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EEOC Files A Lawsuit Challenging Waiver Language Found In Most Severance Agreements

The Equal Employment Opportunity Commission (“EEOC”) recently filed a lawsuit in federal court in Chicago, EEOC v. CVS Pharmacy, Inc., No. 1:14-CV-00863 (N.D. Ill. 2014), challenging the legality of provisions that employers routinely include in severance agreements.  In the suit, the EEOC contends that such agreements could improperly “deter” employees from filing discrimination charges or participating in an EEOC investigation by including clauses such as:

  • a “cooperation” provision requiring the employee to notify the company if he or she is contacted by an investigator regarding an administrative investigation;
  • a “non-disparagement” clause;
  • a provision prohibiting disclosure of “confidential information”;
  • a provision stating the employee gives up “any claim of unlawful discrimination of any kind”; and
  • a “no pending actions; covenant not to sue” provision in which the employee represents that he or she has not filed “any complaint” with “any . . . agency” and will not file such a complaint, even where the paragraph specifically acknowledges that nothing in the agreement prohibits the employee from participating in an EEOC proceeding or investigation.