Equal Employment Opportunity Commission v. Sundance Rehabilitation Corp.

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 06a0390p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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Plaintiff-Appellee, -
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,
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No. 04-4178
v.
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SUNDANCE REHABILITATION CORPORATION, -
Defendant-Appellant. -
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Appeal from the United States District Court
for the Northern District of Ohio at Cleveland.
No. 01-01867—Lesley Brooks Wells, District Judge.
Argued: December 1, 2005
Decided and Filed: October 24, 2006
Before: BOGGS, Chief Judge; BATCHELDER, Circuit Judge; COHN, District Judge.*
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COUNSEL
ARGUED: Dean E. Westman, KASTNER, WESTMAN & WILKINS, Akron, Ohio, for Appellant.
Daniel Travis Vail, EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Washington, D.C.,
for Appellee. ON BRIEF: Dean E. Westman, Thomas Evan Green, KASTNER, WESTMAN &
WILKINS, Akron, Ohio, for Appellant. Daniel Travis Vail, EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION, Washington, D.C., for Appellee. Ann E. Reesman,
MCGUINESS, NORRIS & WILLIAMS, Washington, D.C., for Amici Curiae.
BOGGS, C. J., delivered the opinion of the court in which, BATCHELDER, J., joined.
COHN, D. J. (p. 13), delivered a separate dissenting opinion.
*
The Honorable Avern Cohn, United States District Judge for the Eastern District of Michigan, sitting by
designation.
1
No. 04-4178 EEOC v. SunDance Rehabilitation Corp. Page 2
_________________
OPINION
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BOGGS, Chief Judge. Defendant SunDance Rehabilitation Corporation (“SunDance”)
appeals the district court’s grant of summary judgment in favor of the Equal Employment
Opportunity Commission (“EEOC”) on cross-motions for summary judgment. The EEOC sued
SunDance under the antiretaliation provisions of the Americans with Disabilities Act (“ADA”),
42 U.S.C. §§ 12117(a) and 12203; Age Discrimination in Employment Act (“ADEA”), 29 U.S.C.
§ 623(d); Equal Pay Act (“EPA”), 29 U.S.C. § 215(a)(3); and Title VII of the Civil Rights Act of
1964 (“Title VII”), 42 U.S.C. § 2000e-3(a), alleging that the separation agreement that SunDance
offered to discharged employees in exchange for severance pay not otherwise owed to the employees
violates those statutory antiretaliation provisions. The “Separation Agreement, General Release,
and Covenant Not to Sue” (“Separation Agreement”) offers severance pay in exchange for, among
other things, promises not to sue or file an administrative charge and not to make any statement or
take any action that would reflect negatively on SunDance. The Separation Agreement contains a
provision whereby SunDance has the right to return of the severance pay, any other damages, and
attorneys’ fees and costs, in the event of a violation of the agreement’s terms by a releasor.
The district court held that the separation agreement constitutes facial retaliation under the
antiretaliation statutory provisions to the extent that it conditions severance pay on a promise not
to file a charge with the EEOC. We reverse.
I
Elizabeth Salsbury, a speech language pathologist employed by SunDance, was notified by
letter from SunDance dated February 26, 1999 that the company was compelled to reduce its
workforce and that Salsbury’s job would be terminated effective March 1, 1999. The letter informed
Salsbury that she would receive 80 hours’ worth of severance pay after signing a separation
agreement and general release. Neither Salsbury nor any other similarly situated employee was
otherwise entitled to any amount of severance pay.
On March 5, 1999, SunDance mailed Salsbury a “Separation Agreement, General Release,
and Covenant Not to Sue” (“Separation Agreement”). That Separation Agreement, which lies at the
heart of this case, states in relevant part:
1. Severance Pay: Upon the execution of this Release by Elizabeth Salsbury
and its delivery to Company, Company will, as full and complete consideration and
severance: pay in one lump sum an amount equal to 80 hours of pay at the base rate
. . . . Releasor promises and agrees not to make any statements or take any actions
that would reflect negatively upon the Company or its representatives. Failure of the
Releasor to comply with this agreement will result in the immediate repayment by
Releasor of the total severance amount to Company as outlined in this paragraph.
The parties acknowledge and agree that this severance pay exceeds any and all pay
to which Releasor may have been entitled from the Company pursuant to law. . . .
