Severance Agreements Should Be Carefully Scrutinized

In this age of layoffs, employees are often presented with severance agreements when terminated.  These agreements typically require individuals to release all potential employment law claims, including age discrimination claims under the Age Discrimination in Employment Act (ADEA), in exchange for severance. 

Before signing away legal rights, severance agreements should be carefully scrutinized.  Our firm assists employees in reviewing severance agreements and negotiating terms contained within these agreements.

The Older Worker’s Benefit Protection Act (OWBPA), part of the ADEA, is designed to protect the rights and benefits of older workers and imposes mandatory requirements for waivers of ADEA rights.  Oubre v. Entergy Operations, Inc. 522 U.S. 422, 427 (1998).  Among these requirements, is the requirement to provide employees who are terminated in a group termination (more than one employee) with OWBPA disclosure information at the same time they are given the severance agreement. The purpose of the OWBPA’s informational requirements is to provide an employee with enough information regarding the termination program to allow the employee to make an informed choice about whether or not to sign a waiver agreement.  29 C.F.R. §1625.22(f)(1)(iv).

Attorneys reviewing severance agreements should carefully scrutinize the OWBPA disclosure information provided to the terminated employee.  In order for an employee to validly release ADEA claims, the waiver releasing such claims must meet all of the strict, mandatory OWBPA requirements outlined in the statute and regulations.  29 U.S.C. §626(f) and 29 C.F.R. §1625.22.  These requirements include, among other things, information about the “decisional unit” or group of employees from which the employer selected employees for termination; the job titles and ages of those terminated and those kept by the employer; and eligibility factors or selection criteria the employer used to make the termination decisions.

In our experience, terminated employees often do not receive the required OWBPA disclosure information or the information they receive is inadequate.  For example, and among other requirements, the decisional unit disclosed may not be the actual group of employees the employer looked at when making its termination decision; or the job titles disclosed are not the job titles the company actually used; or the disclosure information may not include everyone who was terminated, including your client.  Our firm and Dorene R. Sarnoski Law Office were successful in challenging and invalidating the waiver/release agreements signed by employees nationwide in Peterson v. Seagate US, LLC, 2008 U.S. Dist. LEXIS 42179, No. 07-2502 (D. Minn. May 28, 2008).  The court found that the release agreements were invalid as a matter of law because they failed to meet all of the OWBPA mandatory requirements when the disclosure information did not include the job titles and ages of all employees who were terminated, including one of our clients.  The court found that, “[i]t may be that the inadvertent omission of a particular employee would be enough to affect one other employee’s decision to sign the release.”  Id. at 6.

Code Word for Age Discrimination

By:  Jessica Lappin,
Published in:  The Huffington Post, January 17, 2013

New Yorkers over 55 quickly learn the open secret that "overqualified" means "too old." The Great Recession has impacted workers of all ages, but seniors and near-seniors have been hit especially hard. New Yorkers age 55 and older who lose their jobs are out of work for an average of one year, compared to 41 weeks for younger employees.

To highlight the value of older employees, last week the City Council passed a resolution I wrote encouraging New York City employers to hire older workers.

Older employees face a longer, more frustrating job search. To give one example: Pamela, now in her mid-50s was a business manager for nearly three decades when the recession hit. She was laid off and still has not been able to find full-time work. On interviews, Pamela hears the same feedback: her skills are great, but she is "overqualified." One interview was cut short after Pamela revealed the year she graduated from college.

William is in his mid-60s and worked in the New York City fashion industry for more than 40 years. Booking jobs has gotten increasingly tough. Employers like his resume, but repeatedly say he is "overqualified." After 20 interviews without any offers, William has concluded his age is a factor.

Older women and minorities in particular are struggling to find employment. A recent Community Service Society study found that women aged 55 to 64 who are laid off are out of work longer than any other group in New York City. In 2010 the jobless rate for older black and Asian workers was well above the national average. These numbers don't account for the seniors who give up looking for work, or those forced to take jobs with lower pay and fewer benefits.

Retirement at age 55 is not an option for many Baby Boomers. With pensions shrinking and expenses increasing, more seniors have to continue working to survive. More must be done to help them get back into the workforce.

Part of the solution is changing the way companies view older employees. There is a perception that hiring seniors will cost more and they won't be able to perform the necessary work. In reality, older workers offer a wealth of experience and opportunities for intergenerational collaboration.

