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Wal-Mart v. Coughlin

On Nov. 3, 2005, I wrote:

One can understand why Wal-Mart is upset that a former executive, Tom Coughlin, allegedly swiped a half-million dollars, and wants to stop paying him in addition to referring the matter to federal prosecutors. But one doesn't understand why Wal-Mart, in an effort to recover a fairly small sum, is arguing to the court that it should disregard the mutual waiver and release that Coughlin signed with Wal-Mart when he left the job. Surely the corporation would be better off on the whole with a legal rule that strictly enforces releases than one that judges the validity of a release on a case-by-case basis.

(See also.) Coughlin has since pled guilty to fraud, was sentenced to 27 months of home confinement, and ordered to pay $400,000 restitution. Yesterday, the Arkansas Supreme Court unanimously held that that Wal-Mart's suit to recover retirement benefits can go forward on a theory that the release was fraudulently induced, notwithstanding the language in the release that both parties waived all claims, "known and unknown." (cross-posted at Overlawyered)



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.