On October 7, 2014, U.S. District Court Judge John W. Darrah issued a Written Opinion and Order granting CVS’s Motion for Summary Judgment and dismissing the EEOC’s lawsuit against CVS. Equal Employment Opportunity Commission v. CVS Pharmacy, Inc., No. 14-cv-863 (N.D.Ill.2014). In this lawsuit, the EEOC alleged that CVS’s Severance Agreement is invalid and unenforceable under Title VII of the Civil Rights Act of 1964. The case was closely watched by employment law attorneys because the terms and conditions of CVS’s Severance Agreement are typical of those commonly used by employment lawyers in severance or separation agreements. Some employment law attorneys were concerned that invalidation of the standard terms and conditions of severance or separation agreements would create obstacles to negotiating settlements of employment law claims. The incentive for most employers to pay employees monetary settlements of employment law claims is to receive a release of claims and an agreement to not sue in exchange for the payment. If these terms were declared unenforceable, the incentive would be lost, and it would take some very creative lawyering to structure viable settlements of employment law claims. In view of Judge Darrah’s dismissal of the EEOC’s lawsuit, this will not be the case.

In his Written Opinion, however, Judge Darrah did not reach the issue of whether or not the terms and conditions of CVS’s Severance Agreement are enforceable. Instead, he dismissed the lawsuit on the ground that the EEOC did not fulfill the administrative prerequisite of attempting to conciliate with CVS before filing the lawsuit. The EEOC may appeal the dismissal to the 7th Circuit.