When terminating employees, it's smart to ask them to sign agreements that waive their rights to sue your organization for discrimination or wrongful discharge. Typically, employers wrap such waivers into severance packages.
But that's not enough if departing employees are over age 40 because they could sue you for age discrimination. The Older Workers Benefit Protection Act (OWBPA) says such waivers, to be valid, must specifically cite age discrimination and meet other conditions.
Those age-bias waivers must be written in crystal-clear language. Plus, you must give employees time to consult with their attorneys before signing and rethink their decisions after signing. That's why age-bias waivers shouldn't be a do-it-yourself project; run it by your attorney first.
Recent case: When IBM laid off engineer Dale Thomforde, he signed a severance agreement that waived his right to sue IBM for various reasons. Thomforde asked for clarification before signing because he didn't understand whether he could file an age-discrimination lawsuit or not. IBM told him it wasn't comfortable explaining the agreement.
Thomforde sued, and the 8th Circuit Court of Appeals sided with him, saying he could sue IBM for age bias despite having signed the waiver. Reason: The court said OWBPA releases must be written in easy-to-understand language. Thomforde's confusion showed that wasn't the case. Plus, IBM's refusal to answer his questions showed it wasn't willing to clarify the issues. (Thomforde v. IBM, No. 04-1538, 8th Cir., 2005)
Bottom line: IBM could have saved itself big-time litigation costs if it had written a clearer agreement and taken time to answer his questions.