In Lester v. O’Rourke, the United States District Court for the North District of Illinois held that Plaintiff is entitled to trial on his Title VII retaliation claim after he signed a Last Chance Agreement (“LCA”) that settled pending Title VII claims and also waived claims that might be asserted if the employer disciplined or terminated him.

Plaintiff, a sixty-year-old African American man who worked for the Department of Veterans Affairs, filed discrimination claims against his employer. After engaging in multiple unsuccessful mediation sessions, Defendant offered Plaintiff a choice between signing the LCA or losing his job.  Plaintiff ultimately signed the LCA.  Shortly after transferring to a new location pursuant to the LCA, Plaintiff was terminated for allegedly violating performance and conduct-related provisions of the LCA.

Plaintiff alleged that Defendant unlawfully retaliated against him in violation of Title VII of the Civil Rights Act. The Court denied Defendant’s motion for dismissal of Plaintiff’s retaliation claim.  Simply stated, a claimant cannot waive future claims (only settle past ones).  Moreover, the Court concluded that the LCA provision barring future claims constituted a materially adverse action because it “would dissuade a reasonable worker from engaging in protected activity.”  Therefore, the Court permitted the Plaintiff to continue pursuit of his Title VII retaliation claim.

Employers must be cautious in entering into an agreement that requires employees to forego claims of future discriminatory conduct. Settlement agreements are enforceable if they are knowingly and voluntarily executed and comply with other legal requirements.  Overly broad agreements, like the one in question, create their own legal exposures.

Alyssa Calabrese contributed to this article.