Maryland Federal Court Rules that Requiring an Individual to Dismiss a Pending EEOC Charge in Exchange for Severance Payments Constitutes Unlawful Retaliation

A federal district court in Maryland held last month that an employer engaged in unlawful retaliation toward an employee in violation of Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act by conditioning the receipt of severance benefits upon the employee’s withdrawal of her pending Equal Employment Opportunity Commission (EEOC) charge. EEOC v. Lockheed Martin Corp., D. Md., No. 05cv0287 RWT, August 9, 2006. The court also decided that the severance agreement and release was retaliatory on its face because it required the employee to waive the right to file an EEOC charge in order to receive an employment benefit (i.e., severance). In light of this important decision, employers should carefully examine their severance, separation, and settlement agreements and releases, in addition to policies and plans governing the payment of severance benefits, to determine whether they contain language that may be found to be retaliatory.