Organizations that pay employees severance not otherwise owed under policy or prior agreement, often require employees to sign a separation agreement releasing all claims against the employer in exchange for the severance. Because of prior challenges to such agreements by the EEOC, those separation agreements now include a specific provision protecting employees' right to file EEOC charges and participate in EEOC investigations. While the EEOC has blessed (or arguably required) such provisions in the past, a recent wave of lawsuits filed by the EEOC signal it now wants more.
Over the last year, the EEOC has filed three lawsuits against companies challenging the validity of their separation agreements. The EEOC has challenged a:
Non-disparagement clause that prohibits employees from making disparaging remarks about the employer, its officers, directors and employees or remarks that could damage the reputation and goodwill or reflect negatively on the employer
Cooperation clause that requires employees to promptly notify the company's general counsel of contacts related to an "administrative investigation;"
Confidentiality clause that prohibits employees from disclosing confidential employee or other information without prior written permission
The EEOC claims these provisions interfere with employees' rights to cooperate with the EEOC and other administrative agencies in investigating charges of discrimination.
As part of the settlement for one of the suits involving the non-disparagement clause, the company agreed to include the following language in future separation agreements:
Employees retain the right to communicate with the EEOC and comparable state or local agencies and such communication can be initiated by the employee or in response to the government and is not limited by any nondisparagement obligation under the agreement.
While it is unclear whether the courts will find that the EEOC has gone too far, and whether the EEOC, or a plaintiff, would succeed in having a release agreement set aside without such limiting language, there are some steps you can take in the interim to reduce unwanted attention from the EEOC to your separation agreements and to bolster any defense of such an attack until there is some clear guidance from the courts.
First, confirm your release contains a specific provision expressly allowing employees to file EEOC charges and participate in EEOC investigations.
Next, review the agreement for any language that may be reasonably read as limiting employees' participation in a federal, state, or local investigation or proceeding (e.g., non-disparagement, cooperation, and confidentiality clauses).
While it is not suggested these provisions be deleted, consider adding language explicitly stating these provisions do not limit an employee's right to participate in an administrative investigation or proceeding conducted by the EEOC or other federal, state, or local agency.
While a major overhaul is probably unnecessary for agreements legally reviewed in the recent past, a few minor adjustments may be appropriate to better insulate your agreements
Don Phin, Esq. is VP of Strategic Business Solutions at ThinkHR, which helps companies resolve urgent workforce issues, mitigate risk and ensure HR compliance. Phin has more than three decades of experience as an HR expert, published author and speaker, and spent 17 years in employment practices litigation. For more information, visit
www.ThinkHR.com.