Three female attorneys filed suit against the New Jersey State Office of Attorney Ethics (“OAE”), alleging gender discrimination. The plaintiffs claimed that women were assigned to lower-grade positions than their male counterparts. According to the article on Law.com, males without law degrees, some without college degrees, were awarded higher ranked jobs than females with law degrees.
The suit was filed in March 2005 under the Equal Pay Act, Title VII of the Civil Rights Act and its state equivalent, the New Jersey Law Against Discrimination. The case settled in June and each of the three plaintiffs received $5,000 in back pay and a total of $135,000 in emotional-distress damages. This is a relatively small sum, especially given the number of plaintiffs and the involvement of a government defendant.
But what makes this settlement even more interesting are its conditions. The settlement agreement makes an express denial of wrongdoing by the defendants, which is not uncommon. Unlike suits settled with the Equal Employment Opportunity Commission, no remedial measures were required by the agreement, nor were the defendants required to implement any training programs or make any workplace postings.
Most significantly, though, are the provisions whereby the two plaintiffs who had resigned from their jobs during the lawsuit agree to never seek employment with the OAE. Last year, there was a bit of murmuring that the EEOC was going to take a formal position against such “banishment” clauses, also known as “no reapplication” or “no re-employment” provisions.
These provisions are of the highest importance to employers when settling a lawsuit brought by a former employee. If employers were prohibited from including this type of clause in settlement agreements, there would be a greatly decreased incentive to settle at all. Employers would risk the very real possibility that they’d pay a significant sum of money only to be taken “hostage” by an employee determined to inflict permanent suffering on his employer.