Severance agreements are popular documents for employers interested in reducing their liability during a negotiated separation – and a way of offering a level of assurance that their employees don’t sue. In exchange the employer agrees to avail the exiting employee with an enhanced pay and benefits package. But is the standard language used in many agreements appropriate or even legal? Not in call cases according to the Equal Employment Opportunity Commission, (EEOC).
There have been past court decisions that have found that severance agreements that indicate that an employee cannot file a discrimination charge to be inappropriate. More recently, the EEOC sued CVS Pharmacy Inc because of the language in their severance agreement, highlighted on the Employment and Labor Law Update website.
Language highlighted in the CVS Pharmacy suit as crossing the line includes:
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- A paragraph titled “Cooperation” stating the employee will notify the company if he or she is contacted by an investigator regarding an administrative investigation;
- A non-disparagement clause;
- A prohibition on disclosure of confidential information;
- A general release of claims provision stating the employee gives up “any claim of unlawful discrimination of any kind”; and
- A paragraph titled “No Pending Actions; Covenant Not to Sue” stating the employee represents that he or she has not filed “any complaint” with “any … agency” and will not file such a complaint.
For additional details, visit the Employment and Labor Law Update website.
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