The Vita Needle factory in Needham, Mass. has become somewhat famous for its embrace of a mature workforce. With an average employee age of 74, the company expects to bring in some $11 million in gross sales this year. And what is good for the company is good for the community. In addition to the needed paycheck, the job gives these older workers a sense of purpose and belonging, leading to fewer calls on government and charitable resources.

Here in New York, the drugstore chain CVS is trying to attract senior employees by offering classes to help with the online application process. Companies including Google, AT&T, and Toys R Us have signed an AARP pledge to recruit workers from across diverse age groups.

Of course, some seniors need more training opportunities to help them re-enter the job market. The New York City Department for the Aging administers the Senior Employment Services (SES) program, also known as Title 5, which helps older workers with computer classes, job placement, and on-site training, while they earn a subsidized income. Seventy-nine percent of participants have successfully kept their jobs after the program ended. But severe cuts in federal funding have left SES with fewer slots and a long waiting list.

To be sure, job creation efforts should benefit New Yorkers of all ages. But with the senior population expected to double over the next 30 years, this group deserves special attention. They're ready to work; they just need a chance. With the right opportunities and training, older New Yorkers can help shape our 21st century economy in a positive way.

Don’t Sign Away Discrimination Claims to Get Severance Pay

1/2/2013 by Michele Bowman, Lawyers.com

Trinity Health Corporation on Dec. 20 settled charges brought by the EEOC over the employer’s alleged policy of denying or delaying severance to employees who file discrimination charges after leaving their jobs.

In general, employers cannot punish employees who exercise their right to file discrimination charges with the EEOC – it violates Title VII of the Civil Rights Act of 1964, which defines unlawful employment practices.

But Becky Thompson’s case is not as simple as it sounds, according to employment lawyer Rich Cohen, who wrote about the case on his firm Fox Rothschild’s Employment Discrimination Report.

Trinity on EEOC’s Radar

In the settlement, Trinity agreed to stop the practice and pay $25,000 to an employee whose severance had been withheld after she brought charges to the EEOC, according to the agency.

“Additionally, Trinity agreed that it will not in the future require employees to choose between receiving severance benefits from them or relief through the EEOC process as a condition of receiving their severance payments,” said the EEOC.

This is not Trinity’s first unpleasant brush with the EEOC. The agency sued the health company in 2011 for sexual harassment and retaliation. Trinity permitted employee Deborah Chisholm to be sexually harassed and then fired her when she complained about it, according to the EEOC. That case is still apparently active.

Common Worry over Signing Agreement

While it’s clear that employees can always file discrimination charges even if they sign a severance agreement, they often worry that the severance payment will be yanked if they decide to file with the EEOC – as it was in Thompson’s case.

“It can be yanked,” Cohen tells Lawyers.com, “but it’s not likely” – especially if you have a good case against the employer for any type of discrimination. Employers often rely on the fact that employees don’t know their rights or just need the money so much that they will sign anything.

“Most of the time, a well-counseled employer will have someone sign an agreement with a release for every possible claim. In order for that to be enforceable, the employer has to give the employee more than they would be otherwise be entitled to under its severance policy,” says Cohen.

What that means is that if your employer is only offering you the standard severance that the company provides for and nothing extra, it cannot require you to waive your right to file claims in order to get the severance money. If it does, you will have a retaliation claim to add to any other claims you might have against it.

When to Take the Money and Run

For a severance agreement’s release to be enforceable against an employee, it must offer her something in exchange for releasing those claims ­– which can be worth a lot of money – and it should be a substantial amount.

If your employer’s standard severance policy is to offer departing employees one week’s pay for every year worked, for example, and you worked for five years, your employer must offer you more than $5,000 in the severance agreement in order for it to be enforceable against you.

A lot of people don’t know this, but if there is a standard severance policy in place, you are entitled to that money regardless of whether you sign the severance agreement or not, says Cohen.

“If you have a good claim, don’t sign it away,” Cohen says. Know what your company’s severance policy says. And if they offer you too little money essentially “in exchange” for your potential claim, you can refuse to sign the agreement, demand your severance, and still file the discrimination claim.

Friendly Fire: References

Taken from Workplace Fairness Blog, week of December 10, 2012

What's the big deal with references during a job search? You sign up a few people who are your biggest cheerleaders and give their names to prospective employers. A recent study of hiring managers made an amazing discovery, 62% of references didn't say good things about the applicant. 62%! This is the workplace equivalent of friendly fire. And remember, these are mostly names that applicants supplied. Which reminds me of a hiring manager that I met years ago. He used an interesting strategy when checking references. He'd call outside of normal work hours and leave a message for the reference. He'd say, "Call me back if you think this person is outstanding." He claimed that people who felt that way would always call back. Those that didn't, didn't.

