Allied Chemical Corporation v. White Memorandum for the United States as Amicus Curiae

    No. 77-97

Jtt tl|E Supreme Court of itje Putted
October Term, 1977

Allied C hemical Corporation, petitioner

v.
Anthony White and Henry Clark, Sr .

ON PETITION FOR A WRIT OF CERTIORARI TO 
THE UNITED STATES COURT OF APPEALS FOR 

THE FIFTH CIRCUIT

MEMORANDUM FOR THE UNITED STATES 
AS AMICUS CURIAE

Wade H. McCree, J r ., 
Solicitor General, 
Department o f Justice, 
Washington, D.C. 20530.

Abner W. Sibal,
General Counsel,

J oseph T. Eddins,
Associate General Counsel,

Beatrice Rosenberg,
Assistant General Counsel,

M ary-H elen M autner,
Attorney,
Equal Employment Opportunity Commission, 
Washington, D.C. 20506.



3u tlrje Supreme Court of tt|e Putted States
October Term, 1977

No. 77-97
Allied Chemical Corporation, petitioner

v.
Anthony White and Henry Clark, Sr .

ON PETITION FOR A WRIT OF CERTIORARI TO 
THE UNITED STATES COURT OF APPEALS FOR 

THE FIFTH CIRCUIT

MEMORANDUM FOR THE UNITED STATES 
AS AMICUS CURIAE

This memorandum is submitted in response to this 
Court’s order of October 3, 1977, inviting the Solicitor 
General to express the views of the United States with 
respect to this case.

This suit arises out of a complaint filed by respondents 
seeking to intervene as plaintiffs in a successful suit 
against petitioner Allied Chemical Corporation challeng­
ing a seniority system as violative of Title VII of the Civil 
Rights Act of 1964. During a reduction-in-force, 
respondents were laid off pursuant to the application of 
the challenged seniority system and sought back pay relief 
similar to that obtained by the named plaintiffs. The 
challenged layoffs had occurred soon after the signing of a 
conciliation agreement with the Equal Employment 
Opportunity Commission, and Allied Chemical moved to

(1)



2

dismiss respondents’ intervention complaint on the 
ground that respondents had signed the agreement which 
contained a clause waiving their right to sue. T he district 
court dismissed the action stating (Pet. App, D-2):

The gist of the intervenors’ position is that they 
entered into the EEOC agreement without proper 
legal advice and that they were not advised at the 
time of available alternate procedures. We do not 
believe that this is sufficient grounds for the 
intervenors to ignore the EEOC agreement and 
attempt to pursue this litigation.

The court of appeals reversed. Finding “at least some 
evidence before the [district] court * * * that the waivers 
were signed with less than full knowledge of the bargain 
that was being struck” (Pet. App. A-7 n. 5), the court of 
appeals remanded the case to the district court for a 
hearing to determine whether the intervenors “knowingly 
and voluntarily” waived their rights by signing the 
conciliation agreement (Pet. App. A-7).

1. In Alexander v. Gardner-Denver Co., 415 U.S. 36, 
52 n. 15, this Court stated that a district court faced with 
an asserted waiver of rights granted by Title VII should 
determine “at the outset that the employee’s consent to 
the settlement was voluntary and knowing.” The courts of 
appeals thus far have had little occasion to consider the 
application of this requirement in concrete situations, 
although the Court of Appeals for the Fifth Circuit has 
held that the proponent of a Title VII release must meet 
the “classic test” by showing that the release “ ‘was 
executed freely, without deception or coercion, and that it 
was made * * * with full understanding of [the waived] 
rights. United States v. Allegheny-Ludlum Industries, 
Inc., 517 F. 2d 826, 861. The requirement that knowing 
and voluntary action precondition any forfeiture of Title



3

VII rights is appropriate because of the fundamental 
importance of equal employment guarantees. On the 
other hand, requirements aimed principally at the dangers 
of deception and coercion cannot be utilized lightly to 
upset settlement agreements negotiated in good faith by 
all parties. Conciliation and negotiation are the “preferred 
means” of resolving Title VII claims. Alexander v. 
Gardner-Denver Co., supra, 415 U.S. at 44. The Equal 
Employment Opportunity Commission negotiates ap­
proximately 7,000 such conciliation agreements each year 
and all those who are affected by Title VII have an 
interest in preserving the viability of the conciliation 
process, which depends in part upon the finality of 
negotiated settlement agreements. This tension between 
the requirement of legitimacy in the waiver process and 
the need for dependable finality in settlement agreements 
imposes special responsibilities upon the district courts in 
ruling on claims by persons who have signed waiver 
agreements.

2. In the instant case, respondents who were signatories 
to a negotiated Title VII settlement sought to intervene in 
a subsequent private Title VII action claiming that their 
written waiver of Title VII claims against petitioner was 
not knowing and voluntary within the meaning of 
Alexander v. Gardner-Denver Co., supra. Because of the 
way in which the issue was litigated in the district court, 
the specific nature of respondents’ claims has not yet been 
clarified. The complaint in intervention filed by re­
spondents did not address their waiver claim, and it was 
not adequately illuminated by the parties in depositions or 
subsequent written motions. As the court of appeals 
noted, there is some evidence in the record indicating that 
“the waivers were signed with less than full knowledge of 
the bargain * * * being struck” (Pet. App. A-7). However, 
there is nothing to indicate whether this lack of



4

knowledge is allegedly the result of deception, failure of 
the Commission attorneys to explain the settlement, 
ambiguity in the document or waiver provision itself, or 
respondents’ failure to make any effort to understand the 
agreement they signed. It therefore cannot be determined 
on the present record whether in fact respondents have 
presented the type of claim that might render their signed 
waiver inoperative under the standard announced in 
Gardner-Denver.

