Thursday, May 29, 2014
Many readers of this blog are likely already aware of the EEOC’s current effort to challenge severance agreements that it views as interfering with an employee’s non-waivable right to file an EEOC charge of discrimination. The two pending cases are EEOC v. CVS Pharmacy, Inc., No. 1:14-CV-863 (N.D. Ill.) and EEOC v. CollegeAmerica Denver, Inc., No. 1:14-CV-01232 (D. Colo.). Some other coverage of these cases can be found here, here, here, and here.
These two cases differ in some important ways. For this post, I will focus on CVS. The CVS Separation Agreement at issue included an express carve-out within the covenant not to sue paragraph stating that: “[N]othing in this paragraph is intended to or shall interfere with Employee’s right to participate in a proceeding with any appropriate federal, state or local government agency enforcing discrimination laws, nor shall this Agreement prohibit Employee from cooperating with any such agency in its investigation.” Nonetheless, the EEOC maintains that several other aspects of the Agreement, including a cooperation provision, a non-disparagement provision, and a non-disclosure provision, constitute “resistance to the full enjoyment of rights secured by Title VII because the Separation Agreement interferes with an employee’s right to file a charge with the EEOC . . . and to participate and cooperate with an investigation conducted by the EEOC . . . .” (Complaint, ¶ 10).
The EEOC’s legal theory here appears to be that this severance agreement violates Section 707(a) of Title VII, which provides in relevant part:
Whenever the Attorney General has reasonable cause to believe that any person or group of persons is engaged in a pattern or practice of resistance to the full enjoyment of any of the rights secured by this subchapter, and that the pattern or practice is of such a nature and is intended to deny the full exercise of the rights herein described, the Attorney General may bring a civil action in the appropriate district court of the United States . . . requesting such relief, including an application for a permanent or temporary injunction, restraining order or other order against the person or persons responsible for such pattern or practice, as he deems necessary to insure the full enjoyment of the rights herein described.
CVS contends that, even assuming the agreement is somehow improper, that would only render the severance agreement unenforceable – not an independent substantive violation of Title VII. Throughout its motion to dismiss brief, CVS contends that the Section 707 “pattern or practice” language is merely a “procedural tool,” or an “evidentiary framework,” or a “way of proving discrimination.” In CVS’s view, a series of underlying violations of the substantive prohibitions of Title VII – either discrimination or retaliation – is a prerequisite to a pattern or practice suit.
Interestingly, the EEOC has long had a tendency to blur the distinctions between Section 707 and Section 706 in systemic cases in order to capture certain remedial or procedural advantages from each section – something I have written/complained about several times, including in this article and in the comments section here. Now, CVS may try to capitalize on that history. In its brief, CVS cites the EEOC’s own words from a recent Ninth Circuit appellate brief involving the hotly-disputed failure to conciliate issue and a purported distinction between Sections 706 and 707 on conciliation. The EEOC's words: “But ‘pattern or practice’ is an evidentiary framework, not a ‘claim,’ and EEOC may use that framework under either §706 or §707.”
So does Section 707’s “pattern or practice” language only create an evidentiary framework for establishing underlying substantive discrimination or retaliation in violation of Title VII? Or does it create an independent substantive claim? Perhaps we will finally get an answer. If it is the latter, can we expect to see Section 707 challenges to other common employment practices, such as mandatory arbitration agreements, that might be alleged to "deny the full exercise" of rights under Title VII?