Resolution of Two Decade Old Case
For the layman party to a lawsuit, perhaps the most shocking part of the ordeal is the sheer length of the process. This is particularly true when a case enters the appellate process. Recently, the Massachusetts Commission Against Discrimination (MCAD) issued a decision in a series of related cases, which began over twenty years ago.
In St. Marie v. ISO New England, Inc., the MCAD finally put to bed a case over two decades in the making. The controversy originated in a 1996 MCAD complaint filed by six employees, including St. Marie, against ISO New England’s predecessor, Northeast Utilities, alleging that they were bypassed for promotion due to age-discrimination. While that case was pending, St. Marie filed a second MCAD complaint against ISO New England alleging retaliation for the 1996 complaint. Eventually, the seven litigants entered into a settlement agreement; however, St. Marie rescinded his acceptance of the settlement. Still, the Superior Court enforced the settlement agreement, and St. Marie’s complaints were dismissed. St. Marie appealed the dismissal of his claims. In September 2003, St. Marie eventually reached a settlement agreement with ISO New England, which “fully and finally settle[d] and terminate[d] any and all differences, disputes, claims and disagreements between [the parties].” This seemingly resolved St. Marie’s complaint and appeal for good; however, in reality, it set in motion a new legal battle that would last roughly 14 years.
Four months after the settlement agreement, an error made by ISO New England employees resulted in a blackout which caused 300,000 homes in Massachusetts to lose power for two hours. St. Marie was the shift supervisor at the time of the blackout. As a result of this blackout, St. Marie was terminated. ISO New England testified that the decision to terminate St. Marie was based on his failure to exercise leadership in the Control Room during the power outage, blaming the outage on the Transmission Stability Operation Guide rather than accepting responsibility and two prior performance issues in 2000 and 2001.
A month later, St. Marie filed an MCAD complaint alleging that he was fired as retaliation for his previous MCAD claims. At Public Hearing, the Hearing Officers concluded that the terms of the release in the previous settlement agreement had discharged all previous “differences” and “disagreements”, and therefore prevented the introduction of any performance deficiencies or disciplinary incidents prior to the settlement, including the two prior performance issues in 2000 and 2001. Although ISO New England was able to reference these past incidents at hearing, the Hearing Officers determined that St. Marie’s discharge was motivated primarily, but not solely, by retaliatory motives. In reaching this conclusion, the Hearing Officer pointed to proximity in time of the settlement and termination, the less severe discipline issued to other parties responsible for the outage, the lack of language in the Transmission Stability Operations Guide about avoiding an outage under those conditions, his supervisor’s non-credible testimony that they were not aware of St. Marie’s discrimination claims/settlement and St. Marie’s recent “meets expectation” performance evaluation. The Hearing Officer awarded St. Marie over $400,000 in monetary damages (back pay, pension losses, and living expenses) and $200,000 in emotional distress damages.
On appeal, the Full Commission determined that the Hearing Officer erroneously barred the evidence of St. Marie’s past performance and discipline; however, they found that it was harmless error because ISO New England was able to reference these past incidents at hearing. ISO New England sought judicial review. However, the Superior Court judge agreed with the Full Commission of the MCAD that the Hearing Officer’s failure to consider pre-settlement incidents was harmless error.
Finally, ISO New England appealed the Superior Court’s decision to the Appeals Court of Massachusetts. The Appeals Court reviewed the exclusion of pre-settlement incidents de novo, and ultimately determined that it was not harmless error. The Appeals Court determined that the pre-settlement incidents affected the degree of discipline issued to St. Marie, and therefore, they “go to the heart of the controversy”. The Appeals court vacated the judgment, and remanded the matter back to the Commission for de novo review.
On remand, the Hearing Officer determined that St. Marie’s pre-settlement discipline and performance provided justification for the termination, for reasons including documented of misgivings about St. Marie’s supervisory performance and prior incidents for which termination was considered. Additionally, the Hearing Officer determined that an incentive raise, which occurred after the settlement, was evidence that ISO New England did not harbor retaliatory animus after the settlement. Based on the new evidence, the Hearing Officer was unable to determine that ISO New England’s justification for terminating St. Marie was pretextual. Therefore, roughly twenty-one years after filing his original MCAD complaint, St. Marie’s retaliation claim was dismissed by the Commission.
So what’s the lesson to be learned from this case?
Although ISO New England ultimately prevailed, it spent two decades, and two decades worth of attorney’s fees, litigating cases with a single employee. The primary problem was the ambiguously drafted release clause. The vague language was likely meant to broaden the scope of the releases protection for the company, but ultimately it was used to argue that it gave the employee a clean slate because all previous “differences” and “disagreements” had been settled. The hearing officer initially granted the terms “differences” and “disagreements” the broadest possible interpretation, and the Superior Court agreed.
Ultimately, the Appeals Court determined that the terms should be interpreted differently based on the context of the agreement. It should be noted that this will not always be the case. A court, including appellate courts, may read your release agreements differently, based on the context and/or the specific wording. Whenever you reach a release agreement, particularly a release agreement with a current employee, it is of the utmost importance that you consider the possible ramifications of the language used, and draft the release accordingly.
If you have any questions about release agreements, the court process, or any other labor and employment law matters, please contact the attorneys at Royal, P.C.