On October 7, 2014, U.S. District Court Judge John W. Darrah issued a Written Opinion and Order granting CVS's Motion for Summary Judgment and dismissing the EEOC's lawsuit against CVS. Equal Employment Opportunity Commission v. CVS Pharmacy, Inc., No. 14-cv-863 (N.D.Ill.2014). In this lawsuit, the EEOC alleged that CVS's Severance Agreement is invalid and unenforceable under Title VII of the Civil Rights Act of 1964. The case was closely watched by employment law attorneys because the terms and conditions of CVS's Severance Agreement are typical of those commonly used by employment lawyers in severance or separation agreements. Some employment law attorneys were concerned that invalidation of the standard terms and conditions of severance or separation agreements would create obstacles to negotiating settlements of employment law claims. The incentive for most employers to pay employees monetary settlements of employment law claims is to receive a release of claims and an agreement to not sue in exchange for the payment. If these terms were declared unenforceable, the incentive would be lost, and it would take some very creative lawyering to structure viable settlements of employment law claims. In view of Judge Darrah's dismissal of the EEOC's lawsuit, this will not be the case. Read more »
Employment Law Chicago Blog
A federal judge in Chicago recently dismissed the EEOC's lawsuit against CVS. The EEOC had alleged that CVS's standard severance agreement is unenforceable under Title VII. The EEOC's attempt to invalidate CVS's severance agreement was closely watched by employment lawyers. That's because CVS's severance agreement is typical of severance agreements used by many other employers. If customary terms of separation agreements, such as a general release of claims, confidentiality clause, and covenant to not sue, were declared unenforceable, employers would have less incentive to settle employment law claims. Why pay an employee a substantial amount of money to settle an employment law claim without getting a general release in exchange? This is the dilemma that employment attorneys would have faced when trying to resolve employment law claims, if the EEOC had succeeded. Read more »
On September 19, 2014, the 7th Circuit affirmed summary judgment in favor of an employee on the issue of FMLA coverage under the joint-employer doctrine. Cuff v. Trans States Holdings, Inc., No. 13-1241 (7th Cir., 9-19-2014). The Family and Medical Leave Act applies only to an employer that has at least 50 employees within 75 miles of the employee's work station. Cuff was on the payroll of Trans States, which only had 33 employees. However, Department of Labor Regulation 29 C.F.R. 825.106(a) provides that workers are covered by the FMLA when they are jointly employed by multiple firms that collectively employ 50 or more workers. In addition, DOL Regulation 29 C.F.R. 825.104(c) provides that 2 or more firms may be treated as a single employer when they operate a joint business. The joint-employer doctrine applies when one person is employed jointly by two firms that otherwise have distinct labor forces. Two important factors are: (1) whether the two firms have an arrangement to share the employee's services; and (2) whether one employer acts in the interest of the other employer in relation to the employee. Read more »
The Governor of Illinois recently signed into law an amendment to the Illinois Human Rights Act that extends its protections against sexual harassment to unpaid interns. The new law becomes effective on January 1, 2015. Before the amendment, the protections against sexual harassment under the Illinois Human Rights Act were only available to employees. Illinois employers should become aware of the new law and get ready to apply their sexual harassment policies and procedures to unpaid interns. Employee handbooks should be revised accordingly. Read more »
On September 9, 2014, the 7th Circuit affirmed summary judgment on Title VII race discrimination and retaliation claims. Moultrie v. Penn Aluminum International, No. 13-2206 (7th Cir., 9/9/2014). The 7th Circuit found that there was insufficient evidence to support the plaintiff's claims that he was demoted because of his race and in retaliation for complaining about discrimination. In order to establish a claim for employment discrimination, an employee must demonstrate that: (1) he is a member of a protected class; (2) his job performance met his employer's reasonable expectations; (3) an adverse job action was taken against him; and (4) similarly-situated employees outside of his protected class were treated more favorably. If the employee meets these elements, the employer has the opportunity to produce a legitimate, non-discriminatory reason for the adverse job action. This shifts the burden of proof to the employee to show that the employer's proffered reason is pretext for discrimination. In Moultrie, the plaintiff failed to establish that his job performance met his employer's reasonable expectations. He had been written up for multiple performance problems and admitted to dozing off while driving a fork-lift truck. He also failed to identify a similarly-situated employee outside of his protected class who was treated more favorably. The one employee that the plaintiff identified had also been terminated and, therefore, was not treated more favorably. Because the plaintiff failed to meet his initial burden of proof, pretext analysis was unnecessary. Read more »
On September 9, 2014, the 7th Circuit affirmed summary judgment on sexual harassment, racial harassment, and retaliation claims. Muhammad v. Caterpillar, Inc., No. 12-1723 (7th Cir., 9/9/2014). The plaintiff was subjected to derogatory remarks about his race and sexual orientation that were made made by three co-workers. Each time he reported the remarks to management, the company addressed the issue, and the co-workers did not make any more remarks. Other derogatory statements about the plaintiff's race and sexual orientation were written on the bathroom walls. Every time the plaintiff reported the bathroom graffiti, the company painted over it (3 times). After the plaintiff reported the remarks and graffiti, he was suspended for violation of a workplace rule and insubordination. The 7th Circuit held that the plaintiff's harassment claims failed because the company promptly addressed and stopped the harassment. The 7th Circuit rejected the plaintiff's argument, that the company's failure to discipline all of the co-workers supported his harassment claims. An employer's obligation under Title VII is to prevent harassment, not discipline the harassers. Read more »
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