The Commission argued in its opening brief that the Program’s conversion option is retaliatory on its face because it required the employee agents to release all their claims against Allstate in order to continue their careers with the company. The EEOC acknowledged that when an employer terminates employees, the employer may lawfully offer enhanced severance benefits conditioned on the employees’ signing a general release of their claims against the company. In the Commission’s view, however, the district court erred when it extended that rule to the conversion option, under which the bulk of the employee agents continued their careers selling Allstate financial products without interruption. Allstate terminated them as employees, but did not want to sever its business relationship with them and did not do so.

To continue their careers, the agents who converted had to release all their claims. The Commission argued that an employer may not lawfully require its employees to release all their claims against the company in order to continue working for the company. If that were lawful, employers could do it periodically and thereby effectively immunize themselves from the anti-discrimination statutes.

Finally, the Commission maintained that even if the conversion option was lawful with respect to the employee agents who converted, Allstate retaliated against the “hold-outs,” those few employee agents who refused to sign the release. In light of the “severe economic consequences” that Allstate acknowledged the employee agents faced, and in particular in light of the significant difference between the base severance benefits (option 4) and the enhanced severance benefits (option 3), Allstate knew that the only rational reason for refusing to sign the release was the hold-outs’ desire to preserve their rights to sue to challenge the lawfulness of the Program. Because the hold-outs preserved their right to sue, Allstate denied them the opportunity to continue their careers with the company, and that causal connection was dictated by the Program itself.

1. Allstate in effect argues that there is no such thing as an employment policy that is retaliatory on its face. The company contends that EEOC v. Board of Governors, 957 F.2d 424 (7th Cir. 1992), is not a retaliatory-policy case, and that there is no violation of the anti-retaliation provisions unless an employee has engaged in protected activity and that activity caused the employer to take an adverse action. Allstate Br. at 24–29, 31; see also EEAC Br. at 9 (“A violation of federal anti-retaliation laws cannot exist without an adverse employment action being taken because of opposition to an underlying legal violation.”) (capitalization altered). This Court should reject that argument.

It is well settled that employment policies can violate the anti-discrimination statutes on their face. In International Union, United Automobile Workers v. Johnson Controls, Inc., 499 U.S. 187, 197, 200, 206 (1991), for example, the Supreme Court held that the employer’s fetal-protection policy discriminated on its face on the basis of sex. In Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 121 (1985), the Court held that the airline’s policy governing transfers among cockpit positions discriminated on its face on the basis of age. See also EEOC v. Baltimore Cnty., 747 F.3d 267, 274–75 (4th Cir. 2014) (holding that the challenged provision of the county’s pension plan discriminated on its face on the basis of age because it treated employees who were older when hired less favorably, because of their age, than employees who were younger when hired); Healey v. Southwood Psychiatric Hosp., 78 F.3d 128, 131 (3d Cir. 1996) (holding that hospital’s sex-based staffing practices were “facially discriminatory”).

It is equally true that employment policies can violate the anti-retaliation provisions on their face. In Board of Governors, 957 F.2d at 431, the court held that the challenged provision in the collective bargaining agreement violated the ADEA’s anti-retaliation provision on its face because it authorized the employer to take an adverse action if an employee filed a charge with the Commission.[1] In EEOC v. Cognis Corp., No. 10-2182, 2011 WL 6149819, *9 (C.D. Ill. Dec. 12, 2011), the court held that the employer’s practice of conditioning continued employment on an employee’s agreement to forego his rights to file charges or sue alleging discrimination was retaliatory on its face. If an employer were to adopt a policy that any employee who files a charge or sues alleging discrimination will be immediately terminated, that policy would be retaliatory on its face, because it provides that protected activity will automatically result in an adverse action. The EEOC could sue the employer challenging that policy and would not have to wait until an employee—presumably one who does not mind losing his job—files a charge or sues and is terminated pursuant to the policy. As the court stated in Massachusetts v. Bull HN Info. Sys., Inc., 16 F. Supp. 2d 90, 106 (D. Mass. 1998):

If . . . threats of retaliation are not actionable . . . , then a . . . government enforcement body would have to wait until an employer actually retaliates before invoking the protections of [the ADEA’s anti-retaliation provision]. Where the threatened retaliation is clearly illegal, where it chills the redress of legal rights, however, such a conclusion can only be described as absurd.