Without obtaining a more precise understanding of the 
cause of respondents’ alleged lack of knowledge, the 
district court dismissed their intervention complaint based 
upon its view of the “gist of the interveners’ position” and 
its conclusion that the purpose of conciliation agreements 
is to avoid further litigation (Pet. App. D-2). The court of 
appeals correctly found this precipitous disposition 
inappropriate “[i]n light of the recently— expressed deep 
concern [in Alexander v. Gardner-Denver Co., supra, and 
Watkins v. Scott Paper Co., 530 F. 2d 1159 (C.A. 5)] over 
the necessity for establishing voluntariness before finding 
an effective waiver of * * * plaintiffs Title VII rights” 
(Pet. App. A-7). In light of the district court’s peremptory 
disposition, as well as some evidence that respondents 
lacked knowledge of the agreement they signed, the court 
of appeals did not exceed its authority in requiring the 
district court to hold a hearing to determine whether the 
waiver was “knowing and voluntary.” A hearing at which 
the district court can determine the reasons for the 
claimed misunderstanding is not only appropriate for a 
proper initial determination on the waiver issue, but also 
will facilitate any subsequent review by the court of 
appeals or by this Court.

Petitioner claims (Pet. 8), however, that the opinion of 
the court of appeals “would now permit a vast backlog of 
complex conciliation agreements to be reopened on the



5

allegation that a party thereto did not fully understand 
the benefits he or she got, or did not get, under the 
agreement.” This contention rests upon a single sentence 
in the opinion that states “the district court erred in 
dismissing the complaints in intervention * * * without 
* * * holding a hearing to determine whether in fact they 
comprehended the rights they were relinquishing when 
they signed the October 1971 EEOC conciliation 
agreement” (Pet. App. A-7). While the sentence is not 
without ambiguity, it need not, and should not, be read 
out of the factual context of this case in which the 
presence of evidence of misunderstanding was combined 
with precipitous disposition of still undefined claims that 
important rights were invalidly waived. The opinion does 
not require a hearing in every case in which claims are 
made that settlement agreements were not knowing or 
voluntary. If the district court, through discovery, the 
pleading process or other means, had precisely defined the 
claims before it as involving nothing more than a failure 
to comprehend a complex agreement, summary disposi­
tion would not have been improper. The opinion of the 
court of appeals is not to the contrary, and that court’s 
refusal to permit precipitous dismissal of respondents’ 
half-understood claims therefore does not merit further 
review by this Court.

Finally, as petitioner acknowledges, the court of 
appeals’ opinion “fail[s] to set any substantive standards 
for such hearings” (Pet. II). Indeed, the court of appeals 
simply tracks the language of this Court in stating that on 
remand the district court should determine whether “the 
interveners did not knowingly and voluntarily waive their 
rights” (Pet. App. A-7). If the hearing in the district court 
shows no more than a lack of understanding, the district 
court should dismiss respondents’ complaint in interven­
tion in light of the explicit waiver of Title VII rights they



6

signed. Our reading of the record thus far developed 
suggests no reason to anticipate any other result.

3. Our conclusion that neither the court of appeals’ 
decision here nor this Court’s decision in Gardner-Denver 
requires the employer to prove “that each employee 
[actually] understood * * * the conciliation agreement 
which had been negotiated * * * under the close 
supervision of the EEOC” (Pet. App. B-2), does not mean 
that we agree with petitioner that the sole grounds for 
declaring a waiver inoperative would be “fraud or 
substantial wrongdoing by EEOC” (Pet. 6). For example, 
there may well be situations where the ambiguity of 
waiver clauses and the inadequacy of explanations offered 
by attorneys would void a waiver of Title VII rights in the 
absence of claims of fraud or substantial wrongdoing. See 
Watkins v. Scott Paper Co., 530 F. 2d 1159, 1170-1172 
(C.A. 5), certiorari denied, 429 U.S. 861. The courts of 
appeals have not yet had occasion to apply the knowing 
and voluntary requirement to many such claims. The lack 
of cases suggests that there may be little need to consider 
the application of that standard now, before the courts 
have dealt with the question in a variety of circumstances.

This case, moreover, presents the question of the 
appropriate standard for reviewing waiver claims in only 
hypothetical form on the present undeveloped record. The 
court of appeals’ opinion is brief and unspecific; it 
essentially requires the district court to make its decision 
based upon this Court’s language in Gardner-Denver. The 
district court may well reject respondents’ attempt to void 
their waiver, and thereby perhaps eliminate the need for 
further consideration of the issue here. The interlocutory 
posture of the case therefore makes it inappropriate for 
review at this time. Should the district court apply an 
incorrect standard in considering respondents’ claim, 
further appellate review would be available.



7

It is therefore respectfully submitted that the petition 
for a writ of certiorari should be denied.

Wade H. McCree, J r ., 
Solicitor General.

Abner W. S ibal,
General Counsel,

J oseph T. Eddins,
Associate General Counsel,

Beatrice R osenberg,
Assistant General Counsel,

M ary-H elen M autner,
Attorney,
Equal Employment Opportunity Commission.

November 1977.

D O J -1977-11



Supreme Court of the United States 

Memorandum

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