As we noted last month, a federal district court in Illinois announced it was dismissing a controversial lawsuit brought by the EEOC against a nationwide pharmacy chain challenging that employer’s separation agreement containing standard provisions used by many employers. However, at that time, the court had not yet issued its written decision explaining the dismissal. Employers had hoped the court would provide guidance in its written ruling as to the proper content of separation agreements, in light of the EEOC’s attempt to persuade the courts to find that such separation agreements violate Title VII and potentially other federal anti-discrimination laws.

Unfortunately, we will need to wait a little longer. In a decision issued last week, the court in the Illinois case explained that it dismissed the EEOC’s lawsuit based on the EEOC’s failure to engage in formal “conciliation” prior to filing suit as required by Title VII. (Apparently the EEOC thinks it does not need to follow the requirements of Title VII – the same law it is charged with enforcing.) While this decision confirms that the EEOC does need to comply with Title VII’s procedural requirements before filing lawsuits against employers, it does not address the key issue employers are interested in: whether the language of their separation agreements comply with federal EEO laws. This decision is not expected to deter the EEOC from filing similar suits and there is already one such lawsuit pending in federal court in Colorado. Employers will need to stay tuned for further developments in the EEOC’s continuing quest to stop employers and employees from entering into agreements to mutually resolve their differences when an employee is terminated – something that would seem to be in the public interest.

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