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Summary of Release Requirements for Discrimination Claims

According to the EEOC summary, all federal discrimination statutes require that any valid release:

• be “knowing and voluntary” on the part of the employee (this term of art has been construed differently for the different discrimination statutes);
• be exchanged for valid consideration, such as additional compensation to which the employee would not otherwise be entitled; and
• not require an employee to waive any future rights – i.e., for claims arising after the agreement is signed.

In determining whether a release is “knowing and voluntary,” the EEOC’s summary correctly points out that courts typically consider whether a given release:

• is written in a way that is clear and specific, so that an employee can understand it (the EEOC cautions against “technical jargon and long, complex sentences”);
• has been induced by fraud or duress initiated by the employer;
• provides the employee with sufficient time for consideration before signing;
• encourages or discourages review by the employee’s attorney; and
• is subject to input from the employee before signing.

For releases that include waivers of federal age discrimination claims under the ADEA, the EEOC’s summary notes additional specific requirements for validity dictated by the federal Older Workers Benefit Protection Act:

• Specific reference to release of employee rights under the ADEA by name;
• Advice in writing that the employee should consult an attorney before signing;
• A 21-day period to consider the employer’s offer before signing (45 days in the event of a “group layoff” consisting of two or more employees);
• A seven-day period during which the employee may revoke his or her signature after signing; and
• For a group layoff, the employer must also provide the employee with information in writing about the “decisional unit” from which the employee was selected for the layoff, eligibility factors for the layoff program, any time limits, and the titles and ages for all employees within the decisional unit who were either selected or not selected for layoff.

The summary correctly notes (with citations to the EEOC’s “Enforcement Guidance” from April 1997 and to 29 C.F.R. § 1625.22(i)(2)) that a release cannot lawfully prevent an employee from bringing a later charge of discrimination with the EEOC nor prevent an employee from participating as a witness in an EEOC investigation. In fact, the EEOC takes the position that obtaining such a promise from an employee constitutes unlawful “retaliation” against the employee.

Some Overreaching Apparent

The EEOC’s summary includes an appendix with a suggested “Employee Checklist” for employer severance agreements containing releases. For the most part, the checklist merely rehashes the same validity requirements outlined above for the statutes administered by the EEOC. Readers should be cautioned, however, that the appendix appears to overreach by providing employees with gratuitous “tips” falling outside the EEOC’s normal area jurisdiction, with questionable results. These comments are unfortunate because they are likely to confuse employees and make them unduly suspicious of properly drafted agreements and well-intentioned efforts to resolve matters.  Specifically, in the final sentence of the appendix, the EEOC document advises:

"Make sure that your employer is not asking you to release your claims for unemployment compensation benefits, workers compensation benefits, claims under the Fair Labor Standards Act, health insurance benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA), or claims with regard to vested benefits under a retirement plan governed by the Employee Retirement Income Security Act (ERISA).”

Unemployment and workers compensation benefits are creatures of state law, and while many states (including Ohio) prohibit voluntary waivers of these rights, the EEOC’s broad assertion to a national audience, on a topic generally outside the bounds of equal employment opportunity, probably assumes too much.

The EEOC’s glib dismissal of proposed waivers for COBRA rights seems similarly flawed. The U.S. Department of Labor, which has primary responsibility for administering COBRA and which has published is own set of “FAQs for Employees About COBRA Continuation Health Coverage,” specifically contemplates what happens “if a qualified beneficiary waives COBRA coverage,” including methods for later revoking such waivers. Certainly employees might want to think twice before signing such a waiver, but the EEOC’s attempt to give employees advice outside its area of expertise is both unusual and inaccurate. 

Finally, the EEOC’s suggestion that employees should reject a release that waives ERISA claims does not seem to be based on any actual legal restriction prohibiting such waivers.   ERISA does prohibit certain types of waivers, and rights arising in the future cannot be waived. But it is well established that potential ERISA claims can be waived by releases that are knowing and voluntary – the same requirement used by the EEOC for the statutes it actually administers. See, e.g., Leavitt v. Nw. Bell Tel. Co., 921 F.2d 160, 162 (8th Cir. 1990).

With these exceptions, the EEOC’s new publication is a useful compilation. As always, employers are well-advised to obtain help from a qualified professional before drafting their own release agreements for use in reductions in force or other employment terminations.

In recent years, a growing number of state and local laws have been adopted prohibiting discrimination based on transsexuality, transgender status, and other gender identity traits. But, federal employment discrimination law does not identify gender identity or similar traits as a protected class. Despite the absence of specific protection under the statute, some federal courts have found discrimination based on gender identity illegal under Title VII on a theory of sexual stereotyping. The theory is that taking action against a man, for instance, going through or contemplating a sex change punishes that man for not adhering to stereotypical male attributes and amounts to sex discrimination. The Court of Appeals for the Sixth Circuit reached that conclusion concerning transgender status in Smith v. Salem, 378 F.3d 566 (6^th Cir. 2004). 

The judge in the Schroer case went even further, though. That judge concluded not only that the Library of Congress was guilty of sexual stereotyping in violation of Title VII but also that the Library’s decision was sex discrimination on its face. Specifically, the judge concluded that the Library was willing to hire Ms. Schroer when it understood her to be a man but later withdrew the offer after it learned that she would be, at some point in the future, a woman. The judge concluded that such decisionmaking was pure and simple sex discrimination. He likened it to discrimination against a person who converts from one religion to another and concluded that discrimination based on a sex change is sex discrimination under Title VII.

The Schroer case is a reminder to all of the importance of keeping the focus in employment-related decisions on those things that are clearly job-related. Any decision that is influenced by sexual stereotyping or presumptions about persons who do not conform to majority attitudes or “labels” are very likely to run afoul of employment discrimination law.

Applying the newly-announced standard to the case before them, the Sixth Circuit held that the plaintiff presented sufficient evidence that race was a motivating factor in his downgraded performance evaluation.  Accordingly, the Court held that the company was not entitled to summary judgment on the plaintiff’s mixed-motive claim.

Despite these lurid allegations, the trial court initially ruled that the secretary’s claim could not survive a motion to dismiss because the harassment was not aimed specifically at her, was not based on her sex, and did not create a sufficiently hostile work environment.  The Second Circuit, however, disagreed on all counts on appeal. In particular, the appellate court held that the conduct was aimed at the secretary since the supervisor viewed the sexually-explicit websites on her work computer and required her to open pornographic video tapes delivered in his mail as part of her secretarial duties.  The court also held that, based on the facts alleged, a jury could legitimately decide that the conduct was offensive to women and intended to provoke the secretary’s reaction as a woman.  Taken together, these findings allowed the Second Circuit to rule that the conduct could be found by a jury to be severe enough to interfere with the secretary’s ability to perform her job functions.  As a result, the Second Circuit reinstated the secretary’s claim.

As for preventive steps, Internet monitoring or filtering that screens out pornographic material likely would have helped to uncover some of the supervisor’s alleged conduct before it became a major problem.  Even without these tools, though, it is hard to believe that this kind of behavior could have gone unnoticed (and uncorrected), particularly since the secretary claims to have complained about the conduct to the college’s EEO director and an associate vice president over a three-year period.  Indeed, she even showed them a collection of 36 tapes that the supervisor kept in his office.  Obviously, discovery may show that the facts regarding the supervisor’s conduct and the university’s knowledge are not as clear cut as alleged in the complaint.  Nevertheless, if even a small portion of the supervisor’s alleged conduct actually happened, it merited strong preventive measures at the earliest possible moment.  The lesson here is simple: keeping the pornography out of the office will help keep you out of court.