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An employee's Separation Agreement supersedes and replaces an earlier Dispute Resolution policy, where the Separation Agreement satisfies the Dispute Resolution Policy's explicit modification requirements, according to the Northern District of Illinois.
In Liebl v. Mercury Interactive Corp., No. CIV A 06 C 5364, 2006 WL 3626764 (N.D. Ill. Dec. 12, 2006), Liebl was terminated from his position at Mercury Interactive Corporation (MIC) and sued for damages arising from MIC's alleged refusal to allow him to exercise stock options. MIC moved to stay proceedings pending arbitration, which was provided for in a Dispute Resolution Policy.
The Court denied the motion to stay proceedings, finding that the arbitration provisions were no longer in effect. Liebl and MIC signed a Separation Agreement prior to Liebl's formal separation, and this subsequent agreement did not contain arbitration provision. Moreover, the Separation Agreement waived and released all of MIC's obligations to Liebl, including those in the Dispute Resolution Policy. See Acme-Wiley Holdings, Inc. v. Buck, 799 N.E.2d 337 (Ill. App. Ct. 2003) (holding that a separation agreement containing a general release supersedes an original employment agreement).
The Dispute Resolution Policy provided that it could be modified or amended by a writing signed by the party to be charged. Since the Separation Agreement satisfied these requirements, the Dispute Resolution Policy was no longer in effect, and Liebl was not required to submit his claims to arbitration.
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