Don’t Sign Away Discrimination Claims to Get Severance Pay

Finger pointing to show where to sign document

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Trinity Health Corporation on Dec. 20 settled charges brought by the EEOC over the employer’s alleged policy of denying or delaying severance to employees who file discrimination charges after leaving their jobs.

In general, employers cannot punish employees who exercise their right to file discrimination charges with the EEOC – it violates Title VII of the Civil Rights Act of 1964, which defines unlawful employment practices.

But Becky Thompson’s case is not as simple as it sounds, according to employment lawyer Rich Cohen, who wrote about the case on his firm Fox Rothschild’s Employment Discrimination Report.

 

Trinity on EEOC’s Radar

In the settlement, Trinity agreed to stop the practice and pay $25,000 to an employee whose severance had been withheld after she brought charges to the EEOC, according to the agency.

“Additionally, Trinity agreed that it will not in the future require employees to choose between receiving severance benefits from them or relief through the EEOC process as a condition of receiving their severance payments,” said the EEOC.

This is not Trinity’s first unpleasant brush with the EEOC. The agency sued the health company in 2011 for sexual harassment and retaliation. Trinity permitted employee Deborah Chisholm to be sexually harassed and then fired her when she complained about it, according to the EEOC. That case is still apparently active.

 

Common Worry over Signing Agreement

Richard Cohen

While it’s clear that employees can always file discrimination charges even if they sign a severance agreement, they often worry that the severance payment will be yanked if they decide to file with the EEOC – as it was in Thompson’s case.

“It can be yanked,” Cohen tells Lawyers.com, “but it’s not likely” – especially if you have a good case against the employer for any type of discrimination. Employers often rely on the fact that employees don’t know their rights or just need the money so much that they will sign anything.

“Most of the time, a well-counseled employer will have someone sign an agreement with a release for every possible claim. In order for that to be enforceable, the employer has to give the employee more than they would be otherwise be entitled to under its severance policy,” says Cohen.

What that means is that if your employer is only offering you the standard severance that the company provides for and nothing extra, it cannot require you to waive your right to file claims in order to get the severance money. If it does, you will have a retaliation claim to add to any other claims you might have against it. 

 

When to Take the Money and Run

For a severance agreement’s release to be enforceable against an employee, it must offer her something in exchange for releasing those claims ­– which can be worth a lot of money – and it should be a substantial amount.

If your employer’s standard severance policy is to offer departing employees one week’s pay for every year worked, for example, and you worked for five years, your employer must offer you more than $5,000 in the severance agreement in order for it to be enforceable against you.

A lot of people don’t know this, but if there is a standard severance policy in place, you are entitled to that money regardless of whether you sign the severance agreement or not, says Cohen.

“If you have a good claim, don’t sign it away,” Cohen says. Know what your company’s severance policy says. And if they offer you too little money essentially “in exchange” for your potential claim, you can refuse to sign the agreement, demand your severance, and still file the discrimination claim.

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