Blog Post

Oct 2, 2018

Having Your Cake and Eating It Too: Sixth Circuit Rules that Employees Need Not Return Severance Pay Before Suing

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Seyfarth Synopsis: In a recent decision, the U.S. Court of Appeals for the Sixth Circuit ruled that former employees need not return severance pay before filing a lawsuit against an employer, when the employee alleges the severance agreement should be rescinded and is bringing discrimination claims under Title VII or the Equal Pay Act. This decision means that notwithstanding the fact that the employee signed a severance agreement and accepted severance pay upon leaving the company, the employee may still be able to sue and keep the severance money—if the employee claims she was coerced into signing the agreement. Given this, it is important for employers to review their severance practices, in order to ensure the process is fair, help protect against claims of coercion, and safeguard the company during the process.

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