Is It Legal For My Employer To Include A Waiver Of My Rights Under The ADEA In A Severance Agreement?
If you are being terminated from your job, your employer may offer you a severance package. Before you can receive your severance benefits, your employer will first require you to sign a severance agreement or other legal document. If you are over 40 years old, you could be surprised to see that it includes an agreement that you are waiving your rights under the Age Discrimination in Employment Act (ADEA). Is this legal?
ADEA’s Requirements for Waivers of Rights in Severance Agreements
The Older Workers Benefits Protection Act (OWBPA), which is a part of the ADEA, allows waivers of ADEA rights in severance agreements—as long as certain requirements are met. The OWBPA most commonly applies to reductions-in- force and involuntary terminations, but it could also be required in early retirement, incentive exit plans, and voluntary departures from a job. The Act requires the following provisions to be included in releases of ADEA rights:
- The waiver of ADEA rights must be in writing.
- The waiver must be written in plain, clear language that the employee can understand.
- The waiver must specifically refer to rights under the ADEA and refer to the ADEA by name.
- The waiver cannot require the employee to waive rights under the ADEA that may arise in the future.
- The waiver must be given in exchange for some valuable consideration—which is something of value.
- The waiver must advise a worker to consult with an attorney before signing the severance agreement.
- The waiver must give the employee 21 days to consider the agreement before signing it. This runs from the date of the employer’s final offer. If major changes are made to the final offer, the 21-day period restarts.
- The waiver must give the employee at least seven days after signing it to revoke it.
If a waiver does not include all of these provisions, it is not valid. When an employer asks two or more employees who are over 40 years old to sign a severance agreement with an ADEA waiver of rights clause, the employer must comply with additional requirements. This provision applies whether the terminations are the same day or staggered. The following additional provisions must be included:
- The class or group of employees covered by the exit program.
- Factors used to determine who was eligible for the exit program, and any applicable time limits for the exit program.
- Job titles and ages of employees selected for the involuntary termination or voluntarily incentive program.
- Ages of employees in the same job classification or organizational unit who were not selected for the involuntary termination program or are ineligible for a voluntary incentive program.
If you are being offered a severance agreement with an ADEA waiver as part of a termination program, you should not sign it until you review it with an experienced employment discrimination attorney. Call me at 949-679-9909 or toll-free at 877-304-7066 to schedule a free, no-obligation consultation.