Court offers 3 clauses you’d be wise to include in severance agreements

by Christian Schappel

The 7th Circuit Court of Appeals just threw out an EEOC lawsuit against CVS that attacked some pretty common language found in severance agreements. But in doing so, it applauded three clauses CVS used. 

We’ll get to those clauses in a second. But first, it’s important to know why the EEOC took issue with CVS’ severance agreements.

The EEOC sued CVS, claiming the pharmacy chain’s severance agreements with employees contained a general release of claims and a covenant not to sue that illegally restricted worker’s rights to file charges or cooperate with the agency.

The lawsuit was fairly troubling to employers because the language the EEOC was attacking is fairly boilerplate — at least as far as severance agreements are concerned.

Here are two clauses of CVS’ agreements the EEOC was challenging (they should sound familiar):

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