HARRISBURG – A federal court recently dismissed the wrongful termination lawsuit filed by an ex-employee of the Hershey Company, noting in court records that he waived the right to sue when he took a $100,000 severance package.
On Nov. 4, U.S. District Court Judge Sylvia H. Rambo ordered the case dismissed with prejudice, after finding the language contained in plaintiff Kurt L. Ehresman’s contractual release from Hershey was “clear and unambiguous” that he would forfeit his rights to sue, under the same circumstances which he brought his case.
Furthermore, Rambo concluded that Ehresman’s background as an attorney with more than 20 years of experience and the five weeks he spent reviewing the release form in question should have given him ample understanding and time to consider the terms put before him.
“Having considered the totality of circumstances, the court finds that the release was signed knowingly and voluntarily, and thus, absent fraud, bars plaintiff’s claims,” Rambo said.
Ehresman initially filed a complaint on Feb. 6 in the U.S. District Court for the Middle District of Pennsylvania, alleging Hershey violated the Pennsylvania Human Relations Act and Age Discrimination in Employment Act.
Ehresman said the company fired him from his job as global head of intellectual property because he was an older Caucasian male, and was replaced with a young African-American female.
On April 9, Hershey moved to dismiss the complaint. It said Ehresman, as a lawyer, negotiated the terms of his own severance agreement, which included a release of any claims related to his employment — including those that might be unknown at the time he signed the deal, as permitted under Pennsylvania law.
“If (Ehresman) could void his severance agreement based on nothing more than his belief that Hershey misrepresented the grounds for his termination, virtually every separation agreement would be exposed to attack and the certainty of release agreements that promotes settlement of claims and relieves courts of significant burdens would be lost,” the company said in its motion.
Ehresman responded to the motion to dismiss with his own filing April 23, reasserting his allegation Hershey committed fraud in inducing him to sign the severance agreement, because executives told him his position was being eliminated and not that they would hire a different lawyer to do the same job.
“The true reason for terminating Plaintiff is that he was over 50, white and male. The evidence for this includes the initial lie, its attempts to cover it up by pushing Plaintiff out of the building, and waiting until after he was effectively gone before hiring a new person into a ‘new’ position,” Ehresman said.
“This ‘new’ position, however, is the same since it remains the sole attorney in the company for the specialized global Intellectual Property of Defendant.”
Not only does the severance agreement itself preclude his lawsuit, the company said, but Ehresman’s “attempt to evade the agreement also fails as a matter of law because his fraudulent inducement claim is based on statements purportedly made in discussions or other communications outside the agreement.”
Further, the company alleged, Ehresman didn’t plead enough specific facts to support his claim, nor did he return the severance payment. Hershey said state law requires an aggrieved party to return any consideration received from a contract tied to fraud allegations. A party who keeps the consideration “is in effect ratifying the contract despite any claimed misrepresentation or omission.”
Ultimately, the plaintiff’s rationale did not find favor with Rambo.
“The court concludes that plaintiff knowingly and voluntarily released defendant from all claims he seeks to bring and will therefore grant defendant’s motion to dismiss with prejudice,” Rambo said.
The plaintiff was represented by Michael R. Kelley and Wendell V. Courtney of Smigel Anderson & Sacks, in Harrisburg.
The defendants were represented by Eric C. Kim, Michael S. Burkhardt and Michael J. Puma of Morgan Lewis & Bockius, in Philadelphia.
U.S. District Court for the Middle District of Pennsylvania case 1:19-cv-00212
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com