Severance agreements are more complicated when older workers are involved. The Age Discrimination in Employment Act (ADEA) requires that employees age 40 or older who waive their rights to file age discrimination claims must have at least 21 days to consider whether to sign and another seven days to back out once they do sign.
But there’s a way to make it easier to get severance agreements for older workers to stick. Instead of a general severance agreement for most employees, and a special ADEA-compliant one for older workers, use a uniform agreement that complies with the ADEA for all severance agreements.
That’s what one employer recently did. When the former employee who signed the agreement tried to get out of it, the court refused.
Recent case: Mary Gascho worked for a hospital for years as a nurse, the last 18 years while married to the chief executive officer and president. Gascho suspected her husband was having an affair with another hospital employee. Around the same time, her husband became violent toward her, allegedly raping her one night.
Gascho then confronted her husband and his alleged mistress at work about their affair. Her husband fired her on the spot.
She went to HR, which reversed the termination and allowed her to takefor mental health treatment rather than letting the termination take effect.
When she returned to work, the hospital offered her a severance agreement in which she would receive a year’s salary and health insurance coverage for 18 months in exchange for quitting and promising not to sue the hospital for any claims related to her employment.
HR explained that she had 21 days to consider the offer and should consult an attorney about the matter before signing. She also had seven days to rescind the agreement after signing. Those terms are required by the ADEA to waive age discrimination claims, but not required for Title VII discrimination claims.
She signed the agreement after discussing the matter with her divorce attorney and her children. The divorce attorney recommended she consult aattorney, but she chose not to.
A year later, she filed a federal lawsuit seeking to rescind the agreement.
Gascho argued that she had been under duress when she signed the agreement and felt she had no choice. She also testified that she feared what her husband might do if she didn’t sign. She said she ultimately signed because she needed the money.
The court dismissed her claims. It noted that the agreement complied with the ADEA waiver provisions. The court said that showed that the hospital was bending over backward to be fair. Plus, the court said the hospital wasn’t responsible for the husband’s private acts.
All things considered, the court said Gascho had been treated fairly and signed voluntarily, so she should be bound by the terms and conditions she accepted. (Gascho v. Scheurer Hospital, No. 09-2077, 6th Cir., 2010)
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