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Draft bulletproof waiver deals with 6 court-approved benchmarks

by on
in Discrimination and Harassment,Firing,Human Resources

Courtney Melanson suffered two years of unwanted sexual advances by her supervisor at Browning-Ferris Industries (BFI). She took medical leave due to the stress and, when she returned, BFI assigned her a new supervisor.

Soon after, she was laid off as part of a downsizing. In exchange for a severance payment, Melanson signed a release that prevented her from suing BFI over any claims. Six months later, she changed her mind and tried to return the severance money and file suit for sexual harassment. The company said she had already waived her right to sue. She countered that she was depressed, uneducated, without counsel and in financial trouble when she signed the waiver.

Both a lower court and federal appeals court didn't buy her story. They said the waiver was valid. (Melanson v. Browning-Ferris Industries Inc., No. 01-1914, 1st Cir., 2002)

Other companies aren't likely to fare so well. Courts look at six factors to determine the legality of waivers that relate to Title VII claims, including sex discrimination:

1. The education and business experience of the employee signing the waiver.

2. Roles of employer and employee in determining the waiver's provisions.

3. The clarity of the agreement.

4. How much time the employee had to study the pact.

5. Whether the employee had advice from a lawyer.

6. Money or other benefits given in exchange for the waiver.

In this case, the waiver passed muster because the employee had graduated from high school and taken some college courses. She was given time to consider the agreement and could have taken it to a lawyer. Also, she was given four weeks' pay for signing the waiver.

Advice: Be sure that any legal waivers are written in clear, concise language that's appropriate to your employees' education. Provide some financial benefit for signing, but don't feel pressure to overpay. The compensation doesn't have to be exorbitant for the release to be effective. If you're unsure about your waiver standing up in court, have an attorney review it beforehand.

Also, give the worker plenty of time to study the release. A good benchmark: 21 days, the same period required under the Age Discrimination in Employment Act (ADEA). Note: When you ask workers to sign releases that waive their right to file age discrimination suits, those waivers must meet certain separate requirements. (For details, visit www.eeoc.gov/facts/age.html.)

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