Severance Agreement Releases

10.16.2014

Employers must be aware that the Equal Employment Opportunity Commission (EEOC) has continued to challenge severance agreement releases obtained from departing employees that contain overly broad language in violation of federal law.  One common example is a broad covenant by the employee not to sue the employer for any reason.  Such a covenant is illegal; rather, such a clause should recite that the employee may file an EEOC charge, but releases any right to a financial recovery from such a charge.

Another example is a confidentiality clause that does not contain any exception for the employee participating in an EEOC investigation involving any alleged discrimination.

These subtleties are why severance agreements must be drafted or reviewed by experienced employment counsel who remains current on the ever-changing employment law landscape.