3. General Release: In consideration of the payment made to Releasor by
Company, Releasor . . . does hereby voluntarily and knowingly release and discharge
Company . . . from any and all claims, actions, causes of actions, liabilities, demands,
rights, damages, costs, attorney fees, expenses and controversies of any kind and
description whether known or unknown, fixed or contingent, arising before the
execution of this Release through the date of this Release. This Release and
covenant not to sue also expressly, and without any limitation of the foregoing
No. 04-4178 EEOC v. SunDance Rehabilitation Corp. Page 3
General Release, includes but is not limited to any claims which Releasor may have
or may assert under federal or state law prohibiting employment discrimination and
claims growing out of any legal restrictions on the rights of Company to terminate
its employees, whether statutory or arising under common law, including without
limitation: Title VII of the Civil Rights Act of 1964 . . . [and] the Americans with
Disabilities Act . . . . Releasor on behalf of herself and other releasors expressly
agrees that she will not institute, commence, prosecute or otherwise pursue any
proceeding, action, complaint, claim, charge, or grievance against Company or any
other released parties in any administrative, judicial or other forum whatsoever with
respect to any acts or events occurring prior to the date hereof in the course of
Releasor’s dealings with Releasee.
6. Miscellaneous: The terms of this General Release are contractual and not
mere recitals. Releasor acknowledges that before deciding to sign this Release,
Releasor had time to review and consider whether to enter into this Release and
Releasor had full opportunity to consult with an attorney. . . .
7. Return of Severance Pay: Releasor understands and agrees that any
violation of the terms of this Agreement may cause irreparable harm and damage to
the Company and will seriously interfere with the purpose of this Agreement, which
is to accomplish a private, unpublished severance agreement and general release of
any and all claims Releasor has or may have against the Company. In the event that
the provisions of this Agreement are violated, Releasor agrees that the Company
shall have the right to seek and obtain injunctive relief and damages in any court of
competent jurisdiction from said violation, including the right to return of the entire
amount of the consideration paid by the Company under this Agreement, plus any
damages proven, including reasonable attorneys’ fees and costs. Releasor further
expressly agrees that if any portion of this Agreement and the release incorporated
herein is ruled to be unenforceable as the result of a challenge brought by the
Releasor to the Agreement’s or release’s validity, then Releasor shall return to the
Company the entire amount of consideration paid hereunder.
8. Confidentiality: Releasor agrees to hold strictly in confidence the terms,
amount, and fact of this Release. Releasor will not disclose any such information,
orally or in writing, to anyone else, including without limitation, any past, present
or future employee of Company.
(Emphasis added.) The Separation Agreement also contains, inter alia, a statement that if any
provision is deemed void or unenforceable, the remaining provisions shall be valid and enforceable,
and a declaration that the Separation Agreement is governed by the laws of Ohio.
In an affidavit, Salsbury said that she thought she had been denied a promotion and was laid
off by SunDance due to her sex, and wanted to file a charge of sex discrimination with the EEOC.
Yet she believed she could not sign the Separation Agreement because it purported to prohibit the
filing of a charge with an agency and would have allowed SunDance to sue her for return of the
severance payment and for attorneys’ fees and costs if she signed the Agreement and subsequently
filed a charge with the EEOC. Salsbury called SunDance’s Human Resources department at its toll-
free number and asked the representative if she could strike the provision that prohibited her from
filing a charge with the EEOC and from suing SunDance, and then sign the Separation Agreement.
The representative told her that she could not and that any alterations would be null and void.
Salsbury replied that “it seemed like the Agreement required me to give up all my civil rights”; the
representative told her that “most terminated employees simply signed the form Separation
Agreement to get their severance payment.” Salsbury decided not to sign the Separation Agreement.
No. 04-4178 EEOC v. SunDance Rehabilitation Corp. Page 4
On April 20, 1999, Salsbury filed a charge with the EEOC. In that charge she alleged that
she had been denied promotion and was laid off on the basis of her sex in violation of Title VII. She
also stated that she had been “asked to sign a separation agreement, general release and covenant
not to sue agreement in order to get a lump sum payment of 80 hours. I did not sign this release
because I believe it violates the Laws administered by the EEOC.”
The EEOC issued a determination dated September 30, 1999, finding no reasonable cause
to believe that Salsbury was discriminated against on the basis of sex with respect to the failure to
promote or lay-off issues, and informing Salsbury of her right to sue on the sex discrimination
allegations. The determination added, however, that the Separation Agreement failed to meet the
criteria “as set forth . . . in 29 U.S.C. § 626(f)(1)(A)-(G)” of the ADEA, as amended by the Older
Workers’ Benefit Protection Act (“OWBPA”), for a knowing and voluntary waiver of a right or
claim under the ADEA; it stated that the Separation Agreement violated 29 U.S.C. § 626(f)(1)(C),
which requires that an individual “not waive rights or claims that may arise after the date the waiver
is executed.” “Moreover,” the determination continued, the waiver provision in the Separation
Agreement “may produce a chilling effect, thereby undermining the Commission’s ability to enforce
the ADEA, Title VII, the EPA and the ADA.” The Separation Agreement’s waiver provisions “may
intimidate or have the effect of intimidating employees and create disincentives for them to
cooperate with the EEOC in safeguarding the public interest.”
