Elizabeth McLeod v. General Mills, Inc.
856 F.3d 1160
8th Cir.2017Background
- General Mills terminated ~850 employees in 2012 and offered severance in exchange for signed release agreements that waived all claims related to termination, including ADEA claims, and required individual arbitration for disputes “relating to” the releases.
- Thirty-three former employees signed releases, sued under the ADEA, and sought (1) a declaratory judgment that their ADEA waivers were not "knowing and voluntary" under 29 U.S.C. § 626(f) and (2) collective and individual ADEA relief.
- General Mills moved to compel individual arbitration and to dismiss; the district court denied the motion.
- The Eighth Circuit reviewed arbitrability de novo, analyzed whether the FAA compels arbitration absent a “contrary congressional command,” and considered whether § 626(f)(3)’s language requires waiver-validity disputes to be resolved in court.
- The panel concluded there was no congressional command barring arbitration of the substantive ADEA claims, but dismissed the declaratory-judgment claim for lack of Article III jurisdiction (it was hypothetical and not yet threatened by enforcement).
Issues
| Issue | Plaintiffs' Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitration clause covers substantive ADEA claims | Arbitration clause applies only to disputes "relating to" the release, not to substantive ADEA claims | The clause covers any claim "relating to" the release and expressly includes "the assertion of any claim covered by the release" | Held: Clause covers substantive ADEA claims and compels individual arbitration |
| Whether § 626(f) creates a "contrary congressional command" preventing arbitration of substantive ADEA claims | § 626(f) forbids waiving ADEA rights; requiring proof of waiver "in a court of competent jurisdiction" means waiver validity must be decided in court, not arbitration | 14 Penn Plaza and statutory structure show arbitration is procedural choice and does not waive substantive ADEA rights; § 626(f) does not override the FAA | Held: § 626(f) is not a contrary congressional command; FAA requires enforcement of arbitration for substantive ADEA claims |
| Whether § 626(f)(3) mandates that challenges to whether a waiver was "knowing and voluntary" be resolved in court (not arbitration) | The phrase "shall have the burden of proving in a court of competent jurisdiction" requires court resolution of waiver-validity questions | That provision addresses proof allocation but does not transform procedural rights (trial forum) into non-waivable substantive rights; analysis requires jurisdictional and Article III review | Held: Court lacked Article III jurisdiction over the plaintiffs’ declaratory-judgment challenge to waiver validity because it was hypothetical; the panel did not decide whether § 626(f)(3) categorically forbids arbitration of waiver-validity disputes |
| Whether the district court had Article III jurisdiction over the declaratory-judgment claim that waivers were not "knowing and voluntary" | Plaintiffs argued an actual controversy exists over the validity of the waivers now | General Mills had not threatened enforcement; the claim was contingent on a future assertion of waiver by General Mills | Held: No Article III case or controversy—dismiss declaratory-judgment claim for lack of jurisdiction |
Key Cases Cited
- 14 Penn Plaza LLC v. Pyett, 556 U.S. 247 (2009) (an agreement to arbitrate ADEA claims does not waive the substantive statutory right against age discrimination)
- MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007) (requirements for a justiciable declaratory-judgment case or controversy)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing and imminence requirements for Article III)
- Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165 (1989) (§ 216(b) collective-action mechanics and authorization)
- Calderon v. Ashmus, 523 U.S. 740 (1998) (no case or controversy where declaratory relief seeks resolution of a hypothetical defense that may be raised in future proceedings)