Thursday, June 2, 2016

Dealing Effectively with Agencies, Part 3: Releases


Employment law enforcement agencies are involved in a significant number of employer-employee disputes.  It helps for HR professionals, as well as in-house and outside counsel, to understand agency processes and priorities, as we have discussed here and here in previous posts.

Settlement of charges through internal programs of conciliation or early resolution is a priority for many enforcement agencies, and may offer employers a quick and relatively inexpensive means of resolving a dispute. Complaining employees may also benefit from this relatively fast and simple method of settlement.  Enforcement agencies like early resolution of charges because resolved charges don’t need to be investigated or litigated. Agencies often actively encourage both parties to participate in an agency-run mediation or conciliation conference, and agency employees, including investigators, sometimes serve as facilitators of settlement discussions.

Employers usually settle claims because doing so offers closure and confidentiality. Employees usually settle claims to get compensation quickly. In deciding whether or not to participate in an agency-run resolution process, it’s important to keep in mind that the agency may have priorities that are quite different from those of the parties. 

Agencies don’t care about full releases.  An employer’s most basic goal when settling a charge is getting a release.  The employer wants to know that the matter is closed and the employee will not be able to bring more claims.  Private negotiated settlements generally include full releases which waive the employee’s right to pursue any dischargeable claim against the employer. Agency-facilitated settlements, and agency-drafted settlement agreements, on the other hand, usually involve only a release of the legal claims that the agency is empowered to enforce. In our experience, agencies’ reactions to a request to include a full release in the settlement agreement range from neutral to negative.  Some agencies will not be a party to an agreement containing a general, or full, release.  An employer should determine whether or not a full release is possible before negotiating an agency-facilitated settlement. If a full release isn’t possible, the employer must weigh the value of a very limited release against the cost of obtaining the settlement. 

Two-party agreements don’t always solve the problem.  Faced with an agency policy that doesn’t allow a full release in an agency-facilitated settlement agreement, an employer should consider proposing a two-party agreement with the employee.  This can take the form of either 1) a private agreement with the complaining employee that contains a full release and calls for the employee to withdraw or seek dismissal of the agency charge, or 2) a supplementary agreement, in addition to the agency-facilitated settlement agreement, in which the employee provides a general release.  (This second approach will, of course, require additional consideration in exchange for the general release.)  Either a private agreement and withdrawal or a supplementary agreement can work, but neither is fool-proof.  The agency can refuse to allow withdrawal or dismissal of the charge if it is unhappy with the terms of settlement, and may choose to pursue it even if the employee doesn’t want to. 

Agencies don’t want confidentiality.  Even if both parties to the settlement of an agency charge agree to keep the resolution confidential, the agency may not be willing to do so. Enforcement agencies are judged on their results.  They want to be able to report that they facilitated the settlement of lots of charges, and they want to be able to report the settlement amounts involved.  Agencies also believe that the publication of accounts of cases and settlement terms will serve as a deterrent to unlawful employment practices.  Employers should never assume that an agency-facilitated settlement will be confidential, and should determine the agency’s policies on confidentiality before negotiating an agency-facilitated settlement. 

Agency personnel have limited training and knowledge about settlement.  Agency employees who act as mediators, conciliators, or facilitators of settlement are not necessarily trained in alternative dispute resolution techniques.  They may have only limited knowledge of the legal process, and may know very little about employment laws other than the laws their agency is charged with enforcing.  Participants in an agency-facilitated resolution should have modest expectations about the effectiveness of agency personnel. 

Posted by Judy Langevin