On February 12, 2000, Salsbury filed a second charge with the EEOC, alleging that
SunDance retaliated against her in violation of Title VII by failing to rehire her for subsequent
speech language positions, as she claimed it had said it would, because she had filed the earlier
charge. To this second charge, the EEOC responded on July 20, 2000, that it had been unable to
establish a violation of Title VII and notifying her of her right to sue.
In her affidavit, Salsbury stated that about a year after filing her first charge (which she filed
on April 20, 1999), an EEOC investigator told her that “the Separation Agreement’s prohibition
against charge filing was unlawful.” Salsbury then decided to sign the Separation Agreement in
order to obtain the severance payment. However, by the time she signed the Separation Agreement
in March 2000, SunDance had gone bankrupt. She states that she has not received the severance
pay. In toto, slightly over one hundred Ohio employees of SunDance were laid off in the reduction
in force; all of those received the offer of severance pay in exchange for signing the Separation
Agreement; ten, including Salsbury, did not sign the Separation Agreement at that time and did not
receive the severance pay.
On August 1, 2001, the EEOC filed suit against SunDance in the U.S. District Court for the
Northern District of Ohio, alleging violations of the antiretaliation provisions of ADEA, ADA, EPA,
and Title VII. The complaint stated that the EEOC had brought suit “to correct actions undertaken
by Defendant to retaliate against individuals affected by the Defendant’s Separation Agreement,
General Release and Covenant Not to Sue, because of1their right to file a charge with the EEOC or
participate in an EEOC investigation or proceeding.”
The relief sought by the EEOC included a permanent injunction against SunDance to prevent
it from instituting or maintaining the Separation Agreement or any similar plan that “retaliates
because of an employee’s right to file a charge with the EEOC or participate in an EEOC
investigation or proceeding”; an order requiring SunDance to reform the Separation Agreement
expressly to permit employees to file charges with the EEOC and participate in EEOC investigations
or proceedings without losing severance pay and without violating the agreement; and a corrective
1
In its complaint the EEOC did not raise any issue involving the OWBPA.
No. 04-4178 EEOC v. SunDance Rehabilitation Corp. Page 5
notice with a reformed Separation Agreement sent to Salsbury and similarly situated former
employees.
On cross-motions for summary judgment, a magistrate judge recommended granting
summary judgment in favor of SunDance. The district court declined to adopt the magistrate judge’s
report and recommendation, and instead granted summary judgment to the EEOC. EEOC v.
SunDance Rehabilitation Corporation, 328 F. Supp. 2d 826, 828 (N.D. Ohio 2004).
The district court concluded that the Separation Agreement’s conditioning severance pay on
a ban on filing charges with the EEOC constituted facial retaliation in violation of ADA, ADEA,
EPA, and Title VII. Id. at 838. Applying Ohio law to the question of severability, the district court
held that with the exception of the charge-filing ban, the Separation Agreement remained valid and
enforceable. Id. at 839.
In light of its holding that the Separation Agreement “constitutes facial retaliation to the
extent that it conditions severance benefits on an employees [sic] promise not to file a charge with
the EEOC,” the district court found no need to determine whether the EEOC could show a prima
facie case of retaliation in the absence of direct evidence under the McDonnell Douglas burden-
shifting framework–which SunDance argued the EEOC could not do. The district court ordered that
SunDance (and its officers, successors, etc.):
[Are] permanently enjoined from engaging in the institution, maintenance and/or
management of the portion of the April 1999 SunDance Separation Agreement, or
any other similar plan, requiring all employees and former employees to waive their
right to file a charge with the EEOC or participate in an EEOC investigation or
proceeding; and
[Are] permanently enjoined from retaliating because of an employee or former
employee’s right to file a charge with the EEOC or participate in an EEOC
investigation or proceeding; and
[F]orthwith, shall institute and carry out policies, practices and programs which
provide equal employment opportunities for employees who wish to file charges with
the EEOC or participate in an EEOC investigation or proceeding; and
[S]hall make whole . . . Salsbury and other similarly situated employees; [and] shall
reform the April 1999 SunDance Separation Agreement to expressly permit all
employees and former employees to file charges with the EEOC and participate in
EEOC investigations or proceedings without losing their severance pay and without
violating the Separation Agreement and forthwith, shall pay to . . . Salsbury and
other similarly situated employees any and all withheld severance pay with
prejudgment interest; and
[S]hall deliver a corrective notice with a reformed SunDance Separation Agreement
to . . . Salsbury and similarly situated employees. Moreover, all limitations periods
for filing a charge or claim are tolled and will run anew from the date of actual
delivery of the reformed notice; and
[S]hall pay to the EEOC its costs of bringing this action.
