Court Dismisses EEOC Lawsuit Regarding CVS Settlement Agreements . . . On A Technicality

A court recently dismissed the Equal Employment Opportunity Commission’s lawsuit against CVS Pharmacy concerning allegedly overbroad settlement agreements, but not for the reason you might think.

The EEOC filed its lawsuit against CVS last spring.  The case was alarming to employers because it challenged a number of provisions that are fairly routine in employee settlement agreements (e.g., confidentiality, non-disparagement, etc…).  Many were awaiting a court decision addressing the merits of the EEOC’s arguments to see what implications it might have for employment settlement agreements.

Unfortunately, the court dismissed the case on a technicality, without addressing the merits of the EEOC’s claims.  Specifically, the court dismissed the case on the grounds that the EEOC failed to attempt to conciliate the matter with CVS before bringing its lawsuit, as required by 42 U.S.C. § 2000e-5(b).  Because it was undisputed that the EEOC did not first attempt to conciliate the matter, the court held that the EEOC was not authorized to bring the lawsuit and dismissed the case.

Takeaway:  Because the CVS case was dismissed on a technicality, employers will need to wait longer to find out whether courts will find any merit in the EEOC’s aggressive new approach to settlement agreements.

About Michael Miller

Michael is a Chambers-rated attorney in Briggs and Morgan's Employment, Benefits, and Labor group and is head of the firm’s Employment Law Counseling and Compliance practice group. He has 25 years experience counseling employers to prevent unwanted litigation and advises companies of ongoing changes in federal, state and local employment law. Michael advises employers in all areas of employment law including discipline and discharge, leaves of absence, wage and hour compliance, non-compete and confidentiality agreements, affirmative action plans, background checking, and drug/alcohol testing. For Michael's full bio, click here.

Posted on October 15, 2014, in Discrimination and Harassment, Employment Policies and Agreements and tagged . Bookmark the permalink. Comments Off on Court Dismisses EEOC Lawsuit Regarding CVS Settlement Agreements . . . On A Technicality.

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