Just a quick followup today on a post from last month.
As I reported then, a District Court judge dismissed a closely-watched EEOC lawsuit against CVS challenging a pretty standard severance agreement. But the grounds for the dismissal were unknown back then.
The wait is over; the written decision was released yesterday. For those that were hoping that the court might shut this issue down, you will be disappointed because the court decided the case largely on procedural grounds. The Court found that the EEOC had not exhausted its conciliatory efforts required by law.
And so, we’re back to where we were at the start of the year. The EEOC is likely to continue to push this issue.
Still, I remain unconvinced by the merits of the EEOC’s arguments. Courts have, for example, routinely upheld enforcement of severance agreements — albeit in different contexts. But the arguments raised by the EEOC appear to be a stretch to me.
So, for now, employers should continue to stay alert on this issue but until we hear otherwise, it also seems that many will find it best to continue to use these agreements without further modification.