On appeal, SunDance argues that the antiretalitation provisions of ADA, ADEA, EPA, and
Title VII do not provide for or recognize “facially retaliatory” conduct by employers; that the EEOC
No. 04-4178 EEOC v. SunDance Rehabilitation Corp. Page 6
had not proved a prima facie case of retaliation under any of the applicable statutes; and that the
district court abused its discretion in its award of injunctive relief.
II
This court reviews de novo a district court’s grant of summary judgment, applying the same
legal standard as the court below. United States v. Dairy Farmers of America, Inc., 426 F.3d 850,
856 (6th Cir. 2005). Summary judgment is appropriate where “the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter
of law.” Fed. R. Civ. P. 56(c).
III
A
The EEOC argues that the Separation Agreement constitutes a per se violation of the
antiretaliation provisions of Title VII, EPA, ADA, and ADEA. The relevant statutory provisions
are as follows:
Title VII, 42 U.S.C. § 2000e-3(a):
It shall be an unlawful employment practice for an employer to discriminate
against any of his employees or applicants for employment . . . because he has
opposed any practice made an unlawful employment practice by this subchapter, or
because he has made a charge, testified, assisted, or participated in any manner in an
investigation, proceeding, or hearing under this subchapter.
EPA, 29 U.S.C. § 215(a)(3):
(a) . . . it shall be unlawful for any person--
....
(3) to discharge or in any other manner discriminate against any employee
because such employee has filed any complaint or instituted or caused to be
instituted any proceeding under or related to this chapter, or has testified or is about
to testify in any such proceeding . . . .
ADA, 42 U.S.C. § 12203(a) & (b):
(a)
No person shall discriminate against any individual because such individual
has opposed any act or practice made unlawful by this chapter or because such
individual made a charge, testified, assisted, or participated in any manner in an
investigation, proceeding, or hearing under this chapter.
(b)
It shall be unlawful to coerce, intimidate, threaten, or interfere with any
individual in the exercise or enjoyment of, or on account of his or her having
exercised or enjoyed, or on account of his or her having aided or encouraged any
other individual in the exercise or enjoyment of, any right granted or protected by
this chapter.
No. 04-4178 EEOC v. SunDance Rehabilitation Corp. Page 7
ADEA, 29 U.S.C. § 623(d):
It shall be unlawful for an employer to discriminate against any of his
employees or applicants for employment . . . because such individual . . . has
opposed any practice made unlawful by this section, or because such individual . . .
has made a charge, testified, assisted, or participated in any manner in an
investigation, proceeding, or litigation under this chapter.
B
The EEOC asserts that SunDance’s offer of the Separation Agreement in exchange for
severance payments to Salsbury and other terminated employees amounts to a violation of the
antiretaliation provisions on the ground that the Separation Agreement is a “preemptive strike
against future protected activity.” The Separation Agreement conditions severance pay on promises
from the terminated employee not to file charges with the EEOC and, according to the EEOC’s
interpretation, not to participate in EEOC proceedings, and then allows SunDance to sue for the
return of the payments if the former employee engages in such protected activity. The EEOC argues
that the Separation Agreement itself constitutes a per se violation of the antiretaliation provisions.
In support of that argument, the EEOC relies heavily on EEOC v. Bd. of Governors of State
Colls. and Univs., 957 F.2d 424 (7th Cir. 1992), which it points to as the only circuit court opinion
to address squarely the legality of what it calls a “preemptive retaliatory policy.” In that case, a
collective bargaining agreement (“CBA”) gave employees a contractual right to an in-house
grievance procedure. Id. at 429. However, a provision of the CBA allowed the employer to
terminate an internal grievance proceeding if an employee sought resolution of the matter in any
other forum, or to refuse to entertain the grievance if the employee pursued the matter in another
forum before initiating an internal grievance. An employee filed a grievance with the union. While
that grievance was being processed, the employee filed a charge with the EEOC, alleging age
discrimination. The employer, implementing the policy embodied in the collective bargaining
agreement, terminated the grievance proceeding as a result of the employee’s filing a charge with
the EEOC. Id. at 426. The EEOC brought suit against the employer, alleging violation of the
antiretaliation provision of the ADEA, 29 U.S.C. § 623(d). Ibid.
