The EEOC has a pending lawsuit against CVS claiming that a severance agreement is overly broad, misleading and unenforceable. The agreement is attached to the lawsuit here. Truth is, the severance agreement is familiar and the contested language common. I would bet that if you compared the CVS agreement on your second screen now with the one you use, you would notice many of these common characteristics the EEOC now challenges.
- A Cooperation Clause – requiring notification of lawsuits and administrative investigations.
- A Non-disparagement Clause – prohibiting disparagement of the company or its employees.
- Non-disclosure of Confidential Information – employee agrees not to disclose or use information about personnel including wages, benefits, skills and plans.
- A General Release of All Claims – this includes a recitation of a release of all clause of action, lawsuits and includes claims of unlawful discrimination.
- No Pending Action: Covenant Not to Sue – the employee agrees not to bring a claim/cause of action and represents he/she does not have one.
- Breach – Allowing for remedies including injunctive relief and attorney’s fees should an employee breach the agreement.
Disclaimer: The CVS agreement also stated, within the covenant not to sue, that “nothing was 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, nor shall this agreement prohibit employee from cooperating with any such agency in its investigation.”
Despite the disclaimer, which seems to have been sufficient with the EEOC in the past and blessed by the very same District, the EEOC is now pursuing the case claiming there is a pattern and practice of denial of full Title VII rights.
Recommendations Based on What is Known: Make sure there is clear disclaimer language that applies to the entire context of the situation. Specifically, make sure that the employee’s right to communicate with the government is without question.
For example, in the recitals and following all of the agreements, it should be reiterated that nothing within the agreement prevents the employee from communicating with any federal agency or filing a charge with any such agency. If the employee is represented by counsel, have the employee affirm he/she has discussed her rights with counsel and fully understands them. I would also recommend an affirmative statement that the employee is not aware that the company has violated her rights or the rights of others other than those alleged and being released. Also, with regard to communications, generally—especially non-disclosure/non-disparagement—try to prepare provisions that do not interfere with the NLRB’s perception of concerted activity. You can find that here.