Severance Waivers Become Endangered Species

When involuntary employment terminations become necessary, employers often seek protection from possible post-employment claims by conditioning severance pay on the signing of a general release and agreement not to sue. As a general rule, such waivers are enforceable if they are 'knowing and voluntary.' Less clear, however, is under what circumstances an employer may condition severance payments on a promise by the departing employee that he or she will not pursue a charge with the Equal Employment Opportunity Commission (EEOC) in connection with an allegation of discrimination, harassment, or retaliation. <br>Recently, increased litigation activity by the EEOC signals renewed agency focus on severance arrangements that seek to limit a former employee's ability to participate in any manner in EEOC administrative proceedings.