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Age bias settlement: Need ADEA waiver, too?

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in Discrimination and Harassment,Human Resources

Q. My company was sued by a former employee for age discrimination under the California Fair Employ­­ment and Housing Act (FEHA). We’re settling the case and including a waiver of the right to proceed under FEHA. Do we need an ADEA waiver, too?

A. Yes. Anytime the plaintiff in an employment lawsuit is over age 40, the parties’ settlement agreement should include a waiver of the right to bring an age claim under both federal and state laws regardless of whether the complaint actually contains a claim of age discrimination. This is to prevent the employee from bringing a second lawsuit for age discrimination under either law should a second suit still be possible under the statute of limitations.

Q. Well, if a settlement agreement must always include an ADEA waiver, shouldn’t it also include the 21-day consideration and 7-day revocation periods mandated by the Older Workers Benefit Protection Act (OWBPA)?

A. Good question, but the answer is “not necessarily.” The OWBPA is a rider to the ADEA.

It states, essentially, that when a current or former employee is asked to waive his or her right to proceed with an age claim under the ADEA, he or she must be given 21 days to seek the advice of counsel (45 days in a group layoff) and consider what effect the waiver will have on his or her legal rights (the “consideration” period) before signing the agreement. The OWBPA also mandates that once the agreement containing the waiver has been signed, the employee has seven days to revoke the agreement (“revocation period”).

With belt-and-suspenders caution, some employers insist on having two settlement agreements: one for the ADEA waiver containing the consideration and revocation periods, and one for all the other claims in the lawsuit. If the employee then revokes the ADEA waiver, the balance of the lawsuit is not revived along with the age claim.

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