CVS Pharmacy Inc. on Friday asked an Illinois federal judge to toss the U.S. Equal Employment Opportunity Commissions lawsuit over the companys severance agreement, saying that despite the novel theory the agency is testing, the “run-of-the-mill agreement” does not violate the law. The EEOCs complaint alleged that CVS standard separation agreement with terminated workers amounted to a pattern or practice of interfering with employees right to file discrimination charges or communicate with the EEOC, but in its motion to dismiss the suit, the company contended the agreement simply does not do what the agency claims it does. In fact, the agreement expressly stipulates that former employees may participate in proceedings before anti-discrimination agencies and cooperate in their investigations, and the EEOC’s suggestion that the agreements nondisparagement or nondisclosure clauses supersede that express stipulation is foreclosed by contract law, the motion said. “[T]he EEOC’s premise is simply false,” the motion said. “CVS Pharmacy’s run-of-the-mill agreement does not do what the EEOC alleges.” But even if it did, the EEOCs “unprecedented theory” that this would constitute a pattern or practice of resisting the rights secured for its employees by Title VII would fail, CVS told the court. The motion argues that Title VII pattern-or-practice provision merely authorizes the EEOC to use a class action-style proof framework against those who repeatedly, intentionally engage in discrimination and retaliation, while CVS has not engaged in such misbehavior but has merely executed lawful contracts with departing employees. Even if the severance agreement did what the EEOC claims, it would at most be unenforceable rather than constituting a “pattern or practice” of violating Title VII, the motion said. “This court should reject that perverse, baseless attempt to turn pattern-or-practice authority into a roving commission to penalize lawful conduct that the EEOC deems bad,” the motion said. Finally, the motion also asserted that if the court does not reject the EEOCs legal theory and dismiss the suit, it should nonetheless grant summary judgment to CVS. The pharmacy chain maintains that it is entitled to a judgment in its favor because the EEOC did not engage in statutorily required efforts to settle the claim before filing suit. “Here, the EEOC flatly refused to engage in any conciliation, despite CVS Pharmacy’s repeated requests to do so and its express representation that it was modifying its severance agreement,” the motion said. “Instead, the EEOC insisted that it was not bound by this prerequisite in pattern-or-practice cases — another novel position squarely foreclosed by statutory text, four decades of consistent precedent, and the EEOC’s own binding regulations.” An EEOC spokesman declined to comment on the matter Monday. The agencys suit, filed in February, claims CVS conditioned nonstore employees severance pay on an “overly broad, misleading and unenforceable” separation agreement that interfered with employees’ right to file charges with the EEOC and other fair employment practices agencies. The complaint calls out several provisions of CVS five-page agreement, including a cooperation clause providing that the employee will contact the company if they receive a subpoena or other inquiry relating to a legal matter; a nondisparagement clause; a clause barring the disclosure of confidential company information; a general release of claims; and a covenant not to sue. While it is not unusual for the EEOC to sue over separation agreements that it considers too broad, the case caught the attention of many in the employment law community because many of the provisions targeted in the suit are considered typical and used by many large employers. CVS is represented by Eric Dreiband and Yaakov Roth of Jones Day. The EEOC is represented by P. David Lopez, James L. Lee, Gwendolyn Young Reams, John Hendrickson, Gregory Gochanour, Deborah Hamilton and Laura Feldman. The case is U.S. Equal Employment Opportunity Commission v. CVS Pharmacy Inc., case number 1:14-cv-00863, in the U.S. District Court for the Northern District of Illinois Eastern Division.
Posted on: Tue, 22 Apr 2014 15:46:39 +0000
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