellan mailed a letter to Midwest, at the direction of her attorney, saying that she was “rescinding the severance agreement . . . because [she] want[s] to litigate matters relating to [her] former employment and termination.” R.17-2/McClellan Letter/PageID85; R.17-2/Piper Aff./PageID83. Enclosed with McClellan’s letter was a check for $4,000. R.17-2/Midwest Resp./PageID87. Midwest responded by returning the check to McClellan a week later and asserting that “[t]here is no legal basis for rescinding the severance agreement.” Id.

Midwest then moved for summary judgment on the theory that the severance agreement barred McClellan’s suit. R.16/Def.’s First Mot. S.J./PageID53-60. McClellan opposed the motion, arguing inter alia that the severance agreement should be voided because she did not enter into it knowingly and voluntarily. R.17/Pl.’s Br. in Opp. Def.’s First Mot. S.J./PageID73-74. The district court denied Midwest’s motion without prejudice and permitted the parties to conduct discovery limited to the issue of whether McClellan “knowingly and voluntarily executed the agreement.” R.19/Dist. Ct. First Op. at 1-6/PageID99-104.

Such discovery took place and then Midwest renewed its summary judgment motion. R.27/Def.’s Second Mot. S.J./PageID119-129. There, it argued, under the factors set out in this Court’s decision in Adams v. Philip Morris, Inc., 67 F.3d 580 (6th Cir. 1995), that McClellan “knowingly and voluntarily released her federal claims.” Id. at PageID120-126. Midwest added, in the alternative, that “the tender-back rule applies to McClellan’s federal claims”—such that even if she could void her agreement to waive all claims, she ratified the contract by keeping the consideration. Id. at PageID126-129.

B. District Court’s Decision

The district court disagreed with Midwest that, as a matter of law, McClellan entered into the severance agreement knowingly and voluntarily. R.33/Dist. Ct. Second Op. at 2-4/PageID230-232. In that regard, it found that, on the morning she signed the agreement, “she was ‘blindsided’ by an unexpected meeting” to terminate her employment; “she felt ‘bullied,’ did not feel free to leave the room, and did not feel like she could ask any questions.” Id. at PageID232. The district court further found that Allor, Midwest’s owner, “insisted [McClellan] sign the agreement and forcefully said if she wanted any money after her abrupt termination, she would [immediately] need to sign the agreement; she had no time to consider whether to sign the release, and certainly no time to consult with a lawyer.” Id. The district court added that McClellan “received a small sum of money to extinguish any claims if she truly suffered unlawful discrimination; [and] she did not understand the broad scope of the agreement.” Id. Recognizing the “common-law contractual defense of duress,” the district court concluded based on those facts that a jury could find that McClellan did not enter into the agreement knowingly and voluntarily. Id. at PageID232-233 n.3.

Nevertheless, the district court granted summary judgment in favor of Midwest based on “the common-law doctrines of release and tender back.” Id. at PageID229. It observed that “McClellan accepted the severance payments of $4,000.00, but did not ‘tender back’ that amount prior to filing suit.” Id. at PageID232. To support its conclusion that the tender-back rule barred McClellan’s suit, the district court surveyed the case law concerning the doctrine, and concluded that, even if a severance agreement is voidable on grounds of duress or involuntariness, a plaintiff will still ratify the contract unless she “return[s] the consideration” as a precondition to filing suit. Id. at PageID233-236 (citations omitted). According to the district court, McClellan’s “decision to file a lawsuit prior to tendering back (or attempting to tender back) the consideration she received affirmed she ratified the release.” Id. at PageID236. The district court did not mention that McClellan attempted to tender back the $4,000 soon after filing suit.

ARGUMENT

As the Supreme Court explained in Oubre v. Entergy Operations, Inc., 522 U.S. 422, 425 (1998), the tender-back doctrine is rooted in “general principles of state contract jurisprudence.” The doctrine provides that “contracts tainted by mistake, duress, or even fraud are voidable at the option of the innocent party,” but “before the innocent party can elect avoidance, she must first tender back any benefits received under the contract.” Id. (citing, inter alia, 1 Restatement (Second) of Contracts § 7, and Comment b (1979)). “If she fails to do so within a reasonable time after learning of her rights,” the Court continued, “she ratifies the contract and makes it binding.” Id. (citations omitted). Thus, the tender-back doctrine is related to the ratification doctrine, in that if a party who could avoid her obligations under a contract keeps the consideration, she may be deemed to have ratified an otherwise avoidable agreement.

