State of Wisconsin

Labor and Industry Review Commission

David Xu	Fair Employment Decision
Complainant
Epic Systems, Inc.
Respondent	Dated and Mailed:
ERD Case No. CR201301600	October 24, 2017
	xudav_rsd: 164

The decision of the administrative law judge (copy attached) is set aside, and the matter is remanded to the Equal Rights Division for further proceedings in accordance with this decision.  

By the Commission:
	/s/
	Laurie R. McCallum, Chairperson
	/s/
	David B. Falstad, Commissioner

Procedural History

On September 7, 2012, the complainant filed a charge of discrimination with the United States Equal Employment Opportunities Commission (EEOC), in which he alleged that the respondent discriminated against him based upon his race and in retaliation for protected conduct.  The charge was cross-filed with the Wisconsin Equal Rights Division (ERD), pursuant to a worksharing agreement between the agencies.  According to the terms of the worksharing agreement, the initial investigation of the complainant’s charge of discrimination would be handled by the EEOC.  The EEOC administratively closed the case on June 11, 2013.

On August 5, 2014, the ERD sent the complainant a letter asking him whether he wanted the ERD to conduct an independent investigation of his complaint.  The complainant was given 20 days in which to respond, but did not do so.  The ERD thereafter dismissed the complaint based upon the complainant’s failure to respond to its correspondence.  The complainant filed a petition for commission review of the dismissal, and on March 26, 2015 the commission issued a decision remanding the matter to the ERD for an investigation.

Throughout these proceedings the respondent has taken the position that the complainant signed a severance agreement containing a valid waiver and release of all claims arising out of his employment and, therefore, waived his right to file a discrimination complaint with the ERD.  However, the complainant has contended that he did not waive his right to file a discrimination complaint, and that the only thing he waived was his right to seek damages or individual relief that might result from filing a charge.  The complainant has indicated that his objective in pursuing the complaint is to prevent further similar occurrences from taking place.  On June 15, 2015, the ERD issued an order dismissing the complaint because the complainant had signed a valid waiver and release of claims arising out of his employment; the order did not address the complainant’s argument that he had waived only his right to individual relief.  The complainant filed an appeal of the order dismissing his complaint, and the matter was assigned to an administrative law judge.

The administrative law judge assigned to the case treated the complainant’s appeal as a challenge to the validity of the waiver and release that he had signed, and requested information from the complainant addressing the issue of whether the severance agreement was entered into knowingly and voluntarily.  The administrative law judge subsequently determined that, as a prerequisite to resolving that issue, it was necessary for the complainant to return to the respondent the consideration he had received for signing the release.  The complainant did so.  However, the respondent’s attorney waited a month to cash the complainant’s check, at which point the check was returned for insufficient funds.  The respondent moved to dismiss the complaint on that basis, and on December 9, 2016, the administrative law judge issued an order dismissing the complaint based upon the complainant’s failure to tender the consideration to the respondent as required.  The complainant petitioned for commission review of the order dismissing his complaint and, on January 31, 2017, the commission issued a decision remanding the matter to the ERD in order to give the complainant another opportunity to remit the consideration to the respondent.

The complainant returned the consideration to the respondent, as directed, and on April 7, 2017, the administrative law judge issued a decision finding that the complainant executed a knowing and voluntary waiver and release of all claims and dismissed his discrimination complaint accordingly.  The complainant filed a timely petition for commission review of the administrative law judge’s decision.  The matter is now before the commission and ready for a decision.

Memorandum Opinion

On December 23, 2011, the complainant signed a severance agreement prepared by the respondent which provided that, in exchange for continuation of his salary for three weeks (equivalent to approximately $3,634), the complainant’s employment would end on December 23, 2011 and he would agree not to seek work with the respondent again.  In addition, the agreement specified:

I generally and completely release, and promise not to sue, the Company with respect to any and all releasable claims I may have against the Company. . . [T]he released claims include any claim arising out of (1) alleged discrimination of any type, (2) my Epic employment, agreements, compensation or benefits, or the termination of employment, or (3) any federal, state or local law, regulation, ordinance or order concerning the employee relationship, compensation or benefits, or the termination of employment.  Nothing in this release is a waiver of a right to file a charge or complaint with administrative agencies such as the federal EEOC that I cannot be prohibited from or punished for filing as a matter of law, but I waive any right to recover damages or obtain individual relief that might otherwise result from the filing of such charge with regard to any released claim.

The issue presented in this appeal is whether, by signing the severance agreement, the complainant has waived his right to file a complaint with the ERD.  If a waiver is found, a secondary issue to decide is whether the complainant executed that waiver knowingly and voluntarily.

