Court Considers Boundaries of Separation Agreements

by Sarah Green

A case considered to carry ramifications regarding what employers can put in nondisparagement agreements came down to a question of whether the agreement itself is relevant to a dispute between the Equal Employment Opportunity Commission and a private college in Denver.
The 10th Circuit Court of Appeals on Tuesday heard oral arguments in EEOC v. CollegeAmerica Denver. The case was brought to the 10th Circuit after CollegeAmerica won dismissal of two of three claims brought against it by the EEOC in 2013. A third claim is still being litigated. The initial claims were brought against CollegeAmerica as part of EEOC’s efforts to increase restrictions on terms employers may include in separation agreements.
The case was filed initially after a CollegeAmerica director, Debbi Potts, resigned in 2012 and signed a nondisparagement agreement that prohibited her from filing any grievance or complaint against the school. As part of that agreement, Potts must “direct any complaints or issues against CollegeAmerica … that may arise with disgruntled staff, students, or the public at large to CollegeAmerica’s toll free complaint number.” In return for signing the separation agreement, Potts was given $7,000.
In January 2013, though, Potts filed three discrimination claims with the EEOC against the private college, including a claim that she was given a less desirable severance package than younger employees.

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