All Hail the King It’s so right now. It’s hot, hot, hot. The "it" thing. Pink is the new black and retaliation is the new sex harassment. Used to be that if you did what you could to make sure nobody touched anybody, never complimented anybody’s dress or (heaven forbid!) fell in love with a co-worker, you could sleep at night and feel pretty safe that no process server was going to come a-callin’. Those days are gone folks.

Employment law attorneys have spent the last few years with their mouths agape at some of the verdicts coming out of retaliation cases, so anybody with an ear to the ground probably isn’t too surprised by the incarnation of retaliation as King of Employer Liability. But an opinion issued by Judge Titus of the U.S. District Court in Greenbelt in August of this year tiptoed past the sleeping guards. Sound the alarm! Wake up! The King is coming and he’s swinging his scepter Charlie Chaplin style.

Okay, so I may be exaggerating a bit for dramatic effect. But the District Court’s recent opinion in a retaliation case brought by the EEOC on behalf of a former COMSAT employee against Lockheed Martin after the two merged puts in black and white for the first time in Maryland law two holdings that ought to make employers rethink how they offer severance benefits, as well as how they write those necessary releases that accompany severance offers. First, the court held that you can’t condition severance pay on dismissal of an EEOC charge filed by the employee. Second, the court held that a release that waives an employee’s right to file charges with the EEOC is facially retaliatory and unlawful. Stop. Read that last part again. This means that, in addition to being unenforceable, your release might subject you to liability for retaliation. (Are you listening, Alanis? This is irony.)

Retaliation claims aren’t that big a surprise. It’s the law. It’s the application of retaliation law to severance agreements that’s novel. Unlawful retaliation occurs when an employer takes some sort of action against an employee because the employee has invoked some right or engaged in some other protected activity like complaining of harassment. In the Lockheed case, Lockheed terminated an employee who had been a long time COMSAT employee before the merger. The company offered severance in exchange for a release. She refused to sign and, before her termination was final, she filed a claim with the EEOC alleging unlawful termination on the basis of age, race and gender discrimination. Lockheed told her that she could still have the severance package previously offered but only if she signed the release and withdrew her EEOC charge. She refused and claimed she had a right to the severance regardless of whether she withdrew her charge. Lockheed stood firm. Lockheed was wrong, so says Judge Titus.

Lockheed tried to convince the court that Lockheed couldn’t be liable for placing a condition on the employee’s severance, even if that condition was the withdrawal of her EEOC charge, because it’s not required to offer severance to anyone. But employers are not entitled to dole out employment related benefits in a discriminatory fashion. In other words, the fact that employers are entitled to offer severance to everyone or no one is irrelevant. Lockheed’s mistake was that it denied its employee severance benefits so long as she pursued her EEOC charge. Filing an EEOC charge is the classic “protected activity.” Judge Titus reasoned that withdrawal of the severance offer on the basis that she refused to dismiss her charge of discrimination was tantamount to punishing her for invoking her civil rights. That’s retaliation.

On the second point – the release Lockheed presented to its employee – the court held that an employer’s offer of severance benefits in exchange for an employee’s waiver of the right to file an EEOC charge is facially retaliatory and unlawful. And Lockheed’s release did just that – it effected a waiver of any and all claims and charges of any sort, including charges with the EEOC. Judge Titus ruled that such a broad waiver of rights was unlawful where receipt of severance benefits was the carrot dangled in exchange for the employee’s agreement never to invoke any civil rights over which the EEOC has jurisdiction – which includes just about all forms of unlawful discrimination. It’s against public policy, and it’s retaliation too said Judge Titus. Denying an employment benefit (severance) because the employee refused to give up protection of her civil rights is retaliation for the employee’s election to preserve her right to complain about harassment. The court was careful, though, to distinguish between a release that waives the right to file a private lawsuit or to recover money damages in connection with an EEOC charge from a release that waives an employee’s right to complain or to participate in an EEOC investigation. Judge Titus, and other courts that agree with him, based the distinction on public policy and the inherent public interest in EEOC enforcement of anti-discrimination laws.

Lockheed’s neat and tidy release was judged worthless to protect it from the EEOC’s lawsuit on behalf of the former employee. Worse yet, Lockheed’s release was ruled “facially retaliatory.” There was nothing nefarious or unusual about Lockheed’s release. It was standard language that most employment lawyers in town use. I did a double take and shook off my post-lunch malaise to read and re-read this sucker. This is not yet the undisputed law of the land in Maryland, but this is big stuff – and new stuff in Maryland. And Judge Titus’ decision is well-based on the law of other federal circuits, so it stands to reason that employers would be foolhardy to ignore it. Goodness knows how many employees – casualties of mergers and other terminations – are, as I wrote this, digging through that box in the trunk of the car looking for that crumpled up release. Next time you want to offer an employee severance in exchange for a release, call your lawyer and spend a few pennies on a rewrite of your standard release language. Better safe than sorry. Just ask Lockheed Martin.

Wake up and sit up straight. Here comes the King.

Labels: attorney, Employment, law, retaliation claim

  5:20 PM •