Employers often ask employees to sign employment or separation agreements that contain hold harmless clauses or covenants not to sue. If done properly, the employee receives something of value (a job offer, a one-time payment, a severance benefit, etc.) in exchange for waiving his or right to take legal action against the employer.
Increasingly, employers have used these devices to avoid paying back wages or overtime to the employee, compensation to which the employee is legally entitled.
On August 6, 2013, the United States Court of Appeals for the Sixth Circuit issued a ruling in the case of Boaz v. FedEx Customer Information Services, Inc. that “[a]n employment agreement ‘cannot be utilized to deprive employees of their statutory rights’” under the Fair Labor Standards Act. This decision establishes a precedent for similar federal cases in Michigan.
As an employee, federal and state laws provide certain protections. If your employer has asked you to sign away your legal rights, please contact one of our experienced employment law attorneys to discuss your situation.