McClellan v. Midwest Machining, Inc., No. 17-1992 (6th Cir. 2018)Annotate this Case
In 2008, Midwest hired Plaintiff. In 2015, Plaintiff informed Midwest that she was pregnant. Plaintiff claims her supervisor made negative comments and was annoyed by Plaintiff’s absences for pre-natal appointments. About three months later, Plaintiff was terminated “[d]espite … no record of discipline.” Plaintiff testified that Midwest’s president presented Plaintiff with an agreement and said that she “needed to sign then if [she] wanted any severance,” that she felt bullied and signed the agreement, which provided that Plaintiff would waive “any and all past, current and future claims” against Midwest. Plaintiff later stated that she assumed that "claims" referred to unpaid wages or benefits. Midwest paid and Plaintiff accepted $4,000.
Plaintiff filed a charge with the EEOC, then filed suit, alleging that Midwest terminated her because of her pregnancy, that Midwest has a sex-segregated workforce, and discrimination in compensation, citing Title VII, 42 U.S.C. 2000e; the Pregnancy Discrimination Act, 42 U.S.C. 2000e(k); 42 U.S.C. 1981a; Michigan's Elliot-Larsen Civil Rights Act; and the Equal Pay Act, 29 U.S.C. 206(d). After filing, Plaintiff returned the $4,00, saying that she was “rescinding the severance agreement.” The Sixth Circuit reversed summary judgment entered in favor of the Defendant. Under the tender-back doctrine, contracts tainted by mistake, duress, or even fraud are voidable at the option of the innocent party if the innocent party first tenders back any benefits received; if she fails to do so within a reasonable time after learning of her rights, she ratifies the contract. The doctrine does not apply to claims under Title VII and the Equal Pay Act.