Offering severance agreements that ask employees to waive the right to sue can help tough layoffs go smoother. But companies can’t forget these special rules regarding age discrimination claims.
Under the Age Discrimination in Employment Act (ADEA), agreements waiving the right to sue have to meet special requirements – otherwise courts will let former employees file claims anyway.
The law requires that agreements:
- Specially mention a waiver of ADEA claims (a broad release of “all claims” isn’t good enough)
- Advise employees, in writing, to consult an attorney before deciding whether or not to accept the agreement, and
- Give people 45 days to make the decision (once they do sign, they have another seven days to revoke the agreement).
Also, for the release to be valid, employers must give employees certain written information when the agreement is offered. That includes:
- What “class, unit, or group” of employees was considered for the terminations
- The timeframe in which the reduction will take place
- The criteria used for making the termination decisions, and
- The job titles and ages of all employees picked to be let go, as well as the titles and ages of people in the affected departments who weren’t chosen (though you don’t need to give any names).
