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OWBPA doesn’t cancel out courthouse-Step settlements

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in Discrimination and Harassment,Human Resources

The federal Older Workers Benefit Protection Act (OWBPA) requires employers to give older workers at least 21 days to consider the offer if any termination or severance-pay agreement asks them to give up their right to sue for age discrimination. But fortunately, once the case is in court, there’s no waiting period.

Employees who settle their cases before trial can’t come back within the waiting period and rescind the agreement—even if they never signed it.

Recent case: Doreen Powell was 52 years old when she was terminated for failure to bill enough business for her employer. She claimed age discrimination and sued in federal court.

Shortly before the case was to go to trial, Powell (who was represented by an attorney) agreed to settle for $35,000 plus a positive reference. But before she signed the agreement, Powell changed her mind and demanded a trial. She alleged that because the OWBPA gives older employees 21 days to consider the settlement of age-related lawsuits, she had three weeks to reconsider.

The 2nd Circuit Court of Appeals disagreed. It said that the parties had clearly agreed to settle, and that the OWBPA was meant to protect employees at the time they lose their jobs and are vulnerable, not when they are about to go to trial. (Powell v. Omnicom, No. 06-0300, 2nd Cir., 2007)

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