CVS slammed by EEOC over severance deals

By Dan Cook

February 11, 2014

Share on linkedinShare on twitterShare on facebookShare on emailMore Sharing Services19 Once again, a big corporation has had to learn the old severance package agreement lesson: You can make people sign ’em, but good luck enforcing them.

This time, drugstore giant CVS Caremark got taken to severance package school. The instructor: the Equal Employment Opportunity Commission.

The EEOC sued CVS Caremark in federal court in Chicago on behalf of former employees, charging it with discrimination based on the language contained in severance package agreements it required employees to sign in order to get their going-away-party benefits.

“CVS conditioned the receipt of severance benefits for certain employees on an overly broad severance agreement set forth in five pages of small print. The agreement interfered with employees’ right to file discrimination charges and/or communicate and cooperate with the EEOC,” the EEOC said in a release.

Specifically, the agency charged the drugstore chain with violating Section 707 of Title VII of the Civil Rights Act of 1964, “which prohibits employer conduct that constitutes a pattern or practice of resistance to the rights protected by Title VII.”

The suit said agreements such as the one the CVS employees had to sign illegally restrict their rights to communicate to protective agencies about working conditions and practices that may violate the law.

“When an employer attempts to limit that communication, the employer effectively is attempting to buy employee silence about potential violations of the law. Put simply, that is a deal that employers cannot lawfully make,” said EEOC Regional Attorney John C. Hendrickson. “For this reason, the right to communicate with the EEOC is a right that is protected by federal law.”

EEOC District Director Jack Rowe added, “It is always difficult for an employee to report employer discrimination to federal law enforcement officials. Anything that makes that communication harder increases the risk that discrimination will go unremedied.”

CVS Caremark called the lawsuit unwarranted and, in a statement, said: “Nothing in CVS’ severance agreement prevents a former employee from filing a complaint with the EEOC or cooperating in an EEOC investigation. In fact, we have included language in our agreement to state that it does not prohibit employees from doing so. We have been cooperating with the agency and remain willing to cooperate; we are disappointed that the EEOC has taken this aggressive action.”