Labor & Employment Law Daily Last chance agreement requiring waiver of future Title VII claims was materially adverse action
Tuesday, July 3, 2018

Last chance agreement requiring waiver of future Title VII claims was materially adverse action

By Brandi O. Brown, J.D.

The “last chance agreement” a long-time Department of Veterans Affairs employee was forced to sign constituted a materially adverse employment action, a federal district court in Illinois found, because it required the employee to waive his right to file future Title VII claims so that he could keep his job. Furthermore, genuine issues of material fact remained regarding whether the agreement was offered because of his EEO complaints, and therefore his retaliation claim survived the employer’s motion for summary judgment. However, the employee’s race and age discrimination claims would not move forward (Lester v. O’Rourke, June 27, 2018, Blakey, J.).

Disciplinary actions and EEO claims. The plaintiff was fired in 2011 after 30 years with the VA. The last six years of his employment were fraught with tension, based on multiple disciplinary actions and the employee’s contention that those actions were based on his race and, subsequently, retaliation for his EEO complaints. Mediation did little to alleviate the situation. At one mediation session, the employee and a union representative met with a VA officer who, they attested, told him that his second-level supervisor “was going after him.”

In February 2010 the employee received a notice charging him with a variety of infractions, including inappropriate behavior and failure to complete work, and proposing his removal. The employee filed additional EEO claims, alleging that those instances of discipline were based on illegitimate motivations.

Last chance agreement. The employee’s union representative requested a stay of the removal decision in order to learn the outcome of mediation. They met with the same VA officer, who refused to discuss the employee’s pending EEO complaint or the proposed removal. At a second meeting, held in May, the VA officer continued to refuse to discuss those matters and instead offered the employee a last chance agreement (LCA). If he refused to sign, he would lose his job. If he signed it, the employer agreed to hold his removal in abeyance for ten months, remove certain disciplinary documents from his file, and transfer him to a different facility.

Termination. Most importantly, the agreement required the employee not only to voluntarily dismiss his pending EEO complaints, but also to waive his right to seek relief under federal employment statutes if his employer disciplined him or fired him pursuant to the agreement.

The employee protested the agreement, which the union representative attested was used as “a trap” for employees. According to the union representative, the employer fires most employees on LCAs shortly after they sign them. The employee signed the agreement in order to keep his job. He was transferred to a facility where he alleged that he was watched more closely than other employees. Contending that his performance did not improve and that complaints were made about him at the new facility, the employer fired him in July 2011 for violating the LCA. The employee filed suit alleging violations of Title VII and the employer filed a motion for summary judgment.

Anticipatory retaliation. Only his retaliation claims survived the motion. The employee suffered two materially adverse actions, the court concluded—the LCA and termination. The LCA was materially adverse because of the Title VII claim waiver that it included. In so deciding, the court found persuasive another decision from an Illinois federal district court, EEOC v. Cognis Corp., which involved a similar provision to the one found here. That provision required the employee to “waive all rights he may have,” including those under Title VII, and also expressly waived the employee’s right to file any action with the EEOC and federal and state courts. While it was not uncommon for a settlement agreement to require waiver of existing claims for consideration, the provision in this case “moves far beyond that traditional arrangement by requiring Plaintiff to waive all rights for any future Title VII claims potentially arising out of future discipline or termination,” the court explained.

Title VII’s anti-retaliation provision has the primary purpose of maintaining “unfettered access to statutory remedial mechanisms,” and thus “some kinds of threatened retaliation—including the claim-waiver provision at issue here—must be actionable” under that law, the court said. Indeed, the Seventh Circuit has already acknowledged, albeit in dicta, that such threats constitute an actionable form of “anticipatory retaliation.” Thus, the LCA constituted a materially adverse employment action.

Moreover, there was evidence the employer had him sign the agreement because he had made EEO complaints. The VA officer’s refusal to discuss those complaints could be an indication that he had become frustrated with the employee’s complaints and was looking for a way to make him stop.

Termination “trap.” There was no doubt that termination was a materially adverse action, and there were likewise genuine issues of material fact with regards to whether the employee was fired for engaging in protected activity. Although the employer presented evidence supporting its argument that the employee was fired for poor performance, the employee offered contradictory evidence that he was performing well. There was also testimony that other employees were not fired for similar infractions and evidence that supervisors at the facility to which he transferred were told to “monitor” him. And finally, there was the union representative’s testimony regarding the employer’s use of LCAs as traps to enable it to fire employees.

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