In Equal Employment Opportunity Commission v. CVS Pharmacy, Inc., No. 14-cv-863 (N.D. Ill., February 7, 2014), the EEOC alleged that a severance agreement used by CVS Pharmacy, Inc. (“CVS”) violates Title VII of the Civil Rights Act of 1964 because it is “overly broad, misleading and unenforceable....” According to the EEOC, CVS engaged in a pattern or practice of “resistance” to Title VII rights by utilizing a severance agreement that allegedly “deters the filing of charges and interferes with employees’ ability to communicate voluntarily with the EEOC and [Fair Employment Practices Agencies].”

In its Complaint, the EEOC asserted that, among other things, CVS’s agreement required that employees: 1) notify CVS’s general counsel of any subpoena, deposition notice, interview request or other inquiry concerning any lawsuit or administrative proceeding; 2) agree not to disparage CVS or disclose any confidential information without prior authorization; and 3) agree not to initiate any lawsuit, action, complaint or proceeding asserting any claims released in the agreement, including discrimination claims. Although the agreement contained a provision stating that “nothing in this paragraph is intended to or shall interfere with Employee’s right to participate in a proceeding with any appropriate federal, state or local government agency enforcing discrimination laws,” the EEOC asserted that this “single qualifying sentence that is not repeated anywhere else in the Agreement” does not impact the agreement’s unlawfulness.

CVS has moved to dismiss the suit, asserting that its “run-of-the-mill agreement does not do what the EEOC alleges.” Additionally, CVS and amicus curiae contended that the EEOC does not have the right to bring an action absent an allegation of discrimination or retaliation and that the agency failed to satisfy its statutory obligation to attempt to resolve the case before filing suit. The EEOC has responded that § 707(a) of Title VII, under which the case was filed, “is not limited to acts that are independently actionable as unlawful discrimination and retaliation” and that conciliation efforts are not required under § 707(a). Rather, according to the EEOC, that section requires only that the agency have “reasonable cause.”

CVS is not the only target of the EEOC’s aggressive actions. On April 30, 2014, the agency filed suit in the District of Colorado against CollegeAmerica, alleging that CollegeAmerica violated the Age Discrimination in Employment Act by including unlawful provisions in a separation agreement with one of its former campus directors and retaliated against the former employee by suing her for breach of her severance agreement seven days after learning she filed a discrimination charge. EEOC v. CollegeAmerica Denver, Inc., n/k/a Center For Excellence in Higher Education, Inc., d/b/a CollegeAmerica, Civil Action No. 14-cv-01232 (D. Colo.).

The EEOC’s most recent actions continue a trend of challenges by governmental agencies contesting the validity of basic employer policies on confidentiality, non-disparagement, and similar clauses. The National Labor Relations Board has issued a steady stream of such decisions finding many such policies to be unlawful. Now the EEOC has joined the fray in its recent suits involving severance agreements.