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did not intend to settle claims arising out of the course of
employment, such as emotional distress experienced while working.
However, since petitioner’s termination can potentially be viewed
as a culmination or outgrowth of the purported discrimination and
consequent negative performance reviews, we decline to base our
resolution of this matter on a restrictive interpretation of the
above-quoted phrase.
The designation of the program under which the release was
signed as the “Enhanced Severance Plan” is likewise indicative of
intent. The inference from this choice of terminology is that
PSC management viewed as severance pay that which was received by
petitioner in exchange for signing the waiver. Severance pay, in
turn, has been defined by this Court as “an allowance usually
based on length of service that is payable to an employee on
termination of employment.” Webb v. Commissioner, T.C. Memo.
1996-50. The fact that petitioner’s payment was calculated using
a formula of 2-1/2 weeks of pay per year of service is thus
consistent with and further evidences an intent to remit
severance pay, rather than to compensate for personal injuries.
With respect to setting, the surrounding circumstances in
this case also tend to weigh against characterizing petitioner’s
payment as compensation for personal injuries and in favor of
seeing the funds as severance pay. The parties engaged in no
meetings or negotiations concerning petitioner’s participation in
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