Unpacking the EEOC’s increased scrutiny of severance agreements

Actions against CVS and Baker & Taylor provide a guideline for the EEOC's increased scrutiny of severance agreements

The Equal Employment Opportunity Commission (EEOC) over the years has taken the position that severance agreements should not interfere with employees’ rights to file charges with the EEOC or other fair employment practices agencies (FEPAs). The EEOC in its Strategic Enforcement Plan for FY 2013-2016 warned employers that it was prioritizing this outlook, stating that it intended to “target policies and practices that discourage or prohibit individuals from exercising their rights under employment discrimination statutes, or which impede the EEOC’s investigative or enforcement efforts. These policies or practices include … settlement provisions that prohibit filing charges with the EEOC or providing information to assist in the investigation or prosecution of claims of unlawful discrimination.”

True to its stated intentions, the EEOC has stepped up its enforcement efforts in the area of severance agreements. In February 2014, the EEOC sued CVS, the nation’s largest integrated provider of prescriptions and health-related services, alleging that CVS’s severance agreement — which was signed by over 650 employees — was overly broad and interfered with employees’ rights to file charges and/or communicate and cooperate with the EEOC under Title VII of the Civil Rights Act of 1964.

Contributing Author

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Jill Vorobiev

Jill Vorobiev is a member of Dykema's Labor and Employment Group, with an emphasis on labor and employment litigation. Her practice covers a broad-base, representing corporate clients...

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