Checklist: What Your Age Discrimination Waiver Should Include

By: Laura Mohammad
October 12th, 2011

The Older Workers Benefit Protection Act (OWBPA) serves as an amendment to the Age Discrimination in Employment Act (ADEA) of 1967, and protects employees 40 years old and over from being pressured into signing an age discrimination waiver in exchange for severance pay. The OWBPA outlines specific tasks the employer has to complete for the waiver to hold up in court. Here are key elements that should be included in an age discrimination waiver, compiled with the help of Steve Roppolo, managing partner at Fisher & Phillips LLP’s Houston office.

• Plain English. You are responsible for making sure that the waiver is written clearly. Legalese won’t cut it.
  
  
• Naming ADEA. EEOC regulations specifically note that an OWBPA waiver must clearly spell out the ADEA by name.
  
  
• After the fact. A waiver cannot include rights and claims that may arise after the date on which the waiver is executed.
  
  
• Legal counsel. You have to include encouragement to seek advice from a lawyer.
  
  
• Consideration period. You need to give the employee a 21-day consideration period and a seven-day period for backing out of the agreement. You do not want the employee to feel pressured in any way to sign the document.
  
  
• List. If you are laying off a group, you need to include a list of the people who are being laid off, along with ages and job classification. This allows them to check to see if there is a pattern.
  
  
• Consideration in a layoff. If at least two people are being laid off in a reduction in force at the same time, you have to give a 45-day consideration period for the employees to consider the agreement, so that they have plenty of time to study their options and the facts and figures you’ve given them.
  
  
• Additional pay. The waiver has to be supported by consideration in addition to what the employee already is entitled to.
  
  
• Unintended pattern. In general, it’s a good idea to review who you’ve decided to let go, just to make sure you haven’t selected people from a particular group and created a pattern. You may decide to go forward, but you need to make sure you are aware of any patterns and why you chose the people targeted. You want a defensible, measurable reason for the people chosen.
  
  
• The biggest mistake. The worst thing you can do is to give an employee a severance package, have them sign a waiver, then find out later that you didn’t follow federal guidelines. That is when successful claims occur. Typically, if you have covered all the bases on your waiver, you’ll be in good shape before a judge.

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