Last week, we wrote about some basic things you should consider when you are handed a severance package from your employer. We mentioned the Older Workers Benefit Protection Act ("OWBPA"), and this week we're digging into the details of your rights under the OWBPA.
The OWBPA is part of the Age Discrimination in Employment Act, which protects workers who are 40 and older from age discrimination. The OWBPA provides workers over 40 with extra protection in the context of waiving age discrimination claims in a severance agreement.
To be effective, the OWBPA requires all waivers to be "knowing and voluntary." In other words, for the employer to be successful in getting you to waive any age discrimination claims you may have against it, the request for you to release your claims must:
- Be in writing;
- Be easily understood (no legal jargon);
- Refer specifically to the ADEA;
- Not require you to raise any claims that may come up any time after you sign the agreement;
- Be in exchange for something of value to you (the severance payment or some other benefit to you);
- Give you 21 days to consider the offer; and
- Give you 7 days to revoke the offer after you've signed it.
When employers terminate two or more employees (a "reduction in force") and either of those employees is over 40, the OWBPA provides even more protection to older workers. The employees must be given 45 days to consider the agreement, not 21 (the 7-day revocation period remains the same). In addition to giving the employees more time to consider the agreement, the employer must also provide all older workers with the following info:
- The unit of people who are covered by the reduction in force (the department or group that's being let go);
- The eligibility factors for the program (what criteria are they using to decide who stays and who goes);
- The job titles and ages of everyone who is being terminated; and
- The ages of employees who aren't being terminated.
The OWBPA only applies to claims of age discrimination, not any other potential claims. And employers can put provisions in the severance agreement limiting your review period (for example, stating that negotiations do not restart the 21-day review period, or that the revocation right only applies to your age claim, not the entire agreement). As you can see, things get complicated if you're being laid off as part of a reduction in force. Contact us if you've received a severance package and need help.