In its Board of Governors opinion, the Seventh Circuit noted that the CBA provision at issue
authorized the employer to “take an adverse action (termination of the in-house grievance
proceeding) for the sole reason that the employee has engaged in protected activity (filing an ADEA
claim).” 957 F.2d at 430. It held that the provision “violates Section 4(d) [29 U.S.C. § 623(d)] with
respect to ADEA claimants . . . because it is discriminatory on its face.” Id. at 431. In so doing, the
Seventh Circuit rejected the employer’s argument that it was free to terminate the grievance process
since it had no obligation to provide such a process in the first place. In dismissing that argument
the Seventh Circuit looked to the Supreme Court case Hishon v. King & Spalding, 467 U.S. 69, 75
(1984), a Title VII sex discrimination case. In Hishon, the Court stated that
A benefit that is part and parcel of the employment relationship may not be doled out
in a discriminatory fashion, even if the employer would be free under the
employment contract simply not to provide the benefit at all. Those benefits that
comprise the “incidents of employment,” . . . or that form “an aspect of the
relationship between the employer and employees,” . . . may not be afforded in a
manner contrary to Title VII.
Id. at 75-76.
We do not find the Seventh Circuit’s Board of Governors opinion to be compelling precedent
with respect to this case. In Board of Governors, the employer actually took an adverse action
No. 04-4178 EEOC v. SunDance Rehabilitation Corp. Page 8
against the employee because the employee had pursued the statutorily protected activity of filing
a charge with the EEOC. That action clearly constituted retaliation in violation of 29 U.S.C.
§ 623(d). While the Seventh Circuit addressed what it determined to be the facially retaliatory CBA
provision that purported to authorize that action, that policy was before the Seventh Circuit because
the employer had implemented it and had engaged in a retaliatory act. Here, SunDance has offered
a contract, and, on the record before us, has engaged in no further action.
Courts have held that prohibitions on filing charges with the EEOC are void and
unenforceable as against public policy. The seminal case is EEOC v. Cosmair, Inc., L’Oreal Hair
Care Div., 821 F.2d 1085 (5th Cir. 1987). In Cosmair, the employer terminated Terry, an employee,
after which it offered severance benefits in exchange for a release of claims. Terry signed the
release, and subsequently filed a charge with the EEOC alleging age discrimination. Cosmair
discontinued severance benefits to Terry as a result of his having filed the charge. Id. at 1087. The
Fifth Circuit found that the employer had retaliated against Terry under ADEA by discontinuing
payments to him, and that the release he had signed did not prohibit the filing of charges with the
EEOC. Id. at 1089.
In response to Cosmair’s argument that the release did in fact bar Terry from filing a charge
with the EEOC, the Fifth Circuit held, in the alternative, that “a waiver of the right to file a charge
is void as against public policy.” The Fifth Circuit stated that “[t]he purpose of a charge . . . is not
to seek recovery from the employer but rather to inform the EEOC of possible discrimination.” Id.
at 1090. The court continued:
Allowing the filing of charges to be obstructed by enforcing a waiver of the right to
file a charge could impede EEOC enforcement of the civil rights laws. The EEOC
depends on the filing of charges to notify it of possible discrimination. EEOC v.
Shell Oil Co., 466 U.S. [54, 69 (1984)] . . . . A charge not only informs the EEOC
of discrimination against the employee who files the charge or on whose behalf it is
filed, but also may identify other unlawful company actions.
Ibid. The Fifth Circuit added that while an employee could not waive her right to file a charge with
the EEOC, she could waive the right to recover in her own lawsuit, and that the waiver of a right to
file a cause of action was not invalid because it was conjoined with a void waiver of the right to file
a charge.2 Id. at 1091.
This Circuit has noted approvingly the Fifth Circuit’s rule that a waiver of the right to file
a charge with the EEOC is void as against public policy. EEOC v. Frank’s Nursery & Crafts, Inc.,
177 F.3d 448, 456 (6th Cir. 1999) (“courts have observed that an individual may not contract away
her right to file a charge with the EEOC, as such contracts are void as against public policy.”) (citing
Cosmair, 821 F.2d 1085, 1090). The First Circuit declined to decide whether a charge-filing ban
was void as against public policy in EEOC v. Astra, 94 F.3d 738, 746 (1st Cir. 1996), a Title VII
case, but in a subsequent ADEA/OWBPA case, American Airlines, Inc. v. Cardoza-Rodriguez, 133
F.3d 111, 118 n.7 (1st Cir. 1998), that circuit cited Cosmair for the proposition that an employee
could not waive the right to file a charge with the EEOC.
There can be little doubt that the filing of charges and participation by employees in EEOC
proceedings are instrumental to the EEOC’s fulfilling its investigatory and enforcement missions.
Under Title VII and ADA, the EEOC can only investigate discrimination upon a charge being filed.
2
The validity of waivers of ADEA rights is governed by the OWBPA, 29 U.S.C. § 626, enacted after the Fifth
Circuit’s decision in Cosmair. See generally Oubre v. Entergy Operations, Inc., 522 U.S. 422, 426-27 (1998); Wastak
v. Lehigh Valley Health Network, 342 F.3d 281, 288-95 (3d Cir. 2003).
