Drafting Severance and Confidentiality Agreements Amid New EEOC and - PowerPoint PPT Presentation

Presenting a 90-Minute Encore Presentation of the Webinar with Live, Interactive Q&A Drafting Severance and Confidentiality Agreements Amid New EEOC and NLRB Scrutiny Navigating Agency Requirements for Non-Disparagement, Employee Behavior and Confidentiality Provisions TUESDAY, NOVEMBER 4, 2014 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Kerry E. Notestine, Shareholder, Littler Mendelson , Houston Christina A. Stoneburner , Partner, Fox Rothschild , Roseland, N.J. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .

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Drafting Severance and Confidentiality Agreements Amid New EEOC and NLRB Scrutiny Tuesday, November 4, 2014

Presented by: Kerry E. Notestine Littler, Dallas knotestine@littler.com 713.652.4748 Christina A. Stoneburner Fox Rothschild, Roseland, N.J. cstoneburner@foxrothschild.com 973.994.7551 5

Agenda  EEOC requirements and legal framework for severance agreements  NLRB requirements and legal framework – Confidentiality provisions – Employee behavior and conduct policies – Non-disparagement provisions  Drafting best practices 6

A EEOC Requirements and Legal Framework for Severance Agreements Kerry Notestine, Littler 7

Background to Current Issues  This is NOT just about the OWBPA and Age issues  EEOC Enforcement Guidance on non-waivable employee rights under EEOC enforced statutes, EEOC Notice 915.002 (4/10/97)  29 USC § 626(f)(4) codifies this obligation for claims under the ADEA.  EEOC v. Eastman Kodak, 2006 case under Title VII and the ADEA. 8

Kodak Consent Decree “Except as described below, you agree and covenant not to file any suit, charge or complaint against Releasees in any court or administrative agency, with regard to any claim, demand, liability or obligation arising out of your employment with Kodak or separation therefrom. You further represent that no claims, complaints, charges, or other proceedings are pending in any court, administrative agency, commission or other forum relating directing or indirectly to your employment by Kodak. Nothing in this Agreement shall be construed to prohibit you from filing a charge with or participating in any investigation or proceeding conducted by the EEOC or a comparable state or local agency. Notwithstanding the foregoing, you agree to waive your right to recover monetary damages in any charge, complaint, or lawsuit filed by you or by anyone else on your behalf.” Consent Decree, EEOC v. Eastman Kodak (W.D.N.Y. October 11, 2006). 9

EEOC v. Baker & Taylor  EEOC sues Baker & Taylor May 20, 2013  EEOC and Baker & Taylor enter into sweeping consent decree July 2013  “Employees retain the right to participate in any action [before the EEOC or comparable state or local agencies] and to recover any appropriate relief .” 10

CVS and CollegeAmerica Cases 11

EEOC v. CVS Pharmacy  EEOC sues CVS Pharmacy on February 7, 2014  EEOC alleges “Pattern or Practice” of unlawful conduct  Release agreement attached to Complaint  Covenant not to Sue includes Charge Carve- out 12

EEOC v. CVS Pharmacy  Provisions challenged • Covenant not to Sue • Non-Disparagement and Non- Disclosure • Notification • Remedies including Attorneys’ Fees • Five-Page Single Spaced Document 13

EEOC v. CVS Pharmacy  Motion to Dismiss Filed on 4/18/14  No Unlawful Discrimination  No Pattern & Practice  EEOC failed to Conciliate  Amicus Curiae Brief by Retail Litigation Center  Five Page Release is not Burdensome  Fully Briefed and Awaiting Decision 14

EEOC v. CollegeAmerica  EEOC Phoenix District Office sues CollegeAmerica in Denver on 4/30/14  Employee (Potts) Resigned  Signed Settlement Agreement  $7000 payment and No Dispute on Unempl.  Agreement Not to Contact Gov’t Agency  Forward Complaints and Non-Disparagement 15

EEOC v. CollegeAmerica  Allegedly disparaging emails with another former employee that are forwarded to Company  Potts files Charge  Company sues Potts 7 days later  Potts files two Retaliation Charges 16

EEOC v. CollegeAmerica  Potts and 4 Form Agreements Attached to Complaint  Prohibits Filing Charge/No Carve Out  EEOC challenges Additional Provisions  No Claims  Certification of Non-Compliance Disclosure  Severability Clause  CollegeAmerica filed MTD which is fully briefed and awaiting Decision  MeToo Motion to CVS 17

A NLRB Requirements and Legal Framework Christina A. Stoneburner, Fox Rothschild

Can a Severance Agreement Waive Claims Under the NLRA?  General Rule is that Severance Agreements should be treated as any other non-Board settlement and Board would defer after examining: ─ Whether the parties have agreed to be bound, and the position taken by the General Counsel regarding the settlement; ─ Whether the settlement is reasonable in light of the violations alleged, the risks inherent in litigation, and the stage of litigation; ─ Whether there has been any fraud, coercion, or duress by any party in reaching the settlement; and ─ Whether the respondent has a history of violations of the Act or has breached past unfair labor practice settlement agreements ( Independent Stave Co., 287 NLRB 740, 743 (1987) 19

Can a Severance Agreement Waive Claims Under the NLRA? (cont.)  NLRB may or may not defer to the terms of the severance agreement  Even an employee who signed a severance agreement may later file an unfair labor practice charge or recover money in the event a charge is filed on the employee’s behalf 20

Why Has the NLRB Been Actively Reviewing Severance Agreements?  Memorandum OM 08-13 (December 5, 2007)  Issued to all Regional Directors Calling for them to Actively Investigate Waivers 21

Confidentiality and Non-disparagement Provisions: Why Does the NLRB Care?  NLRA Section 7: “ Employees shall have the right to self- organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection . . .” 22

Confidentiality and Non-disparagement Provisions: When Did the NLRB Start Caring?  Not a new concept  See, for example, Metro Networks, Inc,. and American Federation of Radio and Television Artists, Philadelphia Locals, AFL-CIO , Cases 4-CA-26812 and 4-CA-27207 (September 28, 2001)  Violation of Section 8(a)(4) where fired employee for union activity and then gave release with unlawful confidentiality provision: ─ Stating employee would not “publish, publicize, disseminate, communicate or cause to be published, information concerning your employment . . . , the existence of this Agreement or the terms described herein except to your immediate family, attorneys, accountants, or tax advisors.” 23

But Why the Sudden Focus?  In part, because this has become an enforcement issue at the federal level with the EEOC  As overall union representation declines (now approximately 8%), NLRB has been more aggressive about enforcing rights to engage in concerted activity in actively reviewing handbooks, social media policies and severance agreements 24

Confidentiality and Non-disparagement Provisions: What Does the NLRB Care About?  Broad provisions that prohibits or would reasonably lead an employee to believe that they are prohibited from saying anything about the employer or that restrict right to concerted activity 25

Confidentiality and Non-disparagement Provisions: How Much Does the NLRB Care?  Not uncommon for NLRB to include in Notices to Employees where violation is found that the employer “will not require you to sign a severance agreement or any agreement that contains confidentiality or non-disparagement clauses that restrict you from engaging in protected concerted activities ─ See Board Decision in Pratt (Corrugated Logistics), LLC and Teamsters Local 773 , Cases 04-CA-07963, 04-CA-079858, 04-CA-079976, and 04-RC-080108 (February 21, 2014) 26