It is well established that the right to file a charge of discrimination under any of the laws enforced by the EEOC may not be waived. See, Enforcement Guidance on non-waivable employee rights under EEOC enforced statutes, EEOC Notice #915.002 (April 10, 1997), citing Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28 (1991)(individual who signs an agreement to submit an employment discrimination claim to arbitration remains free to file a charge with the EEOC), and EEOC v. Cosmair, Inc., 821 F.2d 1085, 1090 (5th Cir. 1987)(a waiver of the right to file a charge is void as against public policy).[1]The conclusion that the right to file a complaint with the EEOC is unwaivable is built on two cornerstones: 1) interference with protected rights is contrary to public policy; and 2) the anti-retaliation provisions of the civil rights statutes prohibit such conduct.[2] Enforcement Guidance, supra.

While it is clear that the severance agreement the complainant signed does not prevent him from filing a charge with the EEOC, a question arises as to what, if any, effect it has on his ability to file an ERD complaint.  As set forth above, the agreement provides that, “Nothing in this release is a waiver of a right to file a charge or complaint with administrative agencies such as the federal EEOC that I cannot be prohibited from or punished for filing as a matter of law.” The commission interprets this language as permitting an ERD complaint to be filed.  The ERD is a state agency comparable to the EEOC, with authority to carry out its statutory duties by investigating a complaint, issuing a determination, and taking any other actions authorized under the statutes.  Similar public policy considerations and anti-retaliation provisions to those that prevent waiver of the right to file a claim with the EEOC also apply under the Wisconsin Fair Employment Act (WFEA), administered by the ERD.  Although the EEOC has the authority to bring claims on behalf of the public and the ERD does not, the Wisconsin Supreme Court has stated that a complainant who files a complaint under the WFEA is acting as a “private attorney general” to enforce the rights of the public and to implement a public policy that the legislature considers to be of major importance.  Watkins v. LIRC, 117 Wis.1d 753, 345 N.W.2d 42 (1984).  The commission has recognized that individuals may bring claims under the WFEA, not simply to receive back pay or other financial remedies, but also to “vindicat[e] the public interest in disclosing and deterring employment discrimination.”  See, Gee v. ASAA Technology, Inc., ERD Case No. 8901783 (LIRC Jan. 15, 1993).  Further, the WFEA, like Title VII and other laws enforced by the EEOC, does not permit retaliation against individuals who file complaints.  See, Wis. Stat. § 111.322(3).  As with the complainant’s rights to file a charge with the EEOC, the complainant cannot be prohibited from or punished for filing a complaint with the ERD.

The commission believes that the language used in the severance agreement-- which was drafted by the respondent with no input from the complainant--was intended to preserve the complainant’s right to file a complaint with the ERD.  This matter is therefore remanded to the ERD for an investigation into the merits of the complaint and for any further proceedings that may be warranted.  In the event that discrimination is found, the complainant will not be eligible for back pay, reinstatement, or any other type of individual relief that might ordinarily be awarded as a result of such finding, having waived his right to such relief.  Finally, because the severance agreement remains in effect, the respondent is required to return to the complainant the consideration that he remitted to it pending a decision by the administrative law judge with respect to whether the agreement was entered into knowingly and voluntarily.

cc:	Attorney Pamela M. Ploor

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[1] See, also, the EEOC Policy statement entitled Understanding Waivers Of Discrimination Claims In Employee Severance Agreements, (July 15, 2009), which includes the following answers to frequently asked questions:

May I still file a charge with the EEOC if I believe that I have been discriminated against based on my age, race, sex, or disability, even if I signed a waiver releasing my employer from all claims?

Yes.  Although your severance agreement may use broad language to describe the claims that you are releasing. . . , you can still file a charge with the EEOC if you believe you were discriminated against during employment or wrongfully terminated.  In addition, no agreement between you and your employer can limit your right to testify, assist, or participate in an investigation, hearing, or proceeding conducted by the EEOC under the ADEA, Title VII, the ADA, or the EPA.  Any provision in a waiver that attempts to waive these rights is invalid and unenforceable.

If I file a charge with the EEOC after signing a waiver, will I have to return my severance pay?

No.  Because provisions in severance agreements that attempt to prevent employees from filing a charge with the EEOC or participating in an EEOC investigation, hearing, or proceeding are unenforceable. . . , you cannot be required to return your severance pay--or other consideration--before filing a charge.

[2] In addition, federal regulations expressly prohibit separation agreements from waiving the employee’s right to file a charge with the EEOC under the ADEA (Age Discrimination in Employment Act).  See, 29 C.F.R. § 1625.22(i)(2)(i).