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A federal judge sitting in the Northern District of Illinois recently dismissed a suit filed by the Equal Employment Opportunity Commission (EEOC) against CVS Health (CVS), in which the EEOC alleged that CVS’ practice of conditioning the payment of severance benefits upon a standard severance agreement (Severance Agreement) violated Title VII of the Civil Rights Act of 1964 by unlawfully interfering with the rights of CVS employees to file charges or communicate with the EEOC and Fair Employment Practices Agencies (FEPAs).

CVS’ Severance Agreement was a five-page, single spaced document that non-store employees were required to sign in exchange for severance benefits. The EEOC’s complaint took issue with several clauses in the Severance Agreement, including a cooperation clause that required former employees to promptly notify CVS if they were contacted in regards to a civil, criminal, or administrative investigation or proceeding related to CVS, a non-disparagement clause, a clause prohibiting disclosure of confidential information, a general release of claims, and a no pending actions/covenant not to sue clause.

These restrictions were accompanied by a single qualifying sentence noting that nothing in the Severance Agreement was intended to interfere with the employee’s right to participate or cooperate in federal, state, or local government agency proceedings. The EEOC asserted that this lone sentence was not sufficient to overcome the supposed overall resistant effect of the Severance Agreement upon an employee’s right to participate or cooperate in EEOC or FEPAs proceedings.

CVS filed a motion to dismiss the EEOC’s complaint, stating that CVS’ Severance Agreement was “run-of-the-mill” and expressly contained language stipulating to preserve employees’ rights regarding EEOC and FEPAs. CVS went on to argue that its regular use of the Severance Agreement did not constitute a “pattern or practice” in violation of Title VII, stating that the EEOC’s complaint contained no specific allegations that CVS had retaliated or discriminated against any employees, thus making a pattern or practice claim improper.

The Northern District of Illinois sided with CVS and dismissed the EEOC’s lawsuit. While many speculate that the court’s dismissal demonstrates the EEOC’s overreach in ignoring the express language of the Severance Agreement, we will not know the court’s reasoning for certain until a written opinion is issued at a later date.

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