Based on these doctrines, the district court here concluded that “even if a party signs a release under duress, she must ‘as a condition precedent to suit, . . . return the consideration in exchange for a release.’” R.33/Dist. Ct. Second Op. at 5/PageID233 (quoting Justice Thomas’ dissenting opinion in Oubre, 522 U.S. at 436, and citing a decision of the Michigan Supreme Court). The district court erred in entering judgment as a matter of law for Midwest on this basis.

A. The district court’s decision is inconsistent with the Supreme Court’s tender-back cases.

The district court’s decision is inconsistent with the Supreme Court’s decisions in this area. In Oubre, the Court considered the applicability of the tender-back doctrine in the context of the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 623(a). The plaintiff in Oubre signed a release of all claims she might have had against her employer as part of a termination agreement. 522 U.S. at 423-24. As consideration for signing the release, she received severance pay. Id. The release, however, did not comply with certain requirements of the Older Workers Benefit Protection Act (“OWBPA”), 29 U.S.C. § 626(f), an amendment to the ADEA that addressed waivers of claims under the ADEA. Id. at 424-25. After receiving the severance pay, the plaintiff in Oubre sued her former employer under the ADEA. Id. at 425. She did not offer to return the money paid to her pursuant to the agreement before filing suit or at any time thereafter. Id. The defendant in Oubre, much like the defendant here, moved for summary judgment, contending that, even if the release did not comply with the OWBPA, the plaintiff had ratified it by failing to return or offer to return the severance pay she had received. Id.

The Supreme Court rejected this argument. It held that, because the agreement did not conform to the OWBPA, which “sets up its own regime for assessing the effect of ADEA waivers, separate and apart from contract law,” the employer had no defense based on the plaintiff’s failure to tender back the severance money, “notwithstanding how general contract principles would apply to non-ADEA claims.” Id. at 427. Although this conclusion was specific to the OWBPA and the ADEA, the Court added that applying the tender-back doctrine to ADEA lawsuits “would frustrate the statute’s practical operation [because] [i]n many instances a discharged employee likely will have spent the moneys received and will lack the means to tender their return. These realities might tempt employers to risk noncompliance with the OWBPA’s waiver provisions, knowing it will be difficult to repay the moneys and relying on ratification.” Id. The Court concluded: “[w]e ought not to open the door to an evasion of the statute by this device.” Id.

The same policy concerns apply with equal if not greater force here. If the district court’s decision is affirmed, employers within this Circuit will have every incentive to pressure employees into executing waivers under duress, or even engage in deceptive practices to induce them to do so, knowing that it will be difficult for those employees, especially lower-paid ones, to tender back the consideration and rescind the agreement. As the Supreme Court said in Oubre, “[w]e ought not to open the door to an evasion of the statute by this device.” See also Richardson v. Sugg, 448 F.3d 1046, 1056-57 (8th Cir. 2006) (analyzing the Supreme Court’s policy concerns in Oubre, and holding that they supported the conclusion that the tender-back doctrine does not bar a Title VII lawsuit). Just as requiring a tender back in Oubre would have “frustrate[d] the [ADEA’s] practical operation,” 522 U.S. at 427, so too does it undermine the objectives of Title VII and the EPA to prevent McClellan from pursuing a sex-discrimination suit, which at this stage must be presumed to have merit, based on the mere fact that she did not pay back the severance money before filing suit.

Not only is the district court’s conclusion inconsistent with Oubre, it also conflicts with Hogue v. Southern Railway Co., 390 U.S. 516 (1968). There, the Supreme Court addressed whether the tender-back doctrine applies to claims under 45 U.S.C. §§ 51 et seq., the Federal Employers’ Liability Act of 1908 (“FELA”). Hogue, 390 U.S. at 516. The plaintiff in Hogue injured his knee during his employment with Southern Railway Company. Id. at 517. The company’s doctor assured the plaintiff that the injury was only a temporary bruise. Id. As a result, the parties executed an agreement under which the plaintiff released his claims against the employer in exchange for $105. Id. However, it was later determined that the plaintiff had suffered a permanent knee injury, and had to undergo two operations. Id. Without first tendering back the $105, the plaintiff sued under FELA, asserting that the agreement was voidable because of mutual mistake of fact. Id. at 516. The Georgia Court of Appeals, much like the district court here, held that a plaintiff who seeks to void a release under FELA based on mutual mistake must, before filing suit, tender back to the employer the consideration received in exchange for the release. Id.

