Employers like separation agreements. Separation agreements, of course, are contracts that employees sign when their employment is terminated that allows them to be paid severance and in exchange they usually give up the right to sue their employer. Separation agreements provide finality to employment terminations by offering employers protection from claims and potential claims. The agreements many employers use are often standardized and have served them well for years. But now might be the time to take another look at those documents, lest the Equal Employment Opportunity Commission (“EEOC”) looks first.
Recently, the EEOC has aggressively asserted its (re)interpretation of the law regarding the enforceability of separation (severance) agreements, suing several companies for using what it perceived to be overly broad agreements. See, EEOC v. CVS Pharmacy, Inc. no. 1:14-cv-00863 (N.D. Ill. 2014); see also, EEOC v. CollegeAmerica Denver, Inc., no. 14-cv-01232-LTB (E.D. Co. 2014). The EEOC doesn’t like separation agreements that do not make it sufficiently clear (in the EEOC’s opinion) that employees do not waive the right to file charges with the EEOC or participate in agency investigations, even though the employee can waive claims for damages under the statutes the EEOC enforces like Title VII or the Americans with Disabilities Act (“ADA”). In the CVS Pharmacy and CollegeAmerica cases, the EEOC alleged the employers’ separation agreement forms constituted a “pattern or practice” of denying employees their statutory rights. (“Pattern or practice” is significant because such cases can carry much higher penalties than a run-of-the-mill lawsuit; they can also inspire class-action lawyers to start snooping around.)Continue Reading EEOC’s Tough Stance on Employee Separation Agreements
Most competent employment lawyers with experience pursuing and/or rebuffing enforcement of noncompetition agreements know that enforcement against low level workers is highly unlikely. If recent news reports are true, Jimmy John’s apparently never got that memo.
Most people understand that employment in Oregon, as in most states, is at will, meaning that either the employer or the employee can end the relationship at any time for any reason or no reason at all, absent a contractual, statutory, or constitutional requirement to the contrary. Of course, that last clause provides that there are limits on at-will employment. An employer can’t end the relationship because the employee becomes disabled, needs to fulfill duty obligations in the armed forces reserves, files a complaint against the employer, or a myriad of other unlawful reasons. Some plaintiff’s lawyers would argue that the at-will employment doctrine is so riddled with exceptions that it doesn’t really exist. And good employer defense attorneys will advise their clients that, while the doctrine still exists, every termination should be supported by clear, legitimate business reasons – and ideally with good documentation. But it is clear that no employee can have a reasonable expectation of continued employment, since he or she could be fired at any time. But what about an applicant?
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