Wednesday, October 8, 2014

Update on EEOC's New Section 707 Theory

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previously wrote about the EEOC's new theory that Section 707 of Title VII contains substantive protections, rather than simply the procedural framework for claims that an employer has engaged in a "pattern or practice" of unlawful discrimination.  There are two important developments to report in this area.

First, an update on the severance agreement challenge:  In EEOC v. CVS Pharmacy, Inc., the EEOC alleged that CVS's severance agreement violated Section 707(a) and constituted a "pattern or practice of resistance" to the full enjoyment of Title VII rights by implying that the former employee could not file a charge of discrimination with the EEOC.  CVS disputed this characterization of the severance agreement, and also argued that Section 707 did not create separate substantive rights.  CVS also argued that the the EEOC had failed to conciliate, as required by Section 707(e) [which, in turn, references the procedures of Section 706]. District Judge Darrah in the Northern District of Illinois has now dismissed the EEOC's complaint.  The opinion, just released today, can be found here.  Judge Darrah agreed with CVS that the EEOC was required to conciliate this claim and failed to do so. Judge Darrah rejected the EEOC's contention that Section 707(a) created a claim for a "pattern or practice of resistance" that is separate and independent of otherwise prohibited discrimination or retaliation, and that is free from the conciliation requirement for charges of a "pattern or practice of discrimination" found in Section 707(e).     

Second, the EEOC has recently introduced a new use of the substantive Section 707 theory.  In my earlier post, I wondered whether we might see similar Section 707 challenges to mandatory predispute arbitration provisions.  We now have the answer.  The EEOC has sued Doherty Enterprises, which owns and operates many Applebee's and Panera Bread restaurants in several states, alleging that its mandatory arbitration agreement violates Section 707(a) and constitutes a pattern or practice of resistance to the full enjoyment of Title VII rights.  The EEOC alleges that the arbitration agreement at issue, which insists upon the exclusive arbitration of claims that might otherwise "require or allow resort to any court or other governmental dispute resolution forum," denies employees "the full exercise of the Title VII right to file a charge."  The EEOC press release is here, and the complaint is here

-J. Bent

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