Not only didn't most of the references say good things, according to the study, the vast majority didn't help the person applying for the job. Only 23% had a more favorable opinion after talking with a reference, while 67% were either neutral or negative after the conversation. Ouch. Here are four steps to ensuring that your peeps help you.

List. You need to go back over every job you've had. Really think long and hard about every boss, coworker, vendor and customer that you worked with. With Facebook and Linkedin, these people are often easy to track down today. Make a list.

Talk. You should never list a reference without talking with them first. Of course, you should start by asking for their permission. If they hesitate, don't push it. They're probably sending you a message that they won't be favorable. If they agree, then ask if you can ask a few questions. Don't make them softballs. Ask probing questions like "What are their red flags?" "Would you hire them again?"

Rank. I'm always concerned about "reference fatigue" with people that I want to vouch for me. If I'm in full job scramble, I could be applying for five or more positions at one time. The last thing you want is for your best references to be flooded with calls. That's why it's so important to divide them into three groups, your A's, B's and C's. Save your best guns, the A's, for the most important opportunities.

Coach: As someone who has been a reference, I really appreciate a quick email updating me when someone is applying for a job and how I can help. Knowing that the company is potentially concerned about a specific topic or issue helps me prepare for their questions and puts me in a better position to address them.

For many years the business literature was full of stories saying that fear of a lawsuit prevented many employers from giving anything more than name and dates of employment when called for a reference. With 62% of references not saying good things about applicants, clearly this concern isn't holding people back from expressing how they really feel. Use these reference strategies and you'll get the right kind of callbacks.

Workzone: Discriminatory job practices working against older workers

By Patricia Sabatini / Pittsburgh Post-Gazette 

It isn't easy to grow old gracefully. But for people 55 and older who want to continue in the work force, the realities of advancing age can be especially harsh.

Simply put, negative stereotypes about being less productive, having dated skills and being adverse to change stop many companies from hiring older workers. Employers also worry about higher health care costs and how long older workers will stay on the job.

"Age is a factor that has been working against older workers for a long, long time," said Sara Rix, strategic policy adviser for AARP, the advocacy group for seniors.

"Employers express concern about technological competence of older workers and their ability to learn, even though we know that the ability to learn even complicated new technologies continues well into old age."

It's illegal for companies to discriminate based on age, but it's a hard thing to fight.

"You don't know what is going through a manager's or employer's head as that person is reviewing resumes," Ms. Rix said.

Even though workers face age discrimination, Americans' traditional retirement age has been steadily moving up. In 1985, 18 percent of all 65- to 69-year-olds were still working. By 2005, that figure had risen to 29 percent, Ms. Rix said.

For older workers who aren't ready to hang up the lunch pail for good, experts offered some advice.

Assuming it will be easier to keep a good job than to find another one, older workers may want to concentrate on making themselves more valuable to their current employer to avoid getting the boot.

To show flexibility and adaptability, volunteer for new projects, Ms. Rix said.

When employees make the boss's life easier, "their value skyrockets," said Kathleen Brush, author and corporate management advisor. "If the boss needs help meeting a tight deadline, don't wait for him to ask for volunteers."

Older workers should resist the temptation to slack off, Ms. Brush said. And avoid being too negative.

"Employee malcontent infects the work environment and takes a bite out of everyone's productivity. That will make the boss miserable," she said. "Rule No. 1, never forget who signs your paycheck."

Older workers should be especially vigilant about keeping their skills fresh, experts said.

"I always recommend they take advantage of any employer-provided training offered," Ms. Rix said. "Older workers can prove they are capable and interested in learning new ways of doing things."

People set on leaving their current job should avoid walking away until they have a new one in hand, she said. "The longer you are unemployed, the harder it is to find a job, and older workers are more likely to be long-term unemployed."

For those deciding to move into a new field, it's a good idea to survey the local labor market to gauge demand. Changing careers later in life can be especially exciting and fulfilling.

"I remember a woman who had been a teacher and became a pilot for a small airline in Guam," Ms. Rix said.

Although many jobs today are advertised online, don't forget to take advantage of networking, she said.

"Who you know can still be a big help finding a job."

For information on age discrimination, visit www.eeoc.gov/laws/types/age.cfm Patricia Sabatini: psabatini@post-gazette.com or 412-263-3066.
First Published December 23, 2012 12:00 am