Terminating the Employment Relationship

plaintiff had ongoing performance issues until he was finally terminated from employment. Plaintiff brought suit and alleged, in part, that the VSIP violated the ADEA. The court held that the memo to all employees did not make the VSIP misleading or coercive. The company was frank and upfront that the VSIP was part of a larger goal to reduce costs that may include later involuntary reductions-in-force depending on the number of persons who accept the VSIP. The memo did not mislead employees into thinking that if they did not accept the VSIP, they would be laid off. The VSIP was truly voluntary. Vega v. Kodak Caribbean, Ltd. 305 A company decided to downsize. It announced the availability of a voluntary separation program (VSP) on September 15. The company distributed descriptive documents to nearly all employees regardless of age or years of service. The materials spelled out the benefits afforded, method of calculating severance pay, and how the program would be implemented. The company encouraged workers to participate, but did not require them to do so. It informed all employees that if substantially fewer than 26 persons opted to enter the VSP, others would be reassigned or furloughed in order to reach the desired staffing level. On October 4 and October 10 the plaintiffs signed the VSP agreement and received a severance package. The plaintiffs brought suit alleging the VSP was discriminatory under the ADEA. The plaintiffs alleged that the company’s sponsorship of the VSP resulted in their constructive discharge by forcing them into an unpalatable choice between early retirement and dismissal. The court ruled in favor of the company finding that the VSP 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 their 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

Terminating the Employment Relationship ©2022 (s) Liebert Cassidy Whitmore 86