Allstate and the Equal Employment Advisory Council maintain that the Commission cannot sue until an employee engages in protected activity and the employer acts in accord with the policy. Allstate Br. at 28–29; EEAC Br. at 9–20. If that were true, the more draconian and effective the retaliatory policy is, the less subject it would be to challenge. This would be, as the Bull HN court stated, an absurd result, and “interpretations of a statute which would produce absurd results are to be avoided if alternative interpretations consistent with the legislative purpose are available.” Griffin v. Ocean Contractors, Inc., 458 U.S. 564, 575 (1982). This Court can interpret the anti-retaliation provisions to prohibit openly retaliatory policies and should therefore reject Allstate’s contention that openly retaliatory policies are lawful.

2. Allstate argues that Board of Governors was really about whether Professor Lewis, the charging party, was a victim of retaliation, and the passages in the decision referring to the challenged policy were therefore dicta. Allstate Br. at 31. Judge Cummings, who wrote the decision, would be surprised. The first sentence of the decision states: “The [EEOC] brought this action to challenge the legality of a collective bargaining agreement provision . . . .” 957 F.2d at 425. The last sentence concludes: “Consequently, we fully agree . . . that [the challenged CBA provision] violates Section 4(d) with respect to ADEA claimants because it is discriminatory on its face.” Id. at 431. The decision refers to Professor Lewis in one paragraph and one footnote, id. at 426–27 & n.2, while the words “policy” and “provision” occur frequently throughout the decision, and the decision repeatedly refers to the case as a “retaliatory policy case.” Id. at 427 (“Nothing in Section 4(d) requires a showing of intent in retaliatory policy cases.”), 429 (“In a retaliatory policy case an employer’s alleged good faith is irrelevant . . . .”), 429 (“Having concluded that a retaliatory policy constitutes a per se violation of Section 4(d), we now examine whether Article 17.2 of the collective bargaining agreement is a retaliatory policy with respect to ADEA claimants.”). See also id. at 431 (“In sum, Section 4(d) prohibits policies that penalize employees who exercise their statutory rights under the ADEA. . . . Article 17.2 violates Section 4(d) . . . because it is discriminatory on its face.”).

3. Allstate’s next argument is that even if a policy can in theory be retaliatory per se, the policy the EEOC challenges here—barring the employee agents from continuing their careers as Allstate agents unless they release all their claims—is not retaliatory per se for two reasons. First, it is well settled that an employer may lawfully offer a terminated employee enhanced severance benefits in exchange for a release of claims. Allstate Br. at 33–37. Second, the adverse action the Commission challenges here was triggered by an employee agent’s refusal to sign the release, and refusing to sign a release is not a protected activity. Allstate Br. at 46–51.

(a) The Commission addressed the first of these arguments in its opening brief at pages 21–31. The EEOC is not challenging the well-settled rule that an employer may lawfully offer a terminated employee enhanced severance benefits in exchange for a release of claims. The Commission merely maintains that the district court erred in expanding that rule so that it applies not only to the termination and severance-benefits context in which it arose, but also to what an employer is allowed to do to its employees while they are still employed: i.e., to employees who will continue working for that employer. Neither Allstate nor the EEAC has cited a single court decision—with the possible exception of Isbell v. Allstate Insurance Co., 418 F.3d 788 (7th Cir. 2005), which Allstate has misread (see infra at pages 11–13)—holding that an employer may lawfully condition continued employment on its employees’ releasing all their claims. For the reasons stated in the EEOC’s opening brief at pages 21–31, this Court should not take that step either.

