No matter how long you’ve played the game, administering a Reduction-in-Force or RIF is never easy. In fact, it is often painful not only because they are difficult to administer, but because of the toll it takes on the workplace generally and employees individually. Terminating a whole team, or worse, an entire division of teams, is incredibly difficult for all those involved. Game planning and proper execution are critical. C-R-I-T-I-C-A-L. Employers need to be prepared so they do not give away easy lay-ups to employees in the form of discrimination lawsuits.
On Friday, the Supreme Court agreed to decide the issue of whether employers may include class/collective action waivers in their arbitration agreements. As we discussed in more detail here, multiple federal appeals courts have split over the issue. This has created a difficult situation for employers and employees, especially where the employer operates in multiple states. By the time the Supreme Court takes up the issue in April, there may be a ninth justice on the bench. We will continue to provide updates as new information becomes available, but in the meantime, we encourage you to visit our sister blog ADR: Advice from the Trenches and read its latest terrific post: When an Arbitration Clause Sounds Permissive But is Not – Does “May” Really Mean “Must”?
Non-disparagement provisions are commonplace in today’s settlement and separation agreements, with employers often seeking the broadest protection against disparagement. A recent decision from a New York federal court, however, suggests that such provisions may have their limits in connection with wage and hour settlement agreements. Even a non-disparagement provision that is mutual and agreed upon by all the parties may be struck down if it is so overbroad as to violate the FLSA’s compliance objectives according to the court in Santos v. El Tepeyac Butcher Shop Inc.
A recent Colorado federal court decision serves as a good reminder to employers on how not to obtain a release of claims from a terminated employee. For starters, don’t tell the employee her job is being eliminated and then run an advertisement seeking to fill her position. Actions like those may serve to invalidate the release of claims you obtained from the employee.
A Federal Appeals Court recently confirmed that under certain circumstances, parties may privately settle and release claims under the Fair Labor Standards Act. A generic release contained in a settlement agreement won’t do it; instead, the parties must cite to a bona fide dispute regarding wages in the settlement agreement. But this decision extends only to the borders of the Fifth Circuit, which encompasses Texas, Louisiana and Mississippi. Most other circuit courts would not enforce such releases unless they were the product of an agreement supervised by a court or the Department of Labor.
This week, the Supreme Court disappointed many employers by declining to determine whether the Fair Labor Standards Act does or does not provide employees with a non-waivable substantive right to bring a collective action. The employer in Killion v. KeHE Distributors was hoping the Supreme Court would answer that question in the negative and vacate an earlier Sixth Circuit Court of Appeals decision refusing to enforce a collective action waiver contained in a separation agreement.
Last month, we reported that an Illinois district court judge threw out the EEOC’s controversial lawsuit against CVS seeking to invalidate its severance agreements. The judge there did so and promised to follow up with a written opinion. That opinion has now arrived, but it’s not the one that we hoped for. Rather than address whether CVS’s standard severance agreement violated its employees’ rights under Title VII, Judge Darrah focused solely on certain procedural shortcomings; namely, that the EEOC had failed to engage in any conciliation prior to bringing the lawsuit.
A federal court has tossed the EEOC’s controversial lawsuit against CVS seeking to invalidate its severance agreements. While the EEOC still has a similar lawsuit pending against another company in Colorado, employers can brief a sigh of relief for the moment.
Back in February, in Equal Employment Opportunity Commission v. CVS Pharmacy, Inc., the EEOC alleged that CVS’s standard severance agreement interfered with its employees’ rights to file discrimination charges with the EEOC and to participate in EEOC investigations and that by interfering with these rights, CVS violated Section 707 of Title VII, which prohibits employers from engaging in a pattern or practice of resisting the rights that Title VII protects. Continue Reading Federal Court Stops the EEOC’s Assault on CVS’s Severance Agreement
In a previous post we discussed Foster v. Mountain Coal Company LLC, the District of Colorado’s decision invalidating a waiver of an employee’s claims against his employer under the Age Discrimination in Employment Act (ADEA) after the employee was terminated in connection with a reduction in force (RIF). The court concluded that under the Older Workers’ Benefit Protection Act (OWBPA), the waiver the employee signed did not adequately “advise” him of his right to consult with an attorney prior to executing a severance agreement because the waiver merely contained passive language in the past tense stating that the employee had been given an “opportunity … for consultation with an attorney.” We now alert you to the Court’s reversal of that decision in response to the employer’s motion for reconsideration.
A Federal court in Colorado recently permitted a former employee to advance an age discrimination claim despite his prior execution of a severance and release agreement after his employment ended in connection with a reduction in force. The Court in Foster v. Mountain Coal Company, LLC invalidated the release of the age discrimination claim because it did not fully satisfy the Older Workers’ Benefit Protection Act’s “knowing and voluntary” requirement; in particular, it did not properly “advise” the employee to consult with an attorney before executing the agreement.