Q. Is obtaining a legal release from an employee in exchange for severance pay guaranteed to prevent any legal action by that person? —J.S.
A. As recent court decisions show, employers must exercise extreme caution when obtaining and enforcing releases from their employees.
For the release to be valid, it must be knowing and voluntary. If the release includes a waiver of age-discrimination claims, the document must contain explicit language that includes advice to consult with an attorney, plus you must give 21 days to consider the agreement and seven more days to rescind the waiver after signing.
Furthermore, federal rules say your waiver can’t require employees to waive their rights to file a discrimination charge with the EEOC. Courts routinely find such waivers to be unenforceable. The EEOC goes even further, however, and says any EEOC-complaint waivers have a chilling effect on an employee’s pursuit of such rights and so they’re considered “retaliatory.”
For these reasons, take great care when obtaining waivers of employee claims as part of a negotiated severance package. Always consult with an expert on such agreements before drawing up one.