Terminating the Employment Relationship

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.” 306 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 the 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 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. 307 For early retirement incentives or other group exit programs, employers should be sure to provide all eligible employees with a written document which informs the employees of the class, unit or group of individuals who are eligible for the program; the eligibility factors; and the time limits for the program. The employer must also list the job titles and ages of each individual eligible or selected for the program, and the job titles and ages for each employee not eligible or selected. Employers should be careful to not group or cluster job titles or ages. In addition, a waiver may not be used to justify interfering with the protected right of an employee to file a charge or participate in an investigation or proceeding conducted by the EEOC. In other words, a waiver cannot: (1) require an employee to waive any right to file a charge with the EEOC, (2) state that the waiver itself violates the OWBPA, or (3) require an employee to waive any right to participate in an EEOC investigation. However, at least one court has held that if a waiver includes an agreement by the employee to waive their right to file a charge with the EEOC or participate in an investigation, it does not render the rest of the waiver relating to age discrimination claims under the ADEA invalid. 308 Furthermore, the EEOC has taken the position that employers may not practice a policy of refusing to re-hire former employees who accepted a severance package or retirement incentive because such practices have a disparate impact on persons over the age of 40. It remains to be seen if a court will agree with EEOC’s position. 309

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