February 25, 2015
By Marlisse Silver Sweeney, Corporate Counsel

It may sound counter intuitive, but businesses may want to consider asking independent contractors to release any employment-related claims they have against the company, suggests the ever-witty Eric Meyer of Dilworth Paxson in a recent post.

He describes how Allstate Corp., which restructured its business many years ago and converted its employees to independent contractors, made them release any past or present employment-related claims before signing on. When the U.S. Equal Employment Opportunity Commission heard of this move, it came down hard against Allstate, claiming the company’s actions didn’t fall within the requisite rules about releases and that they were retaliatory.

However, Meyer says the U.S. Court of Appeals for the Third Circuit disagreed with the EEOC, saying it failed “to articulate any good reason why an employer cannot require a release of discrimination claims by a terminated employee in exchange for a new business relationship with the employer.” In other words, go ahead and get those releases signed.

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