No. 04-4178 EEOC v. SunDance Rehabilitation Corp. Page 9
See 42 U.S.C. § 2000e-5(b); 42 U.S.C. § 12117(a); EEOC v. Shell Oil Co., 466 U.S. 54, 64 (1984).
The EEOC is not so restricted under ADEA and EPA. See 29 U.S.C. § 626(a); 29 U.S.C. § 211.
A charge filed with the EEOC is not a complaint seeking relief. Rather it informs the EEOC
of possible employment discrimination. See Shell Oil, 466 U.S. at 68 (a Title VII case). Under Title
VII, for example, the filing of a charge allows the EEOC to investigate the alleged discrimination,
and thereafter to bring a civil action against non-government employers; only if the EEOC does not
bring its own suit, and the aggrieved party receives a right-to-sue letter, may the aggrieved party
bring a private suit. See 42 U.S.C. § 2000e-5; EEOC v. Waffle House, Inc., 534 U.S. 279, 291-92
(2002); Frank’s Nursery & Crafts, 177 F.3d at 455-59.
This court has upheld employees’ waivers of claims under ADEA, EPA, and Title VII where
the waiver was executed voluntarily and intelligently. See, e.g., Adams v. Philip Morris, Inc., 67
F.3d 580, 583 (6th Cir. 1995); Shaheen v. B.F.Goodrich Co., 873 F.2d 105, 107 (6th Cir. 1989)
(under pre-OWBPA law). The EEOC acknowledged in oral argument, as it does in its Enforcement
Guidance on Non-Waivable Employee Rights under EEOC Enforced Statutes, EEOC Notice
915.002, at III.C. (Apr. 10, 1997), that employees can validly waive claims under the employment
discrimination laws. Whether a waiver of the right to file a charge with the EEOC is enforceable,
however, is a different question. Given the importance of charge-filing to the EEOC’s investigatory
and enforcement responsibilities, particularly under Title VII and ADA, as well as the rule set out
in the Fifth Circuit’s Cosmair, it may be that the charge-filing ban in the Separation Agreement at
issue here is unenforceable. If so, SunDance would be unable to recover if it attempted to sue under
the Separation Agreement after paying severance to a former employee who had signed the
Agreement and then filed a charge with the EEOC.
But we need not rule on the enforceability of the Separation Agreement or any of its specific
provisions, because that question is not before this court. The EEOC argues that offering the
Separation Agreement itself amounts to retaliation under ADA, ADEA, EPA, and Title VII. To
support its argument that the Separation Agreement constitutes a per se violation of the
antiretaliation provisions of those statutes, the EEOC points primarily to the Seventh Circuit’s
opinion in Board of Governors, which we have already explained to be factually distinguishable
and inapplicable to this case. The EEOC also points to its Enforcement Guidance on Non-Waivable
Employee Rights, EEOC Notice 915.002. In addition to stating that promises not to file a charge
or participate in EEOC proceedings are unenforceable as against public policy, that Enforcement
Guidance adds that “[a]greements extracting such promises from employees may also amount to
separate and discrete violations of the anti-retaliation provisions of the civil rights statutes.” Id. at
II. The EEOC elaborates by explaining that such agreements chill employees’ willingness and
ability to provide information to the EEOC. The Enforcement Guidance cites, inter alia, Board of
Governors and Cosmair. Id. at III.B.
As the EEOC acknowledges, its Enforcement Guidance is entitled to respect only to the
extent of its persuasive power. The Enforcement Guidance does not receive Chevron-type deference
pursuant to Chevron, U.S.A., Inc. v. Natural Res. Defense Council, Inc., 467 U.S. 837, 843 (1984).
See White v. Burlington Northern & Santa Fe Ry. Co., 364 F.3d 789, 812 (6th Cir. 2004) (en banc)
(EEOC guidelines in a Compliance Manual “constitute a body of experience and informed judgment
to which courts and litigants may properly resort for guidance.”) (quoting Meritor Sav. Bank, FSB
v. Vinson, 477 U.S. 57, 65 (1986), which in turn quotes Skidmore v. Swift & Co., 323 U.S. 134, 140
(1944)). See also Nat. R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 111 n.6 (2002) (“[W]e have
held that the EEOC’s interpretive guidelines do not receive Chevron deference.”) (citations omitted);
Christensen v. Harris County, 529 U.S. 576, 587 (2000) (stating that interpretations contained in
enforcement guidances lack the force of law and do not warrant Chevron-style deference; they “are
‘entitled to respect’ under our decision in Skidmore v. Swift & Co., 323 U.S. 134, 140 . . . (1940),
but only to the extent that those interpretations have the ‘power to persuade,’ ibid.”).