(b) Allstate’s second argument is that refusing to sign a release is not normally considered protected activity under the anti-retaliation provisions, and therefore no protected activity is implicated by the challenged policy. Allstate Br. at 46–51. To assess this argument properly, this Court should consider the challenged policy in light of the substantial role that employees play in enforcing the anti-discrimination statutes.

The EEOC has a significant role in enforcing the anti-discrimination statutes, but that role is limited by the agency’s size and budget. The vast majority of lawsuits alleging employment discrimination or retaliation are brought by individual victims.[2] When these victims prevail, they are usually entitled to monetary relief. From the plaintiffs’ viewpoint, this monetary relief is designed to make them whole. Albemarle Paper Co. v. Moody, 422 U.S. 405, 419–21 (1975). Viewed from the institutional perspective of how the anti-discrimination statutes are enforced, however, the monetary relief is the principal incentive Congress provided to motivate victims to bring lawsuits to enforce the statutes.

Congress intended that the anti-discrimination statutes be enforced and relied heavily on victims for that enforcement. Alexander v. Gardner-Denver Co., 415 U.S. 36, 45 (1974) (even after Congress authorized the EEOC to sue, “the private right of action remains an essential means of obtaining judicial enforcement of Title VII”); City of Riverside v. Rivera, 477 U.S. 561, 575 (1986) (“[A] plaintiff who obtains relief in a civil rights lawsuit does so not for himself alone but also as a private attorney general, vindicating a policy that Congress considered of the highest importance.”) (punctuation omitted). Without the prospect of monetary relief, victims will not bring such lawsuits, and the statutes, pro tanto, will not be enforced. See Veprinsky v. Fluor Daniel, Inc., 87 F.3d 881, 889 (7th Cir. 1996) (“Given the instrumental role individual employees play in the statutory scheme, the protection of those individuals from retaliatory acts by the employer ‘is essential to accomplish the purpose of Title VII.’”).

The anti-retaliation provisions bar an employer from discriminating against an employee because she sued it alleging discrimination.^{^[3]} Allstate’s program violated this statutory prohibition by requiring employee agents who wanted to continue their careers with the company to sign a release that removed the principal incentive Congress provided to motivate such lawsuits. A decision allowing employers to require their employees to sign releases in order to keep working would therefore not only prevent individual victims from obtaining make-whole relief, but it would also hinder the overall enforcement of the statute. See Flannery v. Recording Indus. Ass’n, 354 F.3d 632, 642 (7th Cir. 2004) (“The very purpose of the retaliation provisions is to prevent employers from deterring employees from exercising their rights . . . .”).

4. Allstate maintains that the Seventh Circuit has already rejected a claim identical to the Commission’s in Isbell v. Allstate Insurance Co., 418 F.3d 788 (7th Cir. 2005). Allstate Br. at 36. The EEOC addressed Isbell in its opening brief. The Commission acknowledged that the court described Isbell’s retaliation claim as similar to the EEOC’s, with the adverse action being Allstate’s preventing her from continuing her career as an agent for the company. The Commission contended, however, that Isbell did not resolve that claim, because its rationale for rejecting her claim focused not on Allstate’s barring her conversion, but on her termination. EEOC Br. at 25–27. Allstate responds that in this case “termination and refusal to allow conversion are simply two different ways of describing the same act.” Allstate Br. at 37. But termination and refusal to allow conversion were clearly different employment actions in this case: all employee agents were terminated, but only some of them were barred from continuing their careers.

