Equal Employment Opportunity Commission v. CVS Pharmacy, Inc., 809 F.3d 335

Background

CVS fired store manager Tonia Ramos in July 2011 and offered a standard severance (separation) agreement that released potential claims (including Title VII) but expressly carved out the right to participate in government discrimination proceedings; agreement provided 21 days to consider and a 7‑day revocation period.
Ramos signed the agreement and, about one month later, filed a racial/sex discrimination charge with the EEOC; CVS provided the EEOC with the severance agreement during the investigation.
In June 2013 an EEOC regional attorney issued a reasonable‑cause letter alleging CVS engaged in a “pattern or practice of resistance” to Title VII rights by conditioning severance on overly broad releases that deter charge‑filing; the EEOC demanded injunctive relief in a proposed consent decree and then dismissed Ramos’s charge.
CVS demanded the EEOC follow Section 706 pre‑suit procedures (conciliation) and stated it was revising release language; the EEOC refused and later filed suit under Section 707(a) alleging a pattern or practice of resistance without alleging discrimination or retaliation.
The district court granted summary judgment for CVS, concluding the EEOC was required to conciliate before suing and expressing skepticism that the severance agreement, which carved out agency participation, could reasonably be construed to deter EEOC charges.
On appeal the EEOC argued Section 707(a) allows suit without conciliation and that offering severance agreements that could chill claims constitutes a pattern or practice of resistance; CVS argued the EEOC must conciliate and that Section 707 claims must allege discrimination/retaliation.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether EEOC may bring a §707(a) “pattern or practice of resistance” suit without following §706 pre‑suit conciliation procedures	EEOC: §707(a) authority permits suits for “resistance” without §706 conciliation; the 1972 transfer of AG authority freed EEOC from §706 prerequisites	CVS: §707(e) requires actions under §707 to be conducted in accordance with §706, so conciliation is required	Held: EEOC must follow §706 procedures (including conciliation) when pursuing §707 actions; §707(e) requires compliance with §706.
Whether a §707 claim may be pursued absent any allegation of discrimination or retaliation	EEOC: §707(a) covers resistance to Title VII rights broadly, so practices that chill enforcement can be challenged even without alleging discrimination/retaliation	CVS: §707 addresses resistance to rights secured by Title VII (i.e., freedom from discrimination/retaliation); §707 suits must relate to discriminatory or retaliatory practices	Held: §707 suits must challenge practices that threaten Title VII rights (discrimination or retaliation); EEOC’s complaint failed to allege discrimination/retaliation and thus did not state a claim.
Whether CVS’s severance agreement reasonably deterred employees from filing EEOC charges or participating in investigations	EEOC: Agreement’s length, small font, and legalese could chill signatories and a jury could find deterrence	CVS: Agreement carved out agency participation and advised consultation with counsel; no evidence anyone was misled (Ramos filed a charge after signing)	Held: Agreement’s express carve‑outs and advice to seek counsel make it unreasonable to construe it as restricting EEOC participation; EEOC failed to show deterrence.
Whether conditioning severance on releases, without more, constitutes actionable retaliation under Title VII	EEOC argued the practice deters enforcement rights and thus is actionable	CVS: Circuit precedent holds conditioning benefits on releases alone is not per se retaliation actionable under Title VII	Held: Conditioning benefits on releases, by itself, does not constitute actionable retaliation; prior circuit authority supports this view.

Key Cases Cited

General Telephone Co. of the Northwest, Inc. v. EEOC, 446 U.S. 318 (Sup. Ct.) (discusses transfer of AG pattern‑or‑practice authority to EEOC and legislative history)
Mach Mining, LLC v. EEOC, 135 S. Ct. 1645 (Sup. Ct.) (conciliation is a key component of Title VII’s enforcement scheme)
Occidental Life Ins. Co. v. EEOC, 432 U.S. 355 (Sup. Ct.) (EEOC must discharge administrative duties before commencing civil action)
Alexander v. Gardner‑Denver Co., 415 U.S. 36 (Sup. Ct.) (individual Title VII claims may be released; overview of EEOC’s administrative role)
EEOC v. Allstate Ins. Co., 778 F.3d 444 (3d Cir.) (employers can require releases; conditioning benefits on releases not necessarily actionable retaliation)
Isbell v. All‑state Ins. Co., 418 F.3d 788 (7th Cir.) (conditioning continued employment on signing releases does not, by itself, constitute unlawful retaliation)
EEOC v. SunDance Rehab. Corp., 466 F.3d 490 (6th Cir.) (severance conditioned on promise not to file EEOC charge is not per se Title VII retaliation)
Parisi v. Goldman Sachs & Co., 710 F.3d 483 (2d Cir.) (pattern‑or‑practice is a method of proving discrimination, not a freestanding cause of action)
Serrano v. Cintas Corp., 699 F.3d 884 (6th Cir.) (§707 claims limited to pattern or practice of discrimination)
EEOC v. Univ. of Pa., 493 U.S. 182 (Sup. Ct.) (EEOC’s enforcement responsibilities are triggered by a specific sworn charge)
EEOC v. Shell Oil Co., 466 U.S. 54 (Sup. Ct.) (Title VII establishes an integrated multistep enforcement procedure)
Duncan v. Walker, 533 U.S. 167 (Sup. Ct.) (statutory interpretation principle: give effect to every clause and word)
EEOC v. Liberty Trucking Co., 695 F.2d 1038 (7th Cir.) (describing conciliation as EEOC’s most important function)
Burnell v. Gates Rubber Co., 647 F.3d 704 (7th Cir.) (standard of review for summary judgment)
EEOC v. Harvey L. Walner & Assocs., 91 F.3d 963 (7th Cir.) (earlier dicta about EEOC’s §707 authority clarified not to permit bypassing §706 charge requirement)