The Supreme Court reversed. It wrote that requiring a tender back as a prerequisite to a suit under FELA would be “wholly incongruous with the general policy of the Act to give railroad employees a right to recover just compensation for injuries negligently inflicted by their employers.” Id. at 518 (quotations and citation omitted). The Court ruled, however, that the sum already paid by the employer and retained by the employee must be deducted from the recovery (if any) obtained through a FELA lawsuit. Id. Therefore, Hogue stands for the proposition that when a statute’s objective is to provide an employee a right to recover just compensation for injuries inflicted by her employer, tendering back consideration received for a waiver is not a prerequisite to suit, and the consideration must be set off only from any eventual recovery the plaintiff might obtain.

The logic of Hogue requires reversal of the district court’s decision. Much like FELA, Title VII and the EPA were enacted with the “general policy” goal of giving “employees a right to recover just compensation” for injuries inflicted by their employers’ discriminatory conduct. Id.; see also Albemarle Paper Co. v. Moody, 422 U.S. 405, 418 (1975) (“It is also the purpose of Title VII to make persons whole for injuries suffered on account of unlawful employment discrimination.”); Corning Glass Works v. Brennan, 417 U.S. 188, 208 (1974) (explaining that the EPA is “broadly remedial” and that Congress’ goal in passing it was to provide wage increases to employees underpaid on account of their sex). In other words, the Court’s rationale in Hogue, which provided that the tender-back rule does not apply to FELA suits, applies equally to Title VII and EPA cases.

Although such a holding has no precedent in this Court, other courts of appeals have recognized that “the rule announced in Hogue, that tender back is not required for suit under FELA, is generalizable to suits under other federal compensatory statutes.” Botefur v. City of Eagle Point, 7 F.3d 152, 156 (9th Cir. 1993) (applying the reasoning of Hogue to a suit under 42 U.S.C. § 1983 because “the central purpose” of Section 1983, much like FELA, is “to provide compensatory relief”) (citations and quotations omitted); see also Jakimas v. Hoffmann-LaRoche, Inc., 485 F.3d 770, 784 (3d Cir. 2007) (extending the rule from Hogue to ERISA suits because “ERISA, like . . . FELA, is a federal remedial statute”) (quotations omitted); Long v. Sears Roebuck & Co., 105 F.3d 1529, 1541 (3d Cir. 1997) (“[C]ourts have regularly applied the analysis in Hogue to reject tender requirements in lawsuits brought under a variety of federal remedial statutes.” (citing cases applying Hogue to lawsuits under Title VII and the Sherman Act)). Put simply, it would make no sense to extend the rule from Hogue to suits under Section 1983 and ERISA, but not to those alleging Title VII or EPA violations. See Brown v. City of S. Burlington, 393 F.3d 337, 347 (2d Cir. 2004) (“[I]n applying and construing certain other federal statutes with analogous purposes, the Supreme Court has dispensed with the tender-back requirement altogether.”) (citing Oubre and Hogue).

The district court reasoned (PageID235) that Hogue was not controlling here because it involved FELA, which—unlike Title VII and the EPA—contains a provision governing waivers of claims under that statute. See 45 U.S.C. § 55. But the Court in Hogue specifically disclaimed reliance on that provision. See 390 U.S. at 518 (“There is no occasion to decide whether the release here violated [42 U.S.C. § 55].”). Instead, the Court said simply that “a rule which required a refund as a prerequisite to institution of a suit would be ‘wholly incongruous with the general policy of the Act to give . . . employees a right to recover just compensation for injuries negligently inflicted by their employers.’” Id. (citation omitted). Thus, although the district court is correct that “the FELA analyzed in Hogue contained a waiver provision that seemingly supplanted common law,” R.33/Dist. Ct. Second Op. at 7/PageID235, it was incorrect to assign any weight to that fact because the result in Hogue turned on entirely unrelated concerns over “the general policy” objectives of the statute.

Moreover, although Title VII and the EPA do not contain provisions governing releases, it is well-settled through the case law that agreements to waive prospective claims under those statutes are void on public policy grounds. See Alexander v. Gardner-Denver Co., 415 U.S. 36, 51 (1974) (“[T]here can be no prospective waiver of an employee’s rights under Title VII.”); Schwartz v. Fla. Bd. of Regents, 807 F.2d 901, 906 (11th Cir. 1987) (“There can be no prospective waiver of an employee’s rights under . . . the Equal Pay Act, because this would nullify the purposes of the statute and thwart the legislative policies it was designed to effectuate.”) (citations and quotations omitted). Here, the agreement Midwest offered to McClellan purported to “satisf[y] any and all . . . future claims by either party.” R.16-1/Severance Agreement/PageID62 (emphasis added). To be sure, one unenforceable provision may not render void the entire agreement. See, e.g., Restatement (Second) of Contracts § 184(1) (1981). Yet it is nonetheless noteworthy that the agreement upon which Midwest seeks to escape liability not only may be voidable on grounds of duress, but also contains a provision that is void on public policy grounds. This Court should not countenance such an agreement by affirming the district court’s decision.

