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You're about to have a reduction in force and you're going to offer a severance package to those effected: one week of salary for every year of service in exchange of a full release of all claims. If one or more employees affected by the reduction in force is 40 years of age or older, you'd better make sure that your release language complies with the the Age Discrimination in Employment Act ("ADEA"), as amended by the Older Workers Benefit Protection Act ("OWBPA"). Unlike other general releases, by statute, an ADEA/OWBPA release must have certain required elements for it to be effective.
One employer, in this recent case, learned the hard way. The employer RIFed the plaintiffs, but failed to inform them "about the group of employees who were being terminated as a result of the reorganization or about employees who were not selected for termination," as the law requires. Consequently, the age discrimination release that the plaintiff signed wasn't worth the paper it was printed on.
Kinda like this blog.
If you are going to lay off anyone over the age of 40, to obtain a release of potential age discrimination claims, you must obtain a knowing and voluntary waiver. This means, at a minimum, your release must include the following six elements:
Plus, in a RIF situation, the employer is required to provide the following information to the affected employees: (a) any class, unit, or group of individuals covered by such RIF, any eligibility factors for such RIF, and any time limits applicable to such RIF; and (b) the job titles and ages of all individuals eligible or selected for the RIF, and the ages of all individuals in the same job classification or organizational unit who are not eligible or selected for the RIF.
Unless, you've done this several times before, consider engaging an employment lawyer to walk you through the process. Otherwise, that severance you pay may be used to subsidize a subsequent age discrimination claim against your company.
For more on age discrimination releases, read the statute and review the EEOC guidance.
This article was originally published on Eric B. Meyer's blog, The Employer Handbook.
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