The Failure to Rehire After a Release - A Common Sense View from the 6th Circuit
Posted
9:20 PM
by Michael Fox
Just 3 days before Christmas, the 6th Circuit held that an employee who had signed a release of his age claim in return for an enhanced severance could not claim that the failure to rehire him was age discrimination. The Kellogg Company v. Sabhlock (6th Cir. 12/22/06) [pdf].
Although the Court was careful to point out that it was not setting an all encompassing rule — "Under some facts a general release will bar a subsequent failure to rehire claim and under other facts it will not. It depends on how closely related the rehire is to the original termination in terms of time and subject matter." — and Kellogg had done its job by including an agreement that it had no obligation to rehire him at any time in the future, it was still a nice Christmas gift for employers faced with a problem that appears almost insoluble if discrimination and retaliation statutes are interpreted literally.
Here the 6th Circuit avoided both an unfair result and perhaps more importantly for others a rule that would discourage enhanced payments in return for releases, by holding that "his claim of age discrimination in the failure to rehire arose out of his termination and cannot be the basis for a separate claim. After releasing an age discrimination claim, the employee cannot resurrect the age discrimination claim by reapplying for employment." (my emphasis)
Labels: discrimination, settlement
Too Good to Be True - D.C. Circuit to Rehear Controversial Tax Case
Labels: settlement
Posted
10:39 PM
by Michael Fox
For those in the employment law world who were heartened by the D.C. Circuit's decision that the taxation of compensatory damages recovered in a suit against an employer was unconstitutional — that relief may turn out to be temporary. In August of this year, when the court decided Murphy v. IRS (8/22/06) [pdf], there was hope that settlement of employment law cases would be cheaper, at least in the D.C. Circuit — since no money would be owed for taxes, a lower settlement amount would put the same net dollars into the plaintiff's pocket.
But that prospect is now on hold as the panel has on its own motion vacated its earlier opinion, issued a new briefing schedule, and ordered it to be re-argued on April 23rd. Ross Runkel at Ross' Employment Law Blog has this prediction: Never underestimate the governments' power to tax. I expect that if the panel does not change its position, then the whole court will sit en banc and hold that the tax passes constitutional muster.
He also notes that much more detail and background can be found at the The Tax Prof Blog's post, D.C. Circuit Panel Agrees to Rehear Murphy.
 |
|
|
|||||||
|
|
|
|||||||
|
|
|
