Severance Agreements

News & Analysis as of

Stop Trade Secret Thieves Before They Leave

One of the most likely times to lose trade secret protection occurs when an employee leaves the company. If there are feelings of resentment, the employee may want to harm the employer, or the employee may mistakenly feel...more

Seventh Circuit Affirms the Dismissal of Lawsuit Based on the EEOC's Failure to Conciliate Claims Related to Releases

On December 17, 2015, the U.S. Court of Appeals for the Seventh Circuit affirmed a district court’s dismissal of the Equal Employment Opportunity Commission’s lawsuit against CVS Pharmacy.  This lawsuit has been the subject...more

SEC Whistleblower Report Shows Increase in “Tips”

The Securities and Exchange Commission’s (SEC) Office of the Whistleblower (Office) recently released its 2015 Annual Report on the Dodd-Frank Whistleblower Program (Report) (November 16, 2015)....more

Seventh Circuit Tosses EEOC Lawsuit Challenging CVS Severance Agreements Due to Failure to Conciliate

Last month, the Seventh Circuit again rejected the Equal Employment Opportunity Commission’s attempt to declare an employer’s standard severance agreement illegal under Title VII. The EEOC and CVS Pharmacy have clashed over...more

EEOC Must Conciliate, But Still Few Answers Regarding Routine Separation Agreement Provisions

In February 2014, the EEOC sent waves through employer communities when it filed a lawsuit against a national retail pharmacy contending some of the company’s separation agreement provisions — which many considered “standard”...more

Seventh Circuit Rejects EEOC’s Attack on Severance Agreements

On December 17, 2015, the U.S. Court of Appeals for the Seventh Circuit upheld the dismissal of a lawsuit by the EEOC against CVS Pharmacy, Inc. In Equal Employment Opportunity Commission v. CVS Pharmacy, Inc., the EEOC...more

Seventh Circuit “Releases” CVS From EEOC’s Separation Agreement Attack

As we previously blogged about, the EEOC has gone on the offensive challenging employer severance agreements. In one such case, the EEOC attacked CVS Pharmacy Inc.’s standard release agreement which contained terms more...more

7th Cir. Won’t Let EEOC Skip Pre-Suit Conciliation

When CVS fired store manager Tonia Ramos in 2011, it offered her its standard severance agreement that included a broad release of waivable claims, including claims under Title VII, but explicitly preserving the right to...more

Benefits Litigation Update – Fall 2015

Message from ERIC President and CEO Annette Guarisco Fildes: Welcome to the Fall edition of Benefits Litigation Update, brought to you by The ERISA Industry Committee (ERIC) and the law firm of Epstein Becker &...more

Federal Court Allows Terminated Employee to Proceed with Age Discrimination Claim Despite Her Execution of a Release of Claims

A recent Colorado federal court decision serves as a good reminder to employers on how not to obtain a release of claims from a terminated employee. For starters, don’t tell the employee her job is being eliminated and then...more

Corporate Divorce Series: Disparage-Me-Not

If you have been following my corporate divorce series, you may have read the “Break Up” piece where I advised newly terminated folks to keep their cool if they are unexpectedly fired because their post-firing behavior might...more

Now’s the Time to Review Compensation Arrangements Relating to Unvested Rights

Correction of Errors before Year End Could Avoid Costly 409A Penalties - Sometimes overlooked is the fact that many employment, severance and change-of-control agreements are subject to U.S. Internal Revenue Code...more

Is Your Severance Policy an ERISA Plan?

Severance plans are generally covered under ERISA, but it is not always easy to distinguish an ERISA-covered severance plan from a non-ERISA severance policy. There are advantages and disadvantages to being an ERISA-covered...more

Getting Releases Right

There are times when it makes sense to resolve an actual or potential employment law claim by paying something and getting a release from the employee. Paying severance in return for a release and waiver of claims isn’t...more

Separately Assessing Separation Agreements

Separation or severance agreements —which typically provide a terminating employee with some kind of cash payment, temporary salary continuation, or other gratuitous benefit in exchange for a release of claims — have their...more

ERISA Case Highlights Importance of Written Releases at Termination of Employment: Sullivan v. Stanadyne Corporation

A federal court has dismissed claims for enhanced retirement benefits in a case highlighting a participant’s written release of claims at the time of his employment termination. Sullivan v. Stanadyne Corporation, Case No....more

Retaliation: Realities and Myths

Unlawful workplace retaliation can take several forms, and claims for retaliation arise under a number of different statutes and common law theories. Workers compensation statutes, for example, contain provisions that...more

Corporate Divorce: Treat Your Employment Contract Like a Prenup

Once again I observe that while I am not a divorce lawyer, the analogies of divorce law to my employment practice are startling. Two parties meet (the interview), they realize how many things they have in common (the job...more

No-Hire Clauses Common to Settlement Agreements Now Void In California

The Ninth Circuit Court of Appeals recently broadened California's already expansive interest in promoting employee mobility by voiding any contract provision imposing a meaningful obstacle to a California resident's ability...more

How to Avoid Brown Act Violations When Discussing Litigation Issues

A nearly $400,000 severance deal struck between Pasadena Community College and its former president was nullified by a judge after determining that the deal was improperly discussed and finalized in closed session. A Los...more

Are Top Hat Plans Entitled to a Discretionary Standard of Review?

Many years ago the Supreme Court decided that qualified retirement plans that gave their fiduciaries discretion to determine plan benefits were entitled to have their decisions, reviewed by a court under a generous “abuse of...more

Supreme Court Declines to Hear Severance Agreement FLSA Collective Action Waiver Case

The Supreme Court has declined to grant review of a Sixth Circuit decision that cast significant doubt on the effectiveness of an employee’s waiver of Fair Labor Standards Act (FLSA) collective action rights. Last summer, the...more

Australian Employment Contracts And What Terms Will Now Be Implied After Barker

The long awaited High Court of Australia decision in Commonwealth of Australia v Barker held that a duty of mutual trust and confidence is not implied into Australian contracts of employment... Many commentators...more

First Circuit Reviews Top Hat Plan Benefits Denial for Abuse of Discretion

The First Circuit recently applied an abuse of discretion standard of review to a claim for top hat plan benefits. Plaintiff Robert Niebauer, a former executive of Crane, brought a claim for executive severance plan benefits...more

Federal agencies attack employment agreements, and what you can do about it: 8 steps to consider

The US Securities and Exchange Commission recently caused shockwaves when it announced its first enforcement action against a company for using an allegedly improper confidentiality agreement during internal investigations....more

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