Mutual mistake helps ex-employee's bias, retaliation claims avoid dismissal

If a terminated employee signs a contract releasing all claims against you, she can't sue you, right? Wrong. A new Missouri Court of Appeals decision illustrates the effect a mutual mistake by the parties can have on the enforceability of the release. Read on to learn how Missouri courts analyze the issue.

Facts

From 2001 to 2018, Ann McGruder was employed by a Missouri university. In 2016, she began working in the university's school of medicine as an associate director of administration. She was then terminated as part of a departmental reorganization. While in her position with the medical school, she alleges she was subjected to age and sex discrimination and retaliation.

Afterward, McGruder was offered the opportunity to participate in the university's layoff and transition assistance program, which provides severance pay and certain employee benefits. She refused to take part because the program required her to sign a contract releasing any claims she had against the university, including for discrimination and retaliation.

In January 2018, McGruder accepted a position with a not-for-profit foundation physically located within the university. The foundation is neither owned nor controlled by the university, but it outsourced its payroll and benefits administration to the school. She was employed exclusively by the foundation and paid exclusively from its funds.

In July 2018, McGruder filed a discrimination charge, claiming she had been discriminated against based on age and sex and that she had been a victim of unlawful retaliation by the university.