On February 7, 2014, the U.S. Equal Employment Opportunity Commission (“EEOC”) filed a suit against CVS in the U.S. District Court for the Northern District of Illinois, Eastern division, regarding employees’ right to file discrimination charges and communicate with the EEOC. This action seeks redress on behalf of CVS employees under Title VII of the Civil Rights Act of 1964, as amended (“Title VII“) to correct a pattern or practice of resistance to the full enjoyment of the rights secured by Title VII in violation of Section 707(a) of Title VII – which authorizes the EEOC to seek immediate relief and does not require the agency’s suit arise from a discrimination charge. CVS is the largest pharmacy group in the United States and provides prescription and other health-related services.
In its complaint, the EEOC specifically alleged that CVS violated Title VII because it conditioned the receipt of severance benefits on FLSA exempt non-store employees’ agreement to a Separation Agreement that deters the filing of charges and interferes with employees’ ability to communicate voluntarily with the EEOC and the Fair Employment Practices Agencies (“FEPAs“). Specifically the Separation Agreement contains a General Release of Claims clause stating that the: “employee hereby releases and forever discharges CVS Caremark Corporation… from any and all causes of actions, lawsuits, proceedings, complaints, charges, debts contracts, judgments, damages, claims, and attorneys’ fees against the Released Parties, whether known or unknown, which Employee has ever had, now has or which the Employee… may have prior to the date of this Agreement… The Released Claims include… any claim of unlawful discrimination of any kind…” Besides, the Separation Agreement includes another clause stating that: “employee agrees not to initiate or file, or cause to be initiated or file, any action, lawsuit, complaint or proceeding asserting any of the Released Claims against any of the Released Parties…”
The EEOC is seeking a permanent injunction enjoining CVS from engaging in a pattern or practice of resistance to the right to file a charge and participate and cooperate with investigation by the EEOC or FEPAs. Furthermore, the EEOC is also requesting that CVS reforms its separation agreement in order to be consistent with Section 707 of Title VII and asks the Court to order CVS to institute and carry out policies, practices and programs that provide for the full exercise of the right to file a charge and participate and cooperate with the EEOC and FEPAs. Finally the EEOC requests that each former CVS employee who signed the disputed Separate Agreement gets a three hundred days period to file a charge of discrimination with the EEOC or any FEPAs if they have any.
Through this lawsuit, the EEOC seeks to tackle overly broad severance agreements, which infringe on employees’ right to seek remedy for unlawful discrimination by filing a charge with the EEOC or a FEPA.