Ever wonder why the severance agreement that I (or your other favorite employment lawyer) send you says “nothing in this Agreement prevents Employee from filing a charge with the EEOC” (or words to that effect)? I mean, isn’t that the point of the agreement? You pay the employee money, and he or she can’t file a charge or lawsuit against you? Well, a recently announced settlement from the EEOC provides some insight.
An employee with the Coleman Company filed an EEOC charge alleging that the company discriminated against the employee based on a disability. After investigating, the EEOC found that it was probable that the company violated Section 503 of Americans with Disabilities Act and Section 704 and 706 of Title VII—the retaliation provisions. How, you may ask? According to the EEOC’s announcement,
the company conditioned “employees’ receipt of severance pay on an overly broad severance agreement that interfered with employees’ rights to file charges and communicate with the EEOC, and which precluded employees from accepting any relief obtained by the EEOC, should the agency take further action.”
Coleman has agreed to hire a consultant to review its severance agreements and make changes if necessary. The company will also notify employees who signed agreements in the last few years about their rights.
Keep in mind that the EEOC’s announcement does not indicate that Coleman discriminated against the former employee based on a disability. This conciliation was all about a provision in the severance agreement. So, it appears that the company did what it was supposed to do under the ADA but is being chastised only for its form agreement.
The EEOC has made clear that it is concerned about the breadth of severance agreements. In fact, preserving access to the legal system, including addressing overbroad separation agreements, is part of its Strategic Enforcement Plan.
Note that the EEOC’s agreement with Coleman goes well beyond the current charging party. Not only must Coleman review and perhaps revise its current agreement, it must notify any employees who signed similar agreements in recent years. Once the EEOC is looking at an issue in your workplace, it can expand beyond the current employee.
So what’s the moral of the story? When your labor lawyer includes language that carves out someone’s ability to talk to the EEOC (or any other government agency), listen.