As we noted earlier this year, the EEOC has begun filing legal challenges to relatively common provisions found in form severance agreements, based on the EEOC's belief that such language unlawfully interferes with employees' rights to file charges with and provide information to it. Specifically, the EEOC has attacked non-disparagement and confidentiality provisions and general release language that it has deemed to be overly broad. The EEOC's position on this issue represents a significant shift from its prior position on what language is acceptable for use in severance agreements.

In February 2014, the EEOC filed a lawsuit against CVS Pharmacy, Inc., claiming that various provisions in CVS's form severance agreement violated Title VII. This lawsuit garnered significant attention and represented the EEOC's most aggressive and significant action to date on this issue. CVS moved to dismiss the lawsuit in April 2014, arguing that the EEOC failed to state a claim upon which relief could be granted.

Last week, U.S. District Judge John Darrah announced at a status hearing that he would grant CVS's motion and dismiss the lawsuit. The court has indicated that it will issue a written opinion confirming and explaining the dismissal by October 2.

After Judge Darrah issues his decision, we will provide an update on the decision and what it means for employers. In the meantime, it appears that CVS has obtained a significant initial victory for employers in what likely will be a long legal fight over the EEOC's current position on common severance agreement provisions.