Most of us are familiar with severance agreements. Typically, a company decides to downsize and offers departing employees some kind of financial package in exchange for their silence and pledge not to divulge proprietary information. Usually, these severance agreements include an agreement on behalf of the departing not to file an employment lawsuit. Recently, however, the Equal Employment Opportunity Commission (EEOC) has filed suit against one very popular company and the lawsuit revolves around their severance agreement.
The EEOC filed suit against well known pharmacy chain CVS alleging that their severance agreements are overly broad, interfering with the employee’s right to file complaints with them.
Human resource experts are referring to this lawsuit as a landmark one since the wording in CVS’s agreement is found in virtually all companies’ pacts. The Agency said the drug store’s, “five page single spaced Separation Agreement…deters the filing of charges and interferes with the employees’ ability to communicate voluntarily” with federal agencies.
The EEOC cited six specifics within the severance agreement that they felt were too vague. These were found under headings titled: Cooperation, Non-Disparagement, Non-Disclosure of Confidential Information, General Release of Claims, No Pending Actions, & Employment Breaches.
Hidden within the document is a statement that says:
“[n]othing 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, nor shall this Agreement prohibit Employee from cooperating with such agency in its investigation.”
This small disclaimer was not enough to appease the EEOC though, who are requesting that CVS stop using the separation agreement altogether and wants to order them to institute policies informing employees of their rights. Furthermore, the EEOC would like CVS to create a 300-day window for former employees who were subject to this agreement to allow them to file a charge of discrimination, requiring CVS to cover legal costs.
CVS has yet to respond to the lawsuit.