1. FACTS-Widener andMozumderwere employed as geophysicists byArcoOil and Gas Co. On March 31, 1986, both employees were notified by letter that they were being placed on "surplus"statuswhichmeant that if they were not placed in another position in the company during the next sixty days, their employment would be terminated. Ontermination, they would become eligible for benefits, including lump-sum allowancepayments, under either of two company termination and retirement programs. To be eligible for payments under either plan, the employees were required to sign release documents. The employees were given informational packets outlining each plan in detail andadvisingthe employees to contact the company's benefits specialist, Barbara Hough, about which plan they wished to elect. The employees went to Hough's office and signedvariousdocuments, among which was a general release that read, in part: "I release anddischargethe Company ... from all claims, liabilities, demands, and causes of action known or unknown, fixed or contingent, which I may have or claim to have against the Company as a result of this termination and do hereby covenant not to file a lawsuit to assert such claims." After signing the release, each employee received a lump-sumpayment. When the employees later suedArco, alleging wrongful discharge on the basis of agediscrimination,Arcoclaimed that the release document signed by the employeesreleasedit from any liability. The employees contended that they had not voluntarily and knowingly given the releases. The release document was confusing because it was not entitled a release, and Hough had never informed them of the significance of what they were signing. She only told them that they had to sign the various documents before they left. The court held that the releases were valid and grantedArco'smotion for summary judgment.
2. ISSUES-Widener andMozumderwere apparently genuinely surprised to learn that one of the documents that they had signed was a release. In view of their apparent "innocence" in this regard, is it fair that they should be held to what they promised in the release document?If the two employees had not been highly educated men, would your answer to the above question be different?A recurring problem in the area of contract law is that innocent partiessometimessuffer harmful consequences because they failed to read what they were signing. A general ethical principle underlying the law is that people should be held responsible for their own actions. But the law also seeks to prevent one party from taking undue advantage of another. How well do you think the courtbalancedthese two fundamental ethical policies in its decision in this case? Would you have held differently if you had been the judge?Why?Companies seeking to reduce or replace personnel frequently offer specialretirementor termination benefits to induce employees to retire early or voluntarily terminate their employment. A company frequently will alsorequestasArcodid in thiscasethatthe departing employees, in consideration for terminationbenefitsreceived, sign release forms in which they promise not to hold the companyliablefor any future claims that the employees may have against the company. Is this practice in any way unethical?
3. RESOLUTION-[Widener v.ArcoOil and Gas Co.,717 F.Supp. 1211 (N.D.Tex. 1989)] How did the court answer the questions?What did the court decide?
4. EXPLANATION-Do you agree with the court?Why or why not?Can you change any facts to give a different result?