Race Discrimination Claims Survive; Not Barred By Release of Wage & Hour Claims

In Rodrigues v. Watershed Ventures LLC, 2018 N.Y. Slip Op. 30322(U), 2018 WL 1030303 (N.Y. Sup. Ct. Feb. 23, 2018), the court held, inter alia, that a release agreement relating to plaintiff’s claims, asserted in a separate federal court action, was not broad enough to preclude his race discrimination claims.

From the Decision and Order:

[T]he release, read broadly according to its terms, precludes all claims related to any wage and hour claim that had been or could have been asserted under New York State law. Defendants cite no authority for the proposition that a claim of discrimination relates to a “wage and hour” claim.

While defendants urge that the release is broad enough to preclude plaintiffs from bringing any claim against them related to their employment, such a broad release is routinely disapproved by the federal district courts in the Second Circuit in FLSA. (See Lopez v Nights of Cabiria, LLC. 96 F Supp 3d 170, 181 [SD NY 2015] [rejecting proposed settlement of FLSA claim where release contained provision for waiver of any possible claim including those unrelated to wage-and-hour issues; disapproving use of FLSA settlements “to erase all liability whatsoever in exchange for partial payment of wages allegedly required by statute.”]).

Indeed, it is common practice in the Second Circuit for parties to enter into two settlement agreements, one addressing FLSA claims and the other addressing non-FLSA claims, such as discrimination claims, thereby warranting the inference that wage-and-hour claims and **4 discrimination claims are mutually exclusive. (See e.g., Santos v Yellowstone Props., Inc., 2016 WL 2757427 [SD NY 2016] [where parties agreed to two releases, one for wage-and-hour claims and one for discrimination claims, general release governing discrimination claim appropriate in resolving non-wage-and-hour claims, but not appropriate in wage-and-hour release]; see also Rodriguez v 3551 Realty Co., 2017 WL 5054728 [SD NY 2017] [proposed FLSA settlement agreement contained invalid provisions, including release of claims arising from National Labor Relations Act, Title VII, and Americans with Disabilities Act]).

As the release in issue here limits its impact to those related to wage-and-hour claims, and absent any authority for the proposition that a discrimination claim is related to a wage-and-hour claim, and in view of the policy against permitting such a release to preclude a discrimination action, defendants fail to establish that plaintiffs’ discrimination claims are barred by it.


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