Employers Take Heed – EEOC Scrutinizing “Standard” Severance And Settlement Agreements
From the article:
Several recent EEOC lawsuits, one filed in the Northern District of Illinois and another very recently filed in the District Court of Colorado, suggest an emerging trend that may have broad reaching impact on what has been considered standard, enforceable language in severance and settlement agreements. Specifically, the agency has recently challenged commonplace general release language, confidentiality provisions and non-disparagement clauses, arguing that they unlawfully chill employees’ right to file a charge of discrimination and communicate with the EEOC – even if such agreements include a disclaimer that the employees may still file a charge notwithstanding the release.
In the pioneer case – filed against CVS Pharmacy, Inc. (“CVS”) in the Northern District of Illinois – the EEOC challenges CVS’s form separation agreement, despite the fact that the agreement explicitly contains language notifying the employee that nothing in the agreement is intended to “interfere with Employee’s right to participate in a proceeding with any appropriate federal, state or local government agency enforcing discrimination laws, nor shall this [a]greement prohibit Employee from cooperating with any such agency in its investigation.” Nevertheless, the EEOC concluded this was not sufficient – focusing on the fact that the disclaimer was only stated once in the agreement. The EEOC has gone even further – taking the position that commonplace confidentiality agreements and non-disparagement provisions somehow prevent employees from communicating with the EEOC about allegations of workplace discrimination. Based on the foregoing, the EEOC argues that CVS’s form agreement amounts to a “pattern and practice” of interfering with the employees’ right to file discrimination charges or communicate with the EEOC. This is an unsettling development in that many employers incorporate similar language in their standard separation and settlement agreements with the understanding that this approach comports with already settled law.
Filed under: General Problems
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