As a result of the growing Baby Boomer population in the workplace, there’s a growing trend toward age discrimination claims. The average verdict hovers around $250,000. Rather than facing the possibility of such a claim, many employers enter release agreements with older workers (defined as over 40!) as part of the termination process. In drafting these releases, it’s wise to consider the impact of the Older Workers Benefits Protection Act (OWBPA), a 190 amendment to the ADA. Here are a few pointers:
- The release must be written in plain English and easily understood.
- The release must specifically refer to claims arising under the Age Discrimination Employment Act (ADEA).
- The release may not address claims that might arise after the date of execution.
- There must be consideration for the release beyond that to which the employee would otherwise be entitled.
- The employee must be advised, in writing, to consult with their attorney before executing the agreement. (A “lowball” offer seldom gets past their attorney.)
- The release must allow the employee to revoke the agreement up to seven days after signing.
- The employee must have up to 21 days to consider the release and up to 45 days if it’s part of an incentive offered to a group.
- Finally, if you offer the release in connection with an exit incentive or group termination program, you must provide information relating to the job titles and ages of those eligible for the program, and the corresponding information relating to employees in the same job classification who weren’t eligible or weren’t selected for the program.
As you can see, the OWBPA requires extensive disclosure as part of any severance and release process and broadens this disclosure if there’s a group termination.