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EEOC Sues CVS Over Severance Agreements

"The big print giveth, and the fine print taketh away" according to the late Archbishop Fulton J. Sheen. This is particularly true in employment severance agreements, where the fine print often include terms like "general release of claims," "non-disparagement" and "covenant not to sue." Employers rely on such language in employment and severance agreements in an attempt to end the threat of lawsuits and in return departing employees receive money or benefits. However, the Equal Employment Opportunity Commission ("EEOC") has recently found issue with one of the country's largest companies, CVS Pharmacy Inc., claiming that the language contained in CVS' severance agreements was "overly broad" and "misleading."

In February 2014, the EEOC filed a lawsuit against CVS, claiming the company was in violation of Title VII of the Civil Rights Act of 1964, which grants certain rights to employees. The EEOC is claiming that the language contained in CVS's severance agreements interfered with an employee's right to communicate with the EEOC and other government agencies and to participate in those agencies' investigations.

EEOC attorney John C. Hendrickson said in a statement, "Charges and communication with employees play a critical role in the EEOC's enforcement process because they inform the agency of employer practices that might violate the law." "For this reason, the right to communicate with the EEOC is a right that is protected by federal law. When an employer attempts to limit that communication, the employer effectively is attempting to buy employee silence about potential violations of the law. Put simply, that is a deal that employers cannot lawfully make."

The EEOC is seeking a permanent injunction against CVS, enjoining the company from restricting the right to file charges or participate in agency proceedings, reformation of the company's standard severance agreement, and corrective communications with CVS employees.

While it is unclear what the outcome of the suit will be or the impact such a case may have on employers around the United States, the suit has sparked controversy regarding severance agreements since many of the provisions in the CVS agreement are commonplace for many companies.

One thing is for sure, if you or someone you know has been a victim of unfair labor practices or has signed an employment or severance agreement that you believe to be unlawful, contact an experienced employment attorney. A skilled attorney can afford you the representation you deserve and ensure your legal rights are protected.

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