Labor & Employment Law Daily Wrap Up, DISCRIMINATION—6th Cir.: Former Mercedes-Benz finance employee released discrimination claims in severance agreement, (Feb 5, 2025)

By Jason Albright, J.D.

While working for Mercedes-Benz Financial Services in India, she had accepted a position in Singapore set to start in March 2020.

A former second-level finance manager who took a buyout from Mercedes-Benz Financial Services USA, LLC, in 2020—after she was sent back to the United States following an assignment in India and conflict with her supervisors—cannot revive her race and age discrimination or retaliation claims against the company, the Sixth Circuit determined in an unpublished opinion. The former manager knowingly and voluntarily waived her right to bring employment-discrimination claims against the company in her severance agreement with it, the appeals court found. In addition, her request for declaratory relief likewise failed as a matter of law, and the district court below did not err when it denied her motions for additional discovery (Jamil v. Mercedes-Benz Financial Services USA, LLC, No. 24-1481 (6th Cir. Feb. 4, 2025, unpublished)).

L3 manager. The plaintiff, according to the court, began working for the predecessor of Mercedes-Benz Financial Services (MBFS) in 1998. Over the years, she climbed the corporate ladder, moving from collections to management. From 2007 to 2011, she worked as a first-level manager, otherwise known as an L4. Then in 2011, she began a series of expatriate positions with other affiliated entities, eventually moving up to L3.

India credit risk position. These positions took her to Brazil, China, Singapore, and then in 2018 and 2019, to India. There, she worked as head of credit risk management for Daimler Financial Services (DFS) India and reported to its director of regional credit operations for Africa/Asia/Pacific. And while in India, she accepted a position in Singapore, which was set to start in March 2020.

Conflicts with supervisors. But she and her supervisors “butted heads,” according to the court. She did not want to fund certain Indian automobile dealerships, because she did not believe the dealers would repay any loans. The director of regional credit operations disagreed, confident the dealers would pay them back and convinced that company policy required the plaintiff to approve the funding.

Back to the U.S. Because the finance manager refused to provide credit to these dealerships, in December 2019, the director decided to send her back to the United States, effective May 2020. In the meantime, the director shifted the finance manager’s responsibilities to other executives. And around the same time, she cancelled the finance manager’s upcoming position in Singapore, which the finance manager attributed to the funding dispute and DFS moving the position to Germany. The director also informed her that no L3 positions would be available upon her repatriation but suggested that there may be an open L4 position or a possible separation package instead.

Return discussions. In early 2020, the finance manager and MBFS’s HR director started to discuss her return. The HR director told her that there were no available L3 or L4 positions, but that she could help her find a position. In March 2020, however, MBFS advised her that she could either find a new position by August 31, 2020, or accept a severance agreement. And the HR director never helped her find a new position.

Severance agreement. The finance manager thereafter negotiated a severance agreement with MBFS, which she signed in July 2020. It allowed her to remain on MBFS’s payroll as an inactive employee until May 31, 2021, when she became eligible for retirement benefits. In exchange, she agreed to release MBFS from “all claims, demands, actions, causes of action, suits, liabilities, interest, attorneys’ fees, damages, or costs of any nature whatsoever, express or implied, that [she] may have, or have had,” including “all claims under any employment practice law and civil rights acts (including but not limited to Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Family and Medical Leave Act, and the Americans with Disabilities Act, and any similar state laws).”

Lawsuit. Then she sued MBFS, alleging that it discriminated against her because of her race and age, and retaliated against her, in violation of Title VII, the ADEA, and the Michigan Elliott-Larsen Civil Rights Act. She also brought breach-of-contract and declaratory-judgment claims against MBFS.

Discovery. After the district court granted MBFS’s motion to dismiss the breach-of-contract claim, discovery commenced and she sought to depose MBFS’s corporate representative before any other depositions took place but MBFS objected. This dispute lasted several months, and only two depositions took place—MBFS’s corporate representative on December 21, 2023, and the plaintiff on December 28.

Then, on December 20, 2023, the former finance manager noticed 14 additional depositions. MBFS opposed the notices for several reasons, including the looming discovery deadline and the “major holiday period.” The plaintiff then moved to extend the discovery deadline and to compel the depositions.

Summary judgment for MBFS. After the discovery deadline, MBFS again moved for summary judgment, and the district court granted its motion. It also denied the former finance manager’s pending discovery motions as moot, and later denied her motion for reconsideration.

She timely appealed to the Sixth Circuit.

Release of discrimination claims. The appeals court first found that the undisputed facts showed that the former finance manager knowingly and voluntarily waived her right to bring employment-discrimination claims against MBFS. To determine whether a release was knowingly and voluntarily executed, the Sixth Circuit explained, it assesses “(1) plaintiff’s experience, background, and education; (2) the amount of time the plaintiff had to consider whether to sign the waiver, including whether the employee had an opportunity to consult with a lawyer; (3) the clarity of the waiver; (4) consideration for the waiver; as well as (5) the totality of the circumstances.”

The court found that the first factor weighed in the employer’s favor in light of the former finance manager’s bachelor’s degree, master’s degree in business administration, master’s degree in Near Eastern languages, post-graduate certificate in management information systems, and experience of more than 10 years working as a finance executive and then working with “legal” while in India in 2018 and 2019.

The second and third factors also favored MBFS because it gave her four and a half months to consider the severance agreement, far exceeding time periods the Sixth Circuit has found sufficient to consider such agreements, and the severance agreement was clear. It unambiguously stated that she “knowingly and willingly releases and forever discharges [MBFS]... from any and all claims... under any federal, state or local law... including... Title VII [and the ADEA].”

The fourth factor also favored MBFS. In exchange for signing the release and waiving her discrimination claims, the former finance manager received approximately $354,000—18 months’ salary. And she did not attempt to argue that this consideration was disproportionate or unfair.

Finally, the totality of the circumstances favored the employer. Though while MBFS’s HR department may have overstated the company’s financial difficulties, the record showed that the finance manager “signed the contract with her eyes wide open,” according to the Sixth Circuit. She knew at the time that there were no positions available for her, but that such positions were available to others. The key inquiry here was whether her release of claims was knowing and voluntary, and she voluntarily signed the agreement with full knowledge.

Thus, the appeals court concluded, the district court did not err in granting summary judgment to MBFS.

Discovery motions. The district court also did not err in denying the former finance manager’s motion to extend the discovery deadline and her motion to compel discovery as moot. The discovery she sought—about the availability of L3 and L4 positions—would not have changed the district court’s summary judgment decision because she had been informed that those positions were unavailable. She was aware when she signed the severance agreement that MBFS had been filling L3 positions and was blocking her from such positions. She also lacked diligence in her discovery efforts, according to the appeals court, and MBFS did not miss any discovery deadlines, fail to turn over critical documents, or fail to respond to her discovery requests.

In short, because none of the pertinent factors supported the former finance manager, the district court did not abuse its discretion in denying her motions to extend the discovery deadline and to compel discovery.

Declaratory relief. Finally, because her substantive claims failed, her request for declaratory relief failed as a matter of law.

The case is No. 24-1481.

Judge: Mathis, A.

Attorneys: Carla D. Aikens (Law Offices of Carla D. Aikens) for Asmaa Jamil. Sonja L. Lengnick (Kienbaum Hardy Viviano Pelton & Forrest) for Mercedes-Benz Financial Services USA, LLC.

Companies: Mercedes-Benz Financial Services USA, LLC

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