Because termination and barring conversion were not the same, the Isbell court did not resolve the retaliation claim it said Isbell raised. The Isbell court gave the following reason for rejecting her retaliation claim: “Isbell did not lose her job because she refused to sign the Release. She lost her job . . . because Allstate had decided to eliminate all employee agent positions with the Company.” Isbell, 418 F.3d at 793. But the adverse action Isbell was challenging, and the action the court never addressed, was not her termination but Allstate’s refusal to allow her to convert. Had the court addressed the refusal to allow her to convert, that passage would read: “Isbell was not barred from converting because she refused to sign the Release. She was barred from converting because Allstate had decided to bar all employee agents from converting.” Neither statement would be true because she was barred from converting because she refused to sign the release, and Allstate did not bar all agents from converting. Accordingly, the Isbell court did not reject the claim that the Commission raises here.

5. Allstate relies on EEOC v. SunDance Rehabilitation Corp., 466 F.3d 490 (6th Cir. 2006), and EEOC v. Nucletron Corp., 563 F. Supp. 2d 592 (D. Md. 2008), for the proposition that when an employer offers a terminated employee a severance agreement, the mere offer of that agreement is not unlawful even if the agreement includes an unenforceable prohibition on filing charges with the EEOC. Allstate Br. at 29–30. The Commission is not arguing here that Allstate’s mere offer of enhanced severance benefits in exchange for a release was unlawful. Indeed, the agency has acknowledged that the Program’s enhanced-severance-benefits and book-sale options are lawful. JA-1-32 (district court decision); EEOC Br. at 34–35. The offer of the conversion option was unlawful because the related Program provisions dictated that the employee agents had to release their claims if they wanted to continue their careers as Allstate agents. Neither SunDance nor Nucletron held that conditioning continued employment on signing a release is lawful.

EEOC v. Cognis Corp., No. 10-2182, 2011 WL 6149819 (C.D. Ill. Dec. 12, 2011), is closer to the facts here than SunDance or Nucletron. In Cognis, the employer required certain employees to forego their rights to file charges or sue if they wanted to maintain their jobs. The court found this practice retaliatory on its face. Id. at *9.

The Equal Employment Advisory Council maintains in its amicus brief that it is lawful for an employer to offer terminated employees enhanced severance benefits in exchange for signing a general release, and that eliminating that rule would have dire consequences for employers and employees alike. EEAC Br. at 9–26. The Commission is not asking this Court to change this general rule, and it has acknowledged that the enhanced-severance-benefits and book-sale options were lawful. JA-1-32 (district court decision); EEOC Br. at 34–35. As noted supra, the EEOC contends only that the rule should be confined to the termination and severance context in which it arose, and it should not be broadened to allow employers to condition continued employment on their employees’ releasing their claims.

6. A number of Allstate’s arguments are based on bald assertions unsupported by any authority. For example, Allstate maintains that the Commission’s policy claim is improper because the EEOC challenges only some aspects of the Program as unlawful rather than the entire Program. Allstate Br. at 25 (noting EEOC’s concession that the enhanced-severance-benefits and book-sale options were lawful). Allstate cites no authority holding that challenges to a complex program must show that each provision of the program is unlawful, and the Commission knows of none. To the contrary, a number of courts have found specific provisions of larger programs unlawful without finding all of those programs’ provisions unlawful. In Los Angeles Department of Water & Power v. Manhart, 435 U.S. 702 (1978), for example, the Supreme Court did not require the plaintiff class to show that every provision in the defendant’s pension plan was unlawful and did not invalidate the entire plan. Rather, it struck only the provision requiring female employees to make larger contributions to the plan than male employees to obtain the same benefits. Id. at 707–11. Similarly, in Thurston the Court let the bulk of the airline’s transfer policy stand and struck only the provision barring transfers by captains and flight officers who needed transfers because of their age. 469 U.S. at 120–21, 124–25. See also Baltimore County, 747 F.3d at 274–75 (ruling unlawful only the provision of the county’s pension plan that required employees who were older when hired to contribute a larger percentage of their salaries to the plan than it required employees who were younger when hired to contribute). Therefore, Allstate’s argument based on the Commission’s challenging only one provision of the Program should be rejected.