B. The district court erred in concluding that McClellan was required to tender back the $4,000 before filing suit.

Even assuming arguendo that the district court’s decision is somehow compatible with Oubre and Hogue, the court nonetheless erred in finding that McClellan was required to tender back the $4,000 “‘as a condition precedent to suit.’” R.33/Dist. Ct. Second Op. at 5/PageID233. For that proposition, the district court relied on Justice Thomas’ dissent in Oubre, but the majority opinion in Oubre states that the party “elect[ing] avoidance” may “tender back any benefits received under the contract” not only before filing suit, but at another point “within a reasonable time after learning of her rights.” 522 U.S. at 425 (emphasis added). Moreover, the Restatement of Contracts provides that “[t]he power of a party to avoid a contract for . . . duress . . . is lost if, after the circumstances that made it voidable have ceased to exist, he does not within a reasonable time manifest to the other party his intention to avoid it.” Restatement (Second) of Contracts § 381(1) (1981) (emphasis added). By the same token, the Restatement says that if the court can assure that the plaintiff can return the consideration “in connection with the relief granted,” then a pre-suit tender is not necessary. See Restatement (Second) of Contracts § 384 (1981), Comment b (“If the court has the power to assure the required return in connection with the relief that it grants, it is not necessary that there have been a prior return or offer to return. If all that is to be returned is money, a credit against a larger sum allowed in restitution will suffice.”).

In accordance with these principles, McClellan should not be deemed to have ratified the release, and her suit should thus not be barred, because she offered to tender back the money within a few weeks of filing suit. Given the district court’s factual finding (PageID231) that McClellan “did not understand she had given up her right to sue for discrimination” at the time she signed the agreement, it follows that her offer to tender back the consideration fell “within a reasonable time after learning of her rights,” i.e., when she engaged Mr. Piper to represent her in this matter. See Oubre, 522 U.S. at 425. Further, given that McClellan made an unconditional offer to return the $4,000 soon after filing suit, and it was Midwest who refused to accept the money, the district court plainly had the power to assure that McClellan would return the $4,000 if the suit proceeded, or the court could have set off $4,000 from any subsequent damages award. In such circumstances, a pre-suit tender was unnecessary. See, e.g., Gascho v. Scheurer Hosp., 589 F. Supp. 2d 884, 891 (E.D. Mich. 2008) (“Even assuming that federal law requires that Plaintiff tender back the consideration she received under the release, federal law does not require the tender back be before, or contemporaneous with, the filing of the original complaint.”).[2]

In support of its decision to grant Midwest’s motion for summary judgment, the district court relied on other district court decisions and the Seventh Circuit’s decision in Fleming v. U.S. Postal Service AMF O’Hare, 27 F.3d 259 (7th Cir. 1994). Fleming does not support the outcome below. It is true in that case the court stated that “one of the most elementary principles of contract law [is] that a party may not rescind a contract without returning to the other party any consideration received under it.” Fleming, 27 F.3d at 260 (citations omitted). However, the court’s reasoning focused on the plaintiff’s outright refusal to offer to tender back the $75,000 she received in exchange for a release of claims—either before or after filing suit. Id. at 261-62. In fact, the court in Fleming said that the plaintiff could not be faulted for failing to realize, before she had the “assistance of counsel,” that she was required to tender back the $75,000. Id. at 262. Yet it noted that “she ha[d] counsel” on appeal, and it faulted the plaintiff’s attorney for not asking the court of appeals to remand the case so that the plaintiff could offer to tender back the funds and then proceed with her lawsuit. Id. The Fleming court also said that the district court could grant the plaintiff relief contingent on a return of the $75,000, but it found no reason to believe that the plaintiff could or would fulfill that condition—given that she had not offered to tender back the money by that point—and it said the defendant “should not be put to the expense of defen[ding]” against the lawsuit without such assurance. Id.

