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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