Similarly, Allstate contends that the rule allowing employers to offer terminated employees enhanced severance benefits in exchange for a release applies during employment as well as at termination because there is “nothing legally unique about the ‘severance’ context.” Allstate Br. at 25. But termination obviously alters the legal relationship between an employer and an employee. The employer can stop paying wages to terminated employees, for instance.

All the decisions Allstate and its amicus have cited supporting the enhanced-severance-benefits rule have addressed termination scenarios. See, e.g., DiBiase v. SmithKline Beecham Corp., 48 F.3d 719, 722 (3d Cir. 1995) (challenged severance plan applied to employees terminated in a RIF); SunDance Rehabilitation, 466 F.3d at 492–93 (challenged release was offered when the charging party was terminated in a RIF). None has held it is lawful for an employer to require its employees to sign a release in order to continue working for the company.

This is true even of the two unpublished decisions Allstate relies on as ruling that it is lawful to offer a new employment position in exchange for a release of claims. Allstate Br. at 34. In both Graves v. Fleetguard, Inc., No. 98-5893, 1999 WL 993963 (6th Cir. Oct. 21, 1999), and Quattrone v. Erie 2 Chautauqua-Cattaraugus Board of Co-operative Educational Services, No. 08-367, 2011 WL 4899991 (W.D.N.Y. Oct. 13, 2011), the plaintiff was terminated and responded by filing a charge (Graves, at *1–2) or threatening litigation (Quattrone, at *3). In each case, the employer then offered the plaintiff a new employment position (i.e., one the plaintiff had not previously held, and one to which the plaintiff was not entitled) conditioned on the plaintiff’s agreement to withdraw the charge (Graves) or refrain from suing (Quattrone). Neither court addressed a situation like this one, where the employer fired all of the employees who were performing a certain function, but wanted the bulk of them to continue performing that function and required them to sign a general release in order to do so.

Allstate maintains that Graves applies here because there is no meaningful distinction between conditioning continued employment on releasing claims and settling a pending EEOC charge. Allstate Br. at 35. Allstate ignores the distinction between cases challenging individual employment actions and cases challenging employment policies. In Graves, an individual employee filed a charge, and his employer offered him a new employment opportunity, one to which he was not otherwise entitled, if he agreed to withdraw his charge. 1999 WL 993963 at *5. The issue in Graves was thus whether conditioning the job offer on Graves’ withdrawing his charge was a lawful attempt to settle a pending charge. Here, in contrast, the Commission is challenging a program that Allstate imposed uniformly on all of its 6200 employee agents. Under the Program all of the employee agents had the option of converting to exclusive agents if they signed the release. The issue is not how Allstate tried to settle one employee’s pending charge, but whether it lawfully required its employee agents to release their claims in order to continue their careers as Allstate agents. The Graves ruling accordingly does not apply.

Allstate also maintains that the Commission’s claim fails because the agency has acknowledged that the enhanced-severance-benefits and book-sale options are lawful, and offering the employee agents a third option only benefitted them by giving them an additional choice. Allstate Br. at 38. But the issue is not whether the conversion option gave the employee agents an additional choice; the issue is whether that option, conditioning the agents’ continued careers on signing the release, was lawful. Again, Allstate has cited no authority holding that where an employer offers its employees three options and two of them are lawful, the third option is necessarily also lawful. Indeed, the Supreme Court has held to the contrary. The pension plan challenged in Arizona Governing Committee v. Norris, 463 U.S. 1073 (1983), allowed the employees to choose among three types of retirement benefits: a lump sum on retirement, fixed payments for a fixed period, or fixed monthly annuity payments for the remainder of the employee’s life. Id. at 1076. Only the third option discriminated against female employees on the basis of their sex, but the fact that the first two options were lawful did not render the third option lawful: “An employer that offers one fringe benefit on a discriminatory basis cannot escape liability because he also offers other benefits on a nondiscriminatory basis.” Id. at 1082 n.10.

