We continued to believe that the better view of the law does not support the EEOC in this regard. SeeEEOC v. Waffle House, Inc., 534 U.S. 279, 304 (2002) (“If an employee signs an agreement to waive or settle discrimination claims against an employer, for example, the EEOC may not recover victim-specific relief on that employee’s behalf”) (dicta); EEOC v. Cosmair, Inc., 821 F. 2d 1085, 1091 (5th Cir. 1987) (employee “can waive not only the right to recover in his or her own lawsuit but also the right to recover in a suit brought by the EEOC on the employee’s behalf”); EEOC v. Goodyear Aerospace Corp., 813 F.2d 1539, 1543 (9th Cir. 1987) (where back pay sought by the EEOC would go to employee “who has freely contracted away her right to back pay,” the “public interest in a back pay award is minimal,” and therefore “the EEOC's claim for back pay . . . is moot.”).
Although the EEOC must issue a right-to-sue letter within 180 days of receiving a charge, the governing statutes are silent as to what effect such a letter has on the agency’s investigative powers. With no clear-cut statutory answer, the Seventh Circuit looked to analogous cases, including the Supreme Court’s decision in EEOC v. Waffle House, Inc., 534 U.S. 279 (2002). In Waffle House, the Supreme Court held that a charging party’s agreement to arbitrate the claims giving rise to a charge did not prevent the EEOC from pursuing victim-specific judicial relief on behalf of the charging party.
Inc. v. A&S Transportation Co., 621 F2d 519, 524 (2d Cir. 1980) (citation and internal quotation marks omitted).8. Persons Who May Be Compelled to Arbitrate A court is not authorized by the FAA to compel arbitration by parties who are not bound by an arbitration agreement.EEOCv.Waffle House Inc., 534 U.S. 279, 289 (2002); see 9 U.S.C. § 4. If parties have not agreed to arbitrate, the courts have no authority to mandate that they do so.
This is because, while arbitration agreements may prevent an employee from bringing a lawsuit against her employer for discrimination, such arbitration agreements are not binding on the EEOC and do not prevent the EEOC from suing an employer on behalf of an injured employee. Indeed, pursuant to EEOC v. Waffle House, Inc., 534 U.S. 279 (2002), the Supreme Court has held that the EEOC may even seek employee-specific damages on behalf of an injured employee and is not limited strictly to injunctive relief (as had arguably been the case in the past). Consequently, unless the Florida court were to overlook past precedent, it appears unlikely that the EEOC will prevail in its action against Doherty.Nevertheless, the lawsuit filed against Doherty is not without substance to the extent it raises the point that employers may not prohibit or restrict an employee’s right to file a complaint with the EEOC or from cooperating with the EEOC in connection with the EEOC’s investigation of any complaints as to employment discrimination.
In order to avoid running afoul of the law but, at the same time, assuring that it has a valid and enforceable release, employers often insert language in separation agreements that state unequivocally that nothing within the separation agreement should be construed to interfere with an employee’s right to file a charge with, cooperate, or participate in an investigation or proceeding conducted by the Equal Employment Opportunity Commission, or other federal or state regulatory or law enforcement agency.Waiver of Right to Recovery Although employers may not restrict an employee’s right to file or participate in an EEOC proceeding, employers certainly have the right to restrict an employee’s right to recovery. EEOC v. Waffle House, Inc., 534 U.S. 279, 304 (2002) (“If an employee signs an agreement to waive or settle discrimination claims against an employer, for example, the EEOC may not recover victim-specific relief on that employee’s behalf”) (dissenting on other grounds). Without restricting an employee’s right to file or participate in an EEOC proceedings, employers often state in separation agreements that consideration provided to the Employee in the separation agreement shall be the sole relief provided to the Employee for all claims released by the Employee and that Employee shall not be entitled to recover, and agrees to waive any monetary benefits or recovery against the Employer related to any released claim.Non-Disparage Agreements Although the law is well settled that a former employee can waive a right to recover for a Title VII claim, any language within the separation agreement that appears to discourage a former employee from cooperating would likely be subject to attack by the EEOC or state agencies.
Litigation involving the EEOC and class-type claims differs significantly from those brought by individual class members. As the Supreme Court recognized in EEOC v. Waffle House, 534 U.S. 279 (2002), because of the governmental interest in rooting out discrimination, many of the rules that might limit claims brought by individuals may not apply to litigation brought by the EEOC. This issue may arise, for example, in the case where a putative class member has signed an arbitration agreement and could not pursue claims on his or her own behalf, but the agreement may not bar action by the Commission.
For example, as early as 1970, the United States Supreme Court held in General Telephone Co. of the Northwest v. EEOC, 446 U.S. 318 (1970), that “the EEOC is not merely a proxy for the victims of discrimination.” Likewise, in EEOC v. Waffle House, Inc., 534 U.S. 279 (2002), the nation’s high court stated, “The EEOC does not stand in the employee’s shoes.”Given the fact that the EEOC is the plaintiff, rather than your former employee, the defense of judicial estoppel is not available to you.
"We also disagree with Hearst's notion that the charging party can, through his or her actions (that is, by filing suit), divest the EEOC of authority. As the Supreme Court recognized, the EEOC controls the charge regardless of what the charging party decides to do" (citing EEOC v. Waffle House, Inc., 534 U.S. 279, 291 (2002)). the panel further disagreed "with Hearst's conclusion that Title VII's purposes are no longer served by a continuing investigation after the charging party has filed suit.
The EEOC’s policy on arbitration agreements has been upheld by the U.S. Supreme Court by holding that a private mandatory arbitration agreement entered into between an employee and employer does not prevent the EEOC from seeking damages in a separate action brought by the agency on the employee’s behalf. EEOC v. Waffle House, Inc., 534 U.S. 279 (2002). Impact on employersThe Board’s decision has a significant impact on all private sector employers requiring its non-union employees to sign mandatory arbitration agreements.