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EEOC v. CVS Pharm., Inc.

United States Court of Appeals for the Seventh Circuit

October 29, 2015, Argued; December 17, 2015, Decided

No. 14-3653

Opinion

 [*336]  Flaum, Circuit Judge. This appeal arises out of an enforcement action brought by the Equal Employment Opportunity Commission ("EEOC") under Section 707(a) of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-6. The EEOC claims that CVS Pharmacy, Inc. ("CVS") is violating Title VII by offering a severance agreement that could deter terminated employees from filing charges with the EEOC or participating in EEOC proceedings. The district court granted summary judgment for CVS because [**2]  it interpreted Title VII as requiring the EEOC to conciliate its claim before bringing a civil suit, and the EEOC had refused to engage in conciliation. The district court was also skeptical that an employer's decision to offer a severance agreement to terminated employees could serve as the basis for a "pattern or practice" suit under Title VII, without any allegation that the employer engaged in retaliatory or discriminatory employment practices. On appeal, the EEOC argues that Section 707(a) of Title VII gives it broad powers to sue without engaging in conciliation or even alleging that the employer engaged in discrimination. For the reasons that follow, we disagree with the EEOC and affirm the judgment of the district court.

I. Background

In July 2011, CVS fired store manager Tonia Ramos and offered her a severance agreement (the "Agreement"), which she signed. Severance agreements (also known as "separation agreements") are contracts commonly used by employers to protect against legal liability. Under a typical severance agreement, the former employee agrees to waive claims against the employer in exchange for consideration that the former employee would not otherwise be entitled to, such as additional pay [**3]  or benefit extensions.

The CVS Agreement, a four-and-a-half-page, single-spaced document, includes a broad release of waivable claims relating to the signatory's employment, including claims under Title VII.1 It also includes a  [*337]  covenant not to sue CVS in any court or agency, but expressly carves out the employee's right to "participate in a proceeding with any appropriate federal, state or local government agency enforcing discrimination laws." The Agreement forbids the signatory from improperly using or disclosing confidential information belonging to CVS and making "any statements that disparage the business or reputation" of CVS, but clarifies that the Agreement does not prohibit the employee from "making truthful statements or disclosures that are required by applicable law, regulation or legal process" or "requesting or receiving confidential legal advice." The Agreement requires the signatory to cooperate with CVS to protect confidential company information in legal proceedings, but provides that "[n]othing in this Agreement shall be construed to prohibit Employee from testifying truthfully in any legal proceeding." If the signatory complies with these and other related covenants, the signatory [**4]  is entitled to severance pay, subsidized health insurance during the severance period, and two months of outplacement assistance. The Agreement advises the terminated employee to seek legal advice before signing, allows the terminated employee twenty-one days to consider whether to sign, and provides a seven-day revocation period after signing.

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809 F.3d 335 *; 2015 U.S. App. LEXIS 21963 **; 128 Fair Empl. Prac. Cas. (BNA) 797

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, v. CVS PHARMACY, INC., Defendant-Appellee.

Subsequent History: Stay lifted by, Motion granted by Equal Empl. Opportunity Comm'n v. CVS Pharm., Inc., 2016 U.S. Dist. LEXIS 121878 (N.D. Ill., Sept. 9, 2016)

Costs and fees proceeding at, Motion granted by, in part, Motion denied by, in part EEOC v. CVS Pharm., Inc., 2017 U.S. Dist. LEXIS 7337 (N.D. Ill., Jan. 18, 2017)

Prior History:  [**1] Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. 1:14-cv-00863—John W. Darrah, Judge.

EEOC v. CVS Pharm., Inc., 70 F. Supp. 3d 937, 2014 U.S. Dist. LEXIS 142937 (N.D. Ill., Oct. 7, 2014)

CORE TERMS

conciliation, district court, retaliation, severance agreement, resistance, filing of charges, termination of employment, signatory, presuit, summary judgment, rights, unlawful employment practice, full enjoyment, civil action, regulations, violations, aggrieved, cooperate, argues, suits

Business & Corporate Compliance, US Equal Employment Opportunity Commission, Authorities & Powers, Investigative Authority, Civil Procedure, Appeals, Standards of Review, De Novo Review, Summary Judgment Review, Standards of Review, Summary Judgment, Entitlement as Matter of Law, Genuine Disputes, Labor & Employment Law, Retaliation, Statutory Application, Title VII of the Civil Rights Act of 1964, Civil Actions, Intervention