’Tis the Season to Rein-In EEOC Overreach

On December 17, 2015, the Seventh Circuit Court of Appeals issued a decision that seriously curtails enforcement authority claimed by the EEOC’s litigators. In EEOC v. CVS Pharmacy, Inc. (7th Cir. 2015), the court rejected the EEOC’s interpretation of Section 707 of Title VII of the Civil Rights Act of 1964.

The court held that the EEOC may not bring actions that are unrelated to an “employee’s right to be free from workplace discrimination and retaliation for opposing discriminatory employment practices.”

In this suit, the EEOC dismissed the underlying discrimination claim, but pursued CVS Pharmacy for instituting a severance agreement that required a waiver of Title VII claims. The agency believed that the waiver-for-severance chilled employees’ Title VII rights. The court disagreed, holding that Section 707(a) “does not create a broad enforcement power for the EEOC to pursue non-discriminatory employment practices that it dislikes … .”

The court also held that the EEOC may not bring civil suits without first attempting to conciliate claims.

Under Section 706, the EEOC is required to conduct a conciliation, or method of informal dispute resolution, prior to filing a civil claim. The EEOC argued that Section 707 bestows a more broad power and thus excludes the conciliation requirement of Section 706 and its own regulations. The court disagreed. In its words, “The EEOC is required to comply with all pre-suit procedures under Section 706 when it pursues ‘pattern or practice’ violations.”

The merits of the case were not heard at either the appellate or district court level (the latter of which dismissed the claim on a motion for summary judgment). But the practical effect is that waivers of Title VII claims in exchange for severance continue to be effective, unless they are in and of themselves discriminatory or retaliatory.