Therefore, it is implicit in Fleming that, if the plaintiff had offered to return the money within a reasonable period of time after filing suit, as McClellan did here, the outcome would have been different. Part of the court’s rationale in Fleming was that an employer should not be subjected to the expense of defending against an employment discrimination lawsuit without some assurance that the plaintiff would at some point return the consideration from a release if it was deemed void. That is a fair concern, but it has no place here, where McClellan offered to return the money soon after filing suit, before Midwest was obligated to file a responsive pleading, and it was Midwest who refused to accept the funds. Thus, Fleming does not support the district court’s position: that an employee who signs a release unknowingly and involuntarily may not rescind the release and proceed with a discrimination lawsuit even if she attempts to tender back the consideration soon after filing her complaint.[3]

Moreover, Fleming is consistent with a district court decision recently issued within this Circuit. In Atwell v. Tennessee State Employees Association, No. 3:14-cv-1808, 2015 WL 5697311 (M.D. Tenn. Sept. 28, 2015), the court first observed—as discussed above—that in Oubre and Hogue, “the Supreme Court has now twice disavowed tender back in the context of remedial employment statutes.” Id. at *2. It then noted that, in the wake of Oubre, courts have “reject[ed] the tender back doctrine in the context of Title VII cases.” Id. at *3 (citing Rangel v. El Paso Natural Gas Co., 996 F. Supp. 1093, 1097 (D.N.M. 1998), and Gascho, 589 F. Supp. 2d at 891). After surveying apposite decisions from various jurisdictions, the Atwell court declined to bar the plaintiff’s suit based on the tender-back doctrine, deeming it inappropriate to “block Plaintiff’s claims at the starting gate.” Id. at *4. Instead, the court “require[d] Plaintiff [to] tender back the consideration she received from Defendant and amend[ ] her Complaint to reflect compliance with this directive before litigation continues.” Id.

As explained above, it is the EEOC’s view, based on Oubre and Hogue, that the tender-back rule should not apply to this case at all. If this Court is unconvinced, however, the Commission urges it, at a minimum, to adopt what the Atwell decision characterized as a “middle ground” approach. See id. Under such an approach, McClellan’s suit would be allowed to proceed, but only after she again tendered back the $4,000 and amended her complaint to demonstrate compliance with the tender-back rule, so that she may then proceed with her lawsuit and vindicate her right to be free from sex and pregnancy discrimination in the workplace.

CONCLUSION

Because the district court should not have granted Midwest’s motion for summary judgment, the EEOC urges this Court to reverse that decision and remand the case for further proceedings.

Respectfully submitted,

JAMES L. LEE

Deputy General Counsel

JENNIFER S. GOLDSTEIN

Associate General Counsel

LORRAINE C. DAVIS

Assistant General Counsel

s/Philip M. Kovnat

PHILIP M. KOVNAT

Attorney

Equal Employment

Opportunity Commission

Office of General Counsel

131 M St. N.E., 5th Floor

Washington, D.C. 20507

(202) 663-4769

philip.kovnat@eeoc.gov

CERTIFICATE OF COMPLIANCE

This brief complies with the type-volume limitation of Fed. R. App. P. 29(a)(5) and 32(a)(7)(B) because it contains 4,769 words, excluding the parts of the brief exempted by Fed. R. App. P. 32(f) and 6th Cir. R. 32(b)(1).

This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because it has been prepared in a proportionally spaced typeface using Microsoft Word 2016 in Palatino Linotype 14 point.

s/Philip M. Kovnat

PHILIP M. KOVNAT

Attorney

Equal Employment

Opportunity Commission

Office of General Counsel

131 M St. N.E., 5th Floor

Washington, D.C. 20507

(202) 663-4769

philip.kovnat@eeoc.gov

Dated: December 19, 2017

CERTIFICATE OF SERVICE

I, Philip M. Kovnat, hereby certify that I electronically filed the foregoing brief with the Court via the appellate CM/ECF system this 19th day of December, 2017. I also certify that all counsel of record have consented to electronic service, and will be served the foregoing brief via the appellate CM/ECF system.

s/Philip M. Kovnat

PHILIP M. KOVNAT

Attorney

Equal Employment

Opportunity Commission

Office of General Counsel

131 M St. N.E., 5th Floor

Washington, D.C. 20507

(202) 663-4769

philip.kovnat@eeoc.gov

Dated: December 19, 2017

[1] The EEOC takes no position on any other issue in this appeal.

[2] Moreover, “a party asserting the defense of ratification of a voidable contract”—in this case, Midwest—“ordinarily must demonstrate that the releasor intended to ratify the agreement.” Brown, 393 F.3d at 343-44 (citation omitted). Here, because McClellan promptly offered to return the $4,000 soon after she became aware of her right to avoid the contract, a factfinder could easily conclude that Midwest did not carry its burden of demonstrating that she intended to ratify the agreement.

[3] The district court also cited Wittorf v. Shell Oil Co., 37 F.3d 1151 (5th Cir. 1994). R.33/Dist. Ct. Second Op. at 8/PageID236. Wittorf is distinguishable, however, because there, as in Fleming, the plaintiff “never returned” the consideration he received in exchange for a release of claims, nor did he “make an offer to return the money.” 37 F.3d at 1153.