Terminating the Employment Relationship

was truly voluntary and not discriminatory. The court noted that the law regards as the functional equivalent of a discharge those offers of early retirement which, if refused, will result in work so arduous or unappealing, or working conditions so intolerable, that a reasonable person would feel compelled to forsake his job rather than to submit to looming indignities. The company’s promulgation of the VSP could not be said to have presented the plaintiffs with this sort of choice.

d. Preparing Enforceable ADEA Waivers in Connection with an Early Retirement Incentive Although there may be an offer and acceptance of an early retirement incentive, in order to preclude any future claims against the public employer, a legally enforceable written agreement memorializing the agreement of the employer and employee accepting the incentive should be included as part of the incentive process. (Drafting enforceable settlement agreements is discussed below in Section 7.) The agreement should contain a waiver and release by the employee of all claims against the employer relating to his/her employment and acceptance of the early retirement incentive. Specifically, it should contain a waiver and release of any claims arising under the ADEA and FEHA. Without a waiver and release, the employee could sue the employer for violation of the ADEA or FEHA after accepting the early retirement incentive. Whether the employee can actually prove actionable discriminatory conduct by the employer is an entirely different issue. But the waiver and release saves the employer a lot of time and expense because a court may dismiss the lawsuit immediately on account of the enforceable ADEA/FEHA waiver and release. A valid ADEA waiver must be “knowing and voluntary.” 298 In order to be considered knowing and voluntary, the waiver provision in a separation agreement must include specific language required by statute. The specific requirements are addressed in Section 7 below. The requirements include providing an employee with time to review the agreement before signing it and, then an opportunity to revoke his/her agreement after signing it. Generally, if an employer is arranging a severance package for an individual employee because the employer is releasing the employee for reasons unrelated to a group exit incentive, the employee (if he or she is over the age of 40) need only be provided 21 days to consider the agreement, waiver and release. If the employer offers a group exit program, like an early retirement incentive to a class of employees, the employees who are eligible must be permitted up to 45 days to consider the agreement, waiver and release. In either scenario, the employees may choose to sign and enter into the agreement before the end of that 21 or 45-day period. In addition, under either scenario, the employee must have a period of seven days following execution of the agreement to revoke the agreement. And the waiver is not enforceable until the revocation period has expired. Neither the employee nor the employer can waive this seven day revocation period. 299

Terminating the Employment Relationship ©2019 (s) Liebert Cassidy Whitmore 85