No. 04-4178 EEOC v. SunDance Rehabilitation Corp. Page 10
The Supreme Court, in Robinson v. Shell Oil Co., 519 U.S. 337 (1997), a case in which the
Court held that the protections of Title VII’s antiretaliation provision extended to former employees,
noted that one of the primary purposes of antiretaliation provisions is “[m]aintaining unfettered
access to statutory remedial mechanisms.” Id. at 346. Similarly, this court, in EEOC v. Ohio Edison
Co., 7 F.3d 541 (6th Cir. 1993), stated that a majority of courts have been willing to construe Title
VII and the antiretaliatory provisions of the EPA and ADEA broadly, “in order not to frustrate the
purpose of these Acts, which is to prevent fear of economic retaliation from inducing employees
‘quietly to accept [unlawful] conditions.’” Id. at 544.
Keeping those statutory purposes in mind, we are not persuaded by the EEOC’s argument
that SunDance’s mere offer of the Separation Agreement to all employees terminated in the
reduction in force, without more, amounts to facial retaliation under the four statutes at issue here.
The language of the Separation Agreement probably does not prevent mere participation in EEOC
proceedings, and is unenforceable if it does. And, as we have noted, the charge-filing ban may be
unenforceable; but its inclusion in the Separation Agreement does not make SunDance’s offering
that Agreement in and of itself retaliatory.
In sum, the employees of SunDance have not been deprived of anything by the offering of
the Separation Agreement. Those who choose to accept it are better off, by receiving a benefit that
was not “part and parcel of the employment relationship,” as was the case in Hishon where the
failure to provide that benefit led to the successful discrimination charge. Those employees who
reject the agreement obviously do not give up any rights. And, as we have noted above, employees
may, if they wish, accept the agreement and argue later that parts of it may be unenforceable under
existing or expanded precedent. Under these circumstances, simply offering the Agreement is not
facially discriminatory. Accordingly we reject the EEOC’s argument that SunDance’s Separation
Agreement amounts to a facial violation of the antiretaliation provisions of the equal employment
opportunity statutes.
C
The EEOC is also unable to establish a prima facie case of retaliation under the McDonnell-
Douglas burden-shifting framework, which it acknowledges is the “more traditional” retaliation
analysis. That analysis requires that the plaintiff, in the absence of direct evidence of retaliation,
establish a prima facie case of retaliation by showing that: 1) the employee engaged in protected
activity; 2) the employer knew of the protected activity; 3) the employer thereafter took an adverse
employment action; 4) there is a causal connection between the protected activity and the adverse
action. See Singfield v. Akron Metro. Hous. Auth., 389 F.3d 555, 562-65 (6th Cir. 2004) (Title VII);
Weigel v. Baptist Hosp. of E. Tenn., 302 F.3d 367, 381 (6th Cir. 2002) (ADEA); Sullivan v. River
Valley School Dist., 197 F.3d 804, 814-15 (6th Cir. 1999) (ADA).
With respect to the first part, Salsbury engaged in no protected activity prior to receiving the
Separation Agreement from SunDance. The EEOC argues that Salsbury’s protected conduct was
opposition, as she asked SunDance’s human resources representative if she could strike the charge-
filing ban and waiver of claims because she thought they required her to give up her civil rights.
The EEOC then asserts that, with knowledge and because of her opposition, SunDance took the
adverse action of refusing to pay Salsbury severance benefits.
Even if Salsbury’s statements to the human resources representative did amount to protected
activity (a dubious proposition, as the “opposition” would only have been the personal declining of
an offered contract), and SunDance knew of that protected activity, Salsbury suffered no adverse
employment action when SunDance did not pay her the severance benefits, to which she was not
otherwise entitled, when she refused to sign the Separation Agreement. This court has defined an
adverse employment action as a “materially adverse change in the terms and conditions of
No. 04-4178 EEOC v. SunDance Rehabilitation Corp. Page 11
[plaintiff’s] employment.” Smith v. City of Salem, 378 F.3d 566, 575 (6th Cir. 2004) (quoting
Hollins v. Atlantic Co., 188 F.3d 652, 662 (6th Cir. 1999)). “Examples of adverse employment
actions include firing, failure to promote, reassignment with significantly lower responsibilities, a
material loss of benefits, suspensions, and other indices unique to a particular situation.” Smith v.
City of Salem, 378 F.3d at 575-76 (quoting Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 761
(1998)).
Several courts have found that declining to pay severance or settlement amounts (not
otherwise due) when an employee refused to sign a waiver or release does not amount to an adverse
employment action in the retaliation context. Davis v. Precoat Metals, 328 F. Supp. 2d 847, 849,
852-53 (N.D. Ill. 2004); Barriera v. Bankers Trust, No. 98 Civ. 3641, 2003 WL 22387099, at *8
(S.D.N.Y. Oct. 20, 2003) (unpublished); Hansen v. Vanderbilt Univ., 961 F. Supp. 1149, 1153 (M.D.