In addition, Allstate repeatedly points out that the company was taking a business risk because it did not know whether enough employee agents would choose the conversion option to fill the company’s need for exclusive agents. Allstate Br. at 43, 53. Allstate cites no authority holding that taking a business risk immunizes an employer from liability under the anti-discrimination statutes, and the proposition is counter-intuitive. An employer that decides not to hire any blacks or Hispanics is taking a business risk that it will not be able to fill all its vacancies with qualified employees, but the fact that the employer is taking a business risk hardly renders its unwritten policy lawful.

7. Allstate maintains that it did not retaliate against the few employee agents who refused to sign the release, because refusing to sign a release is not protected opposition activity; refusing to sign a release, the company claims, does not precisely identify the discrimination opposed. Allstate Br. at 46–51. Such precision is not required, however, when the employer reasonably could understand that refusing to sign a release signified an intention to challenge an allegedly unlawful action. Cf. Crawford v. Metro. Gov’t of Nashville, 555 U.S. 271, 276 (2009) (the term “oppose” in § 704(a) has its ordinary, broad meaning, and courts should not narrow the section’s broad coverage by recognizing only some forms of opposition). The Commission contends that in the circumstances of this case the holdouts engaged in protected activity when they refused to sign the release.

Unlike in most cases where terminated employees challenge the releases their employers offered, Allstate did not terminate some employees and retain others. When one employee is terminated and others are retained, the employee challenging his termination has to address the employer’s reasons for selecting him for termination. Here Allstate announced a program providing that all 6200 of its employee agents would be terminated. There is no dispute that the Program is the reason all the employee agents were terminated. On these facts a reasonable employer would know what action or program the holdouts were considering challenging.

Allstate also maintains that barring conversion was not an adverse action because the terminated employee agents were not entitled to automatic conversion in the first place. Allstate Br. at 52–53. But the Program offered automatic conversion to all the employee agents, and once Allstate offered automatic conversion to all its employee agents, the company could not lawfully withhold conversion from some agents on a retaliatory basis, as Allstate did here. See Hishon v. King & Spalding, 467 U.S. 69, 75 (1984) (“A benefit that is part and parcel of the employment relationship may not be doled out in a discriminatory fashion, even if the employer would be free under the employment contract simply not to provide the benefit at all.”).

Conclusion

For these reasons and those explained in its opening brief, the Commission urges this Court to hold that it was unlawful for Allstate to bar its employee agents from continuing their careers as Allstate agents unless they released all their claims, or that, at a minimum, it was unlawful for Allstate to retaliate against the agents who refused to sign the release by barring them from continuing their careers as Allstate agents.

[1] Allstate argues that Board of Governors was not a retaliatory-policy case. Allstate Br. at 31. The Commission responds to this argument infra at pages 6–7.

[2] The average number of lawsuits alleging employment discrimination filed per year from 2008 through 2013 was 14,412. See Administrative Office of the U.S. Courts, Judicial Business, 2013, available at http://www.uscourts.gov/Statistics/JudicialBusiness/2013/statistical-tables-us-district-courts-civil.aspx, Table C-2A. The average number of lawsuits filed per year by the EEOC during that period was 238. See EEOC, EEOC Litigation Statistics, FY 1997 through FY 2013, available at http://www.eeoc.gov/eeoc/statistics/enforcement/litigation.cfm. Thus the Commission filed fewer than two percent of the employment-discrimination cases filed.

[3] The anti-retaliation provision in the Age Discrimination in Employment Act, 29 U.S.C. § 623(d), states in relevant part as follows:

It shall be unlawful for an employer to discriminate against any of his employees or applicants for employment . . . because such individual . . . has opposed any practice made unlawful by this section, or because such individual . . . has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or litigation under this chapter.

Title VII and the Americans with Disabilities Act contain almost identical provisions. 42 U.S.C. §§ 2000e-3(a), 12203(a).