Share on LinkedInShare on LinkedIn

ARTICLE · 02 SEPTEMBER 2018

Employee Need Not Give Severance Back Before Moving Forward

Foley & Lardner LLP
Explore more from Foley & Lardner LLP

Severance An employee signs a separation agreement and receives severance pay. The employee then has second thoughts, alleges she was coerced into signing the agreement, and wants to pursue...

United StatesEmployment and HR
John Birmingham Jr.
John Birmingham Jr.
Author LinkedIn connections

An employee signs a separation agreement and receives severance pay. The employee then has second thoughts, alleges she was coerced into signing the agreement, and wants to pursue her discrimination claims in court. Must the employee give back the severance before suing?

On August 13, 2018, in McClellan v. Midwest Machining, the Sixth U.S. Circuit Court of Appeals (covering Kentucky, Michigan, Ohio, and Tennessee) joined the Eighth Circuit in answering: No.

Under the common law of many states, and especially in commercial cases, the party seeking to invalidate a settlement agreement must first "tender back" the monies received before proceeding in court. The Sixth Circuit majority concluded (in agreement with the EEOC, which submitted a brief in support of the employee's position), based upon policy and practical reasons, that the tender back doctrine does not apply to federal discrimination claims.

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

Register for freeORLog in

View source

Related Articles

Legal Intelligence Newsletters: sign up for the latest legal and regulatory news on your chosen topics

Read more about

Related Comparative Guides

See more popular content from

Article

Treasury Issues Temporary Regulations On Trump Accounts And Contributions

The U.S. Department of the Treasury and IRS recently issued temporary regulations that provide an immediately effective framework for establishing and administering “Trump Accounts,” including broad automatic enrollment and large-scale contributions funded by governmental and charitable donors. The regulations became effective September 30, 2026, apply to taxable years beginning on or after January 1, 2026, and expire September 30, 2029.
United StatesEmployment and HR
Fennemore Craig, P.C.
Fennemore Craig, P.C.
Article

California Passes AB-1883 Targeting AI Workplace Surveillance Of Employees’ Emotional State And Neural Data

On Aug. 30, AB-1883 received final legislative approval and now heads to California Governor Gavin Newsom for signature or veto. If enacted, AB-1883 would prohibit employers from using workplace surveillance tools that rely on artificial intelligence (AI) to recognize, infer, or predict an employee’s emotional state, or to collect “neural data.”
United StatesEmployment and HR
Barnes & Thornburg LLP
Barnes & Thornburg LLP
Article

2026 Changes To FLSA Overtime Exemption Rules: What Employers Should Know About Revised Salary Requirements

Federal overtime exemption rules have shifted back to 2019 standards following court challenges to the Department of Labor's 2024 salary threshold increases. Understanding how these revised requirements affect executive, administrative, professional, and highly compensated employee classifications is critical for maintaining wage-hour compliance.
United StatesEmployment and HR
Genova Burns
Genova Burns
Article

Recent Developments In Mobley v. Workday: California Court Allows Key AI-Hiring Bias Claims To Move Forward

On June 22, 2026, in Mobley v. Workday, Inc., U.S. District Judge Rita Lin largely denied Workday’s motion to dismiss the plaintiffs’ Third Amended Complaint, including rejecting the company’s argument that California’s anti-discrimination laws do not apply to its screening of applicants outside California who are applying for jobs in other states or countries.
United StatesEmployment and HR
Reavis Page Jump LLP
Reavis Page Jump LLP
Article

DOL Announces New Enforcement Policy For Mental Health Parity Nonquantitative Treatment Limitation Requirements

The US Department of Labor has issued new guidance establishing a streamlined framework for enforcing mental health parity requirements under MHPAEA, focusing enforcement on three priority areas while maintaining nonenforcement of controversial 2024 rule provisions. This guidance aims to reduce compliance burdens on plan sponsors while ensuring participants maintain access to mental health and substance use disorder benefits comparable to medical and surgical coverage.
United StatesEmployment and HR
Mayer Brown
Mayer Brown
Article

Texas Governor Abbott Directs TCEQ To Freeze All Data Center Permits In A Whole-of-Government Action

Governor Greg Abbott has ordered the Texas Commission on Environmental Quality to immediately halt all environmental permits for data center projects, expanding a statewide regulatory freeze that now encompasses power, water, and environmental approvals. This directive establishes strict operational mandates requiring data centers to fully fund infrastructure costs, report all resource consumption...
United StatesEnvironment
Foley & Lardner LLP
Foley & Lardner LLP
Article

California Enacts Seven Data Center Bills, Effective January 1, 2027: New Tariff, Entitlement, And Disclosure Rules For Hyperscalers, Developers, And Power Producers

California Governor Newsom signed seven data center bills into law on September 21, 2026, establishing a comprehensive regulatory framework that takes effect January 1, 2027. These bills create new tariff regimes administered by the California Public Utilities Commission, impose extensive reporting requirements on data center operators, and establish water disclosure mandates and CEQA treatment protocols.
United StatesEnergy and Natural Resources
Foley & Lardner LLP
Foley & Lardner LLP
Article

Texas Escalates Data Center Oversight With Attorney General Water-Use Investigation

Texas has launched a sweeping investigation into hundreds of data center developments that failed to comply with mandatory water use surveys, marking the latest escalation in a seven-week regulatory crackdown. The state's actions have frozen permits, paused interconnection studies, and exposed projects to criminal and civil enforcement, all while the industry faces mounting scrutiny over its rapidly growing demands on electricity and water infrastructure. With multiple state agencies now coordinating enforc
United StatesEnergy and Natural Resources
Foley & Lardner LLP
Foley & Lardner LLP
Article

Oil Is Near $90 And Gas Is Near $3. Same Wells, Different Markets.

Associated gas production in the Permian Basin continues to surge alongside oil drilling, but natural gas prices have diverged sharply from crude oil, creating significant challenges for contracts written under different price assumptions. With Henry Hub futures trading around $3 per million Btu while WTI crude hovers near $90 per barrel, operators and service companies face difficult questions about pricing mechanisms, curtailment rights, and minimum volume commitments that may no longer reflect current
United StatesEnergy and Natural Resources
Foley & Lardner LLP
Foley & Lardner LLP
Article

Diesel Stocks Are Expected To Fall Below 100 Million Barrels. Check Your Fuel Clauses.

Diesel prices have shattered records, hitting $6.529 per gallon nationally while distillate inventories plunge below five-year lows and are expected to remain there through most of 2027. With crack spreads exceeding $106 per barrel and global supply disruptions intensifying, fleet operators and oilfield services companies face mounting fuel costs that many existing contracts weren't designed to handle.
United StatesEnergy and Natural Resources
Foley & Lardner LLP
Foley & Lardner LLP