In case you missed it last Friday, a federal judge dismissed the EEOC’s lawsuit against CVS, which had challenged as retaliatory various garden-variety provisions in the retailer’s employment separation agreement.
On that same day, the EEOC announced the filing of another lawsuit, which also challenged as retaliatory a provision in an employment document. Unlike the CVS lawsuit, however, this lawsuit likely has merit.
The EEOC alleges that a Florida restaurant franchisor operator requires, as a condition of employment, all applicants and employees to submit all employment-related claims to binding arbitration, and waive their rights to file discrimination charges with the EEOC. You can read the allegedly offending arbitration clause here.
Unlike the challenged clauses in the CVS case, this clause expressly prohibits individuals from pursuing discrimination charges with the EEOC (or its state or local counterparts). The employment discrimination laws, however, prohibit as retaliatory any effort by an employer to require employees to forsake their rights to see redress with the EEOC. Thus, in my opinion, as a management-side employment lawyer, this employer’s agreement has problems.
The proper way to draft an arbitration agreement, or other agreement that waives certain rights or remedies, is to carve out EEOC charges. You would say something like this:
Nothing in this Agreement is intended to, or shall, interfere with the employee’s rights under federal, state, or local civil rights or employment discrimination laws to file or otherwise institute a charge of discrimination, to participate in a proceeding with any appropriate federal, state, or local government agency enforcing discrimination laws, or to cooperate with any such agency in its investigation, none of which shall constitute a breach of this Agreement. Employee shall not, however, be entitled to any relief, recovery, or monies in connection with any such brought against the Employer, regardless of who filed or initiated any such complaint, charge, or proceeding.
Because this clause protects the EEOC’s right to investigate and remedy violations of, and otherwise enforce, the law, it should pass muster with the EEOC. (Of course, before you implement any such language in your agreements, you must consult with your own employment counsel).
My advice to the employer in this case is to settle with the EEOC as soon as possible on the best terms possible, and avoid the expense of a costly uphill legal battle that will be difficult to win.
My advice to the employer in this case is to settle with the EEOC as soon as possible on the best terms possible, and avoid the expense of a costly uphill legal battle that will be difficult to win.