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Upon termination on an employment relationship, many employees are presented with an opportunity to receive severance packages from their former employers. As employment attorneys, we regularly encounter severance agreements in which the terminated employee has essentially relinquished their ability to file any lawsuit generating out of their previous employment through their acceptance of the terms of the severance agreement.  It is perfectly legal for an employer to request that an employee sign away their rights to file a lawsuit against the employer as a term for accepting a severance package, and, as such, we regularly advise employees to consult with employment law lawyers before entering any such agreement.

Title VII of the Civil Rights Act of 1964, however, makes it illegal for an employer to restrict an employee’s right to file a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”) and, further, to retaliate against an employee for filing such a charge of discrimination.  As such, an employer cannot place a term in a severance agreement which limits an employee’s right to file a charge of discrimination with the EEOC after accepting the terms of his or her severance package. But, can an employer stop paying an employee per the terms of his or her severance agreement, if a charge of discrimination is filed after the severance agreement is accepted?

This question was directly addressed in a recent EEOC lawsuit, 3:11-CV-00309-RLM-CAN, brought against Trinity Health Corporation (“Trinity Health”). Trinity Health maintained a policy, since approximately 2008, of denying or delaying severance payments to employees and former employees who signed severance agreements and then filed discrimination charges with the EEOC.  Being that denying and/or delaying severance payments based upon filing a charge of discrimination with the EEOC can only be seen as punishing said employee for exercising their Federal right to file such charges, Trinity Health settled the case by: (1) agreeing that it will not deny or delay severance payments to employees who sign severance agreements and file EEOC charges; (2) paying $25,000.00 in damages to an employee whose severance package was withheld after she filed a charge with the EEOC; (3) agreeing that it will not in the future require employees to choose between receiving severance benefits from them or relief through the EEOC process as a condition of receiving their severance payments; and (4) posting additional non-discrimination and non-retaliation notices at its places of business and corporate headquarters.

If you even think that your employment rights have been violated or that you might need an employment lawyer, then call the right attorney to schedule a free and confidential consultation at 866-797-6040. Spitz, The Employee’s Law Firm is dedicated to protecting employees’ rights and solving employment disputes.


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