Separating the Good from the Bad in Separation Agreements


By: Jennifer Miller 
In its 2013-2016 Strategic Enforcement Plan, the Equal Employment Opportunity Commission (“EEOC”) listed “preserving access to the legal system” as one of its priorities.   Drugstore chain CVS is currently feeling the effect of this priority.  On February 7, the EEOC sued CVS claiming that CVS’s separation agreements, which had been signed by hundreds of former CVS employees, violated Title VII of the Civil Rights Act of 1964.
Most employers are familiar with Title VII’s prohibition against discrimination, harassment, and retaliation.  What employers may not know, however, is that Section 707 of Title VII prohibits employers from engaging in “a pattern or practice of resistance to the full enjoyment of any rights secured” by Title VII, which, includes the right to file charges of discrimination with the EEOC.   The EEOC claims that, since at least August 2011, CVS has violated this section of Title VII by “conditioning the receipt of severance benefits on FLSA exempt non-store employees’ agreement to Separation Agreements that deters the filing of charges and interferes with employees’ ability to communication voluntarily” with the EEOC.   More specifically, the EEOC appears to object to numerous provisions in CVS’s five-page single spaced separation agreements, including provisions by which employees agree to release “any claim of unlawful discrimination of any kind” and “not to initiate or file, or cause to be initiated or file, any action, lawsuit, complaint or proceeding.”
As this suit was only recently filed, much is still to be learned about the interplay between Section 707 of Title VII and separation agreements, but, in the meantime, employers should make sure that their separation agreements are carefully drafted so they cannot be seen as prohibiting former employees from filling charges or communicating with the EEOC.
If you have any questions about how to create or revise a separation agreement, please contact any of the attorneys in our Labor and Employment practice group.