EEOC challenges “garden-variety” severance terms

by Walter Olson on March 17, 2014

To end an employment lawsuit, or more often simply as part of a non-litigious parting, employers often offer a severance package part of which consists of various terms releasing all claims and covenanting not to sue, requiring confidentiality and cooperation in the case of future litigation, and so forth. Now, in a lawsuit against CVS, the Equal Employment Opportunity Commission is taking the position that many such clauses constitute “retaliation” for protected activity and are legally invalid. Jon Hyman of Ohio Employer’s Law Blog notes that the clauses under challenge are generic ones widely used in severance packages and explains why in his view the “case has the potential to be most significant piece of litigation the EEOC has filed in recent memory.” Daniel Schwartz at Connecticut Employment Law Blog also calls the suit “a big deal: “My gut tells me that the courts are not likely to view the government’s arguments with favor. … But for employers, that is of little solace.” More: Ameet Sachdev/Chicago Tribune (“the EEOC brought the suit even though CVS expressly protected employees’ rights under discrimination laws”), Joshua Feinstein, JD Supra (“the potential for havoc is great”), Hope Eastman/Paley Rothman (“a major shock to employers”)

{ 2 comments }

1 DEM 03.17.14 at 2:22 pm

Gee, I wonder if extensive government regulation of the workplace, combined with the aggressive and creative enforcement of same by legions of government lawyers with nothing better to do, is in any way related to our prolonged slump in employment? Nah, couldn’t be.

2 Jazzizhep 03.17.14 at 2:40 pm

I don’t see why one would think the EEOC is treading new ground in the above instance. The Federal government already steps in and sets terms for employment contracts because the gov’t can’t allow the employee and employer to decide willy-nilly what the conditions for employment should be. Why should termination of employment contracts be any different?

/sarc

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