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Total Articles: 7

Federal Court Dismissal of EEOC Suit Leaves Employers Hanging

In a closely watched ruling, an Illinois federal district court handed a victory to one particular employer, but ducked a broader ruling that would have provided general guidance to companies generally that are trying to avoid litigation by entering into severance agreements with employees.

The EEOC's Frontal Assault on Severance Agreements

Employers routinely offer departing employees separation agreements, whether as part of a reduction in force or in connection with an individual termination. These separation agreements typically include enhanced monetary benefits in exchange for a broad release of claims and promises not to sue.

Releases of Liability: Do's and Don't's for Employers

Employers often use waivers and releases of claims in agreements with former employees, either as part of a separation agreement at the time employment ends or in a settlement agreement after a former employee has raised claims against the employer. Both of these types of agreements have garnered attention lately, serving as a reminder of some best practice approaches in each context.

EEOC Lawsuit Challenges Commonly Used Language In Severance Agreements

On February 7, 2014, the Equal Employment Opportunity Commission (EEOC or Commission) sued CVS Pharmacy Inc. in federal court in Chicago to invalidate the company’s standard severance agreement. The lawsuit raises concerns because it attacks language that employers commonly use in severance agreements.

EEOC Files Suit Against Book Distributor for Overbroad Severance Agreement Language

Just weeks after settling its first ever Genetic Information Nondiscrimination Act (“GINA”) discrimination lawsuit and filing its first ever class action lawsuit under GINA, the Equal Employment Opportunity Commission (EEOC) continued its flurry of litigation this year by filing suit against national book distributor Baker & Taylor in the Northern District of Illinois. The EEOC’s Complaint accuses the North Carolina-based company of violating Title VII by forcing departing employees to sign unlawfully “broad, misleading and unenforceable” agreements to receive severance payouts. Absent from the Complaint is any indication that Baker & Taylor actually interfered with any employee’s rights.

Fifteen minutes may be adequate time to review employment separation agreement.

The 3d U.S. Circuit Court of Appeals has held that 15 minutes was a sufficient amount of time for the plaintiff, a public school teacher, to review a separation agreement and release negotiated in connection with her resignation. Gregory v. Derry Twp. Sch. Dist., 2011 WL 944424 (3d Cir., March 21, 2011)

Do-It-Yourself Releases? Not So Fast....

Employers are increasingly using release agreements to avoid litigation with terminated employees. In fact, some employers are so comfortable with preparing their own releases that they fail to involve counsel to review each release they prepare. But the increased use of release agreements has spawned a new wave of litigation over the elements of an effective release. In some noteworthy cases, releases used by large, multi-national corporations have been declared to be invalid and unenforceable. So, think twice before you go the “do-it-yourself” route.
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