Tenn. 1997); Jackson v. Lyons Falls Pulp & Paper, Inc., 865 F. Supp. 87, 94-95 (N.D.N.Y. 1994).
See also Miller v. Eby Realty Group, 241 F. Supp. 2d 1247, 1255-57 (D. Kan. 2003) (employer’s
withdrawal of offer of severance payments beyond those to which employee already due, after
employee informed employee he had hired an attorney to investigate age discrimination, was not an
adverse action). Cf. Flannery v. Recording Industry Ass’n of America, 354 F.3d 632, 641-43 (7th
Cir. 2004) (holding that former employer’s denial of consulting work to former employee after
former employee filed charge with EEOC, where that work had been promised him in severance
package agreed to by parties, sufficient to state retaliation claim under ADA and ADEA); Bernstein
v. The St. Paul Cos., Inc., 134 F. Supp. 2d 730, 733-34, 741 (D. Md. 2001) (holding that a jury could
find retaliation where the employee had been unconditionally promised a certain amount of
severance pay but was then told that he could only receive the pay if he withdrew his charge filed
with the EEOC and released the employer from other claims, which he refused to do). SunDance’s
refusal to pay Salsbury severance pay that she was otherwise not due or promised when she did not
sign the Separation Agreement left her in the same position that she had been in before the offer of
the free-standing Separation Agreement. This was not a benefit given or owed to all employees, that
was then withdrawn because of some protected conduct. As such, Salsbury was not adversely
affected, and on these facts the denial of severance pay was not an adverse action for the purposes
of the retaliation analysis.
The cases the EEOC cites in support of its argument that the denial of severance benefits in
this case amounted to an adverse action are inapposite. In White v. Burlington N. & Santa Fe Ry.
Co., 364 F.3d 789, 802 (6th Cir. 2004) (en banc), aff’d, 126 S. Ct. 2405 (2006), this court stated that
taking away an employee’s paycheck for over a month, if motivated by discriminatory intent,
constituted an adverse employment action for purposes of the Title VII retaliation analysis.
Similarly, in Lovejoy-Wilson v. NOCO Motor Fuel, Inc., 263 F.3d 208, 223-24 (2d Cir. 2001), the
Second Circuit held that suspension for a week without pay, even where the employee was later
reimbursed, was an adverse action, because the employee had lost the use of the wages for the period
before reimbursement. In those instances the employer’s action adversely affected the employee;
that was not the case here.
Finally, the EEOC has presented no evidence that SunDance declined to pay severance pay
to Salsbury because of her opposition as expressed to the human resources representative, rather
than simply because she failed to sign the agreement; SunDance offered the Separation Agreement
to other employees terminated in the reduction-in-force, and evidently did not pay severance to any
of those who refused to sign the Agreement, including Salsbury. Accordingly, the EEOC has not
shown causation. See Cronin v. ITT Corp., 737 F. Supp. 224 (S.D.N.Y. 1990), aff’d, 916 F.2d 709
(2d Cir. 1990).
Because the EEOC has not shown a prima facie case of retaliation, we need not proceed with
the rest of the burden-shifting analysis.
No. 04-4178 EEOC v. SunDance Rehabilitation Corp. Page 12
IV
Our decision in this case is a narrow one. SunDance’s mere offer of the Separation
Agreement does not amount to retaliation under ADA, ADEA, EPA, or Title VII, either as a facial
violation of those statutes’ antiretaliation provisions or under the conventional burden-shifting
analysis. SunDance has not tried to enforce the Separation Agreement, and the question of the
enforceability of the Agreement or any of its provisions is not before us.
The decision of the district court is reversed. We therefore need not consider SunDance’s
argument regarding the scope of the injunction issued by the district court.
No. 04-4178 EEOC v. SunDance Rehabilitation Corp. Page 13
_________________
DISSENT
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COHN, District Judge, dissenting. I dissent. The distinction the majority opinion makes
between facial retaliation and what is surely intimidation cuts too fine a line. The majority in effect
says that an employee who believes he or she has an EEOC enforceable claim or at a minimum is
willing to testify in an EEOC enforcement action should sign the agreement, take the money and
then go forward with the EEOC. If SunDance sues for a return of the severance pay, then the
defense of retaliation should be raised and may carry the day.
Any act by an employer which interferes with or chills a protected right is, I believe, contrary
to public policy and in violation of the anti-retaliation provisions of the several statutes involved.
The reasons for this conclusion are adequately supported by the district court’s decision and the
EEOC Notice No. 915.002 issued April 10, 1997, “Enforcement Guidance on Non-Waiveable
Employee Rights Under Equal Employment Opportunity Enforcement Statutes,” and no further
elaboration is necessary.