How to avoid age discrimination issues during layoffs.
There are a variety of reasons for an employer to offer severance to an employee who is separating from employment (e.g., to settle threatened or actual litigation, as a goodwill gesture in the event of a layoff), but in virtually all situations, the employer is going to insist that the employee sign a release as a condition to receiving the settlement payment.
This article outlines some of the most important issues, specific to age discrimination, employers should consider when drafting such waivers. In all circumstances, it is advisable that outside counsel review all agreements.
The Age Discrimination in Employment Act (ADEA) has a list of requirements that must be incorporated into your release. They focus on making sure the departing employee does not waive any right or claim under ADEA unless the waiver is “knowing and voluntary”. This means the release must:
- Be "written in a manner calculated to be understood" by the employee; and
- Specifically refer to the employee's rights or claims under the Age Discrimination in Employment Act; and
- Only waive rights or claims that arose prior to the date the waiver was signed; and
- Provide consideration; and
- Advise the employee to consult an attorney prior to executing the release; and
- Allow the employee at least 21 days to consider whether she will sign the agreement; and
- Allow the employee at least seven days to revoke the agreement.
Keep in mind, a release under the Age Discrimination in Employment Act may not preclude an employee from filing a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) or participating in an EEOC investigation.
A release agreement can serve useful business purposes, including, but not only, litigation prevention and avoidance. To achieve its objective, however, the waiver must be carefully drafted to ensure that if challenged, it will be enforced.
Modern Business Associates deals with these kinds of issues on a frequent basis. As a Professional Employee Organization, our clients rely on us to help them effectively deal with these kinds of topics including issues around age discrimination.
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