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.
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.
