When employers offer severance packages to employees age 40 or older, those packages must comply with the federal Age Discrimination in Employment Act (ADEA) and the Older Workers Benefit Protection Act (OWBPA).
These two companion laws govern how employers can write such packages and the way they’re presented to departing employees.
Most employers run afoul of these laws when they ask employees to sign a waiver promising not to sue the company in exchange for the severance. The ADEA requires such age-bias lawsuit waivers to:
- Be in writing and be understandable.
- Specifically refer to ADEA rights or claims.
- Not waive rights or claims that may arise in the future.
- Be in exchange for a consideration (extra pay or another benefit).
- Advise the employee in writing to consult an attorney before signing the waiver.
- Provide the employee with at least 21 days to consider the agreement and at ...(register to read more)