In a recent decision (Xu v. Epic Systems, Inc.), the Wisconsin Labor and Industry Review Commission has held that an employee’s discrimination claims under the Wisconsin Fair Employment Act (WFEA) are not waivable. Specifically, the Commission found:
- Wisconsin employees cannot waive the right to file a discrimination complaint against his employer under the WFEA, and
- An employee may prosecute WFEA claims against his former employer – even if he previously waived and released those claims in a valid severance agreement.
In this case, a former employee had entered into a severance agreement with his former employer where, among other things, the employee agreed to waive any claims under the WFEA in exchange for a severance payment.
The severance agreement also contained a standard provision intended to comply with federal law which prohibits the waiver of the right to file a charge or complaint with certain federal agencies (e.g., the U.S. Equal Employment Opportunity Commission (EEOC), the Securities and Exchange Commission, the Occupational Safety and Health Administration, the National Labor Relations Board), which stated the following:
Nothing in this release is a waiver of a right to file a charge or complaint with administrative agencies such as the federal EEOC that I cannot be prohibited from or punished for filing as a matter of law, but I waive any right to recover damages or obtain individual relief that might otherwise result from the filing of such charge with regard to any released claim.
After signing the agreement, the former employee filed a complaint with the EEOC for race discrimination. While the EEOC charge was dismissed, the former employee’s charges were cross-filed with the Wisconsin Equal Rights Division, where the employee claimed that the employer’s conduct also violated the WFEA. Due to the severance agreement, the Division dismissed the claim and the employee appealed the dismissal to the Commission.
The Commission found even though the former employee had waived his right to recover any damages for violations of the WFEA, due to the standard clause (quoted above), he had not waived his right to file a charge with the Division. Moreover, the Commission also concluded that employees cannot be precluded from filing a complaint with the Division.