Are you tempted to settle a nuisance lawsuit? Whether doing so at the initial EEOC stage or later during litigation, be sure to include a “no rehire” clause in the settlement agreement. Otherwise, the employee may later apply for an open job—and then sue for retaliation if she’s not hired.
Recent case: Kara worked for Barclays Capital. She filed an EEOC complaint alleging a long list of disability-related claims. The EEOC helped facilitate a settlement that gave Kara $75,000 in exchange for giving up her claims.
The settlement agreement she signed included a “no rehire” clause with which she promised not to apply for any jobs at Barclays in the future. It explicitly stated she would not be rehired.
Kara then demanded a job after taking the money—and she sued again. This time, she alleged retaliation, and also asserted that she was not of sound mind when she signed the first settlement. She claimed that because she took narcotic cough syrup and anti-anxiety medication at the time, she didn’t know what she was doing.
The court would have none of it. It quickly dismissed Kara’s lawsuit, based on the earlier settlement and her promise not to apply again. (Hewett v. Barclays Capital, et al., No. 12-CV-1713, SD NY, 2012)
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Barclays Capital made a material misrepresentation in the EEOC settlement negotiations. The blog http://primaryimmune.blogspot.com/ explains the misrepresentations by Barclays Capital. During the EEOC mediation session, the employee entered into a neutral settlement agreement with the EEOC that included no retaliation or discrimination based on the Americans with Disabilities Act. In the mediation session Barclays attorney, Barclays Human Resources, the mediator and I agreed to no discrimination or retaliation verbally, and we all three; Barclays attorney, Barclays Human Resources representation and I; signed a contractual agreement with no retaliation or discrimination based on the Americans with Disabilities Act.
Barclays negotiated in bad faith because they intended no rehire but signed an agreement stating no discrimination or retaliation based on the Americans with Disabilities Act. A disabled employee should have an attorney review contracts before execution because attorneys will have seen many employment severance agreements, and the employer could put anything however discriminatory into the second contract.
The New York EEOC confirmed that the EEOC settlement agreement is neutral with no retaliation or discrimination based on the Americans with Disabilities Act.