The U.S. Court of Appeals for the Sixth Circuit recently reaffirmed the standards governing when an employee’s release of claims is considered “knowing and voluntary.” The decision, Nakisha West v. Dow Chemical Company, provides useful guidance for employers relying on severance agreements containing broad releases.
Background of the Case
After four years of employment with a Dow Chemical subsidiary, the plaintiff, Nakisha West, was selected for a layoff effective June 30, 2023. Before her separation date, the company emailed her a severance package, including a “Termination General Release” that required her to waive potential claims— including racial discrimination, gender discrimination, retaliation, and hostile‑work‑environment claims under 42 U.S.C. § 1981 and Michigan law.
The email instructed her to review the documents and contact Human Resources with questions. West ultimately signed the release, which provided 45 days to consider the agreement and 7 days to revoke it after signing.
She later filed suit asserting the claims she had agreed to release. The district court granted summary judgment to the employer, and West appealed.
The Sixth Circuit’s Decision
The Sixth Circuit affirmed the district court’s decision, holding that West’s release was enforceable because it was executed knowingly and voluntarily.
The Court applied the established five‑factor federal test, which examines:
- The employee’s experience, background, and education
- The time provided to consider the agreement and the opportunity to consult counsel
- The clarity of the release language
- The consideration provided
- The totality of the circumstances
How the Court Applied the Factors
The Court found all five factors favored enforcement:
- Education and experience: West was a well‑educated employee with a master’s degree and several years of professional experience.
- Opportunity to review: She was expressly advised to consult counsel and given 45 days to do so, regardless of when she claimed to have received the agreement.
- Clear language: The release “left no room for doubt” as to the rights she was relinquishing.
- Consideration: She received severance pay and continued medical benefits.
- Totality of the circumstances: She signed an agreement that explicitly stated she had carefully read and fully understood its terms.
Court Rejects Employee’s Challenges
West argued the release was invalid because it was provided on her termination date, no one verbally explained the agreement, and she felt pressured to sign.
The Court rejected these arguments. It noted that the timing did not limit her ability to consider the agreement because she still had 45 days to review it. The document’s title, “Termination General Release”, made its purpose clear, and employers are not required to walk through each provision verbally.
Importantly, the Court found no evidence of actual coercion to overcome the presumption that she understood and assented to the agreement she signed.
West also raised new arguments on appeal, including claims that the agreement was an adhesion contract, unconscionable, or against public policy. The Court deemed those arguments forfeited because they were not raised in the district court. The Court also noted that, even if considered, the record strongly suggested the release would still be enforceable.
Key Takeaways for Employers
This decision reinforces a few practical points for employers managing separations. Clear, written severance and release agreements remain highly enforceable when they provide adequate time for review and encourage employees to consult with counsel. Courts also do not require employers to verbally explain the agreement to the employee.
Courts give substantial weight to explicit statements in the agreement confirming that the employee has read and understands the terms. At the same time, employees’ unsupported claims of pressure or misunderstanding are insufficient without supporting evidence.
Arguments raised for the first time on appeal, such as unconscionability, may be deemed forfeited.
To discuss how this decision may impact your business or your current severance practices, please contact KJK Labor & Employment attorneys Maribeth Meluch (614.427.5747; MM@kjk.com) or Alan M. Rauss (216.736.7221; AMR@kjk.com).