Skip to Content

NLRB and EEOC Target Key Terms of Confidentiality and Severance Agreements

on Tuesday, 24 June 2014 in Labor & Employment Law Update: Sarah M. Huyck, Editor

In what is viewed as a major change to the landscape of employee confidentiality agreements, the EEOC and the NLRB have recently targeted a variety of terms found in agreements with employees related to confidentiality of information. The most recent attack comes with the EEOC’s filing of a lawsuit against CVS Pharmacy in Chicago alleging that a CVS separation agreement requires a number of terms which the EEOC challenges and are contrary to the rights employees possess under Title VII.

In the CVS lawsuit, the EEOC alleges that the severance agreement constitutes resistance of the full enjoyment of rights secured by Title VII because the Separation Agreement interferes with an employee’s right to file a discrimination charge or to participate in an EEOC investigation. The terms of agreement targeted by the EEOC include clauses which require:

  • Release of Claims. In this agreement, the employee agrees to release all “charges” and “any claim of discrimination of any kind.” The EEOC takes this to mean an employee is prohibited from filing a discrimination charge, a right which continues after a settlement and release of claims. This interpretation exists despite language in the CVS agreement which states that an employee may participate and cooperate in any agency investigation.
  • Confidentiality. The employee under the agreement agrees not to disclose confidential information without the consent of CVS, and includes in this definition “personnel” information.
  • Non-Disparagement. The employee agrees not to disparage the business and/or officer, director or employee of the corporation.
  • Cooperation. The employee is required to notify CVS if he/she receives a subpoena, deposition notice, interview request or another inquiry relating to any administrative investigation.
  • This lawsuit follows on the heels of statements by the Chairman of the National Labor Relations Board about specific employer policies which are of concern to the NLRB. This list includes:
  • Confidentiality Agreements. In the Board’s view, employees are able to communicate with each other and third parties about employment-related issues. Thus, any confidentiality agreement which might prohibit employee communications about wages, benefits, work conditions, or criticism of the employer may be subject to enforcement action by the NLRB.
  • Employee Behavior. The Board also is taking an expanded view of the types of behavior an employer can expect from employees and has targeted policies which deal with rudeness, profanity, respect, positive attitudes, and intimidating or threatening behavior. The Board believes that discourteous or offensive behavior is just part and parcel of an employee’s exercise of Section 7 rights.
  • Non Disparagement. The Board follows the same mind-set as the EEOC believing that policies or an agreement which prevent an employee from disparaging an employer violates Section 7.

In light of these recent events, employers need to be more specific and deliberate in their confidentiality policies, and policies regarding certain behaviors and terms which may be found in employment agreements, including separation agreements.

An employer has a greater chance of avoiding the attention of the EEOC or the NLRB by considering the following options if desired:

  • Have all confidentiality policies and agreements reviewed and brought up to date, based upon the current position of the agencies. Particular focus should be on the business processes and information which is truly business sensitive (yet not protected).
  • Make sure any release language does not prohibit charge filing with administrative agencies which may maintain rights to this information beyond the agreement or settlement.
  • Set up “cooperation” language such that it does not require taking a side in any litigation or notice about communication with an agency. Cooperation may be restricted to providing truthful information in relation to any future claims or other restrictions.

Scott S. Moore

1700 Farnam Street | Suite 1500 | Omaha, NE 68102 | 402.344.0500

Law Firm Website Design