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| Jan 22, 2022
(A) Section 7(f)(1)(H) of the ADEA refers to two types of “programs” that require employers requesting waivers to provide written information: “termination incentive programs” and “other termination programs.” Generally, an “exit incentive program” is a voluntary program offered to a group or class of employees when, in addition to anything of value to which individuals are already entitled (“Additional Consideration” in this section below), those employees are offered consideration in exchange for their decision to voluntarily resign and sign a waiver. Generally, “other termination program” refers to a group or class of employees who have been involuntarily terminated and who are offered additional consideration in exchange for their decision to sign a waiver. The content of this document does not have the force and effect of the law and is not intended to bind the public in any way. This document is intended solely to provide the public with clarification of existing requirements of the act or agency guidelines. If the termination is related to a group leave program: Agreements specifically related to the release of retirement entitlements also include additional information designed to meet the requirements of the OWBPA. See Part IV.A, Question and Answer 6. If the employer does not comply with these requirements, the exemption from age-related claims becomes invalid.  An example in the regulation describes eligibility as follows: “All persons in the construction department are eligible for the program. All individuals who completed their receivables research program in November will be selected for the program. 29 F.F.C. § 1625.22(f)(4)(vii)(B). However, some courts interpret the term “eligibility factors” as referring to criteria such as job performance, experience or seniority on which an employer relies when deciding who to terminate their duties.
See Pagilio v. Guidant Corp., 483F. 2d 847 (D. Minn. 2007) (the court held that the release violated the OWBPA, inter alia, by failing to identify the general criteria by which employees were selected for termination); but see Kruchowski v. Weyerhaeuser Co., 423 F.3d 1139, as amended by, 446 F.3d 1090 (10th Cir. 2006) (the court declared an exemption from claims invalid because it did not identify the selection criteria as “claim factors”; however, in a subsequent revised notice, the court omitted the claim factors as one of the grounds for nullity of release and only ruled that the employer had violated the OWBPA by not identifying the adjudicative entity).  State law generally regulates questions of correct interpretation of a separation agreement and the validity of waivers. For example, under the Minnesota Age Discrimination Act, an exemption must give the employee fifteen days after signing the agreement to change their mind and revoke their signature. Under California law, a waiver cannot release unknown claims unless the waiver contains specific language that expressly provides for such waiver.
Other states may impose additional requirements to obtain an effective waiver of certain legal claims of the state. To determine if a severance agreement is enforceable in the state where you work, contact your state`s labor law department or contact a legal counsel. At least two district courts followed the analysis in kruchowski I and ruled that employers must indicate in their decision-making units the reasons for selecting employees for dismissal. One of them predated the Kruchowski inversion; the second case, subsequently (see Merrit v. First Energy Corp., C.A. No. 00585 (N.D. Ohio March 31, 2006) and Pagliolo v. Guidant Corp., 483 F.Supp.2d 847 (D. Minn. 2007)). Finally, employers must weigh competing legal and business risks when drafting exit agreements.
What may be appropriate in one downsizing (FRR) may not be appropriate in another FRR, depending on the employer`s operational objectives and risk assessment. As noted below, there is no risk-free termination or risk-free departure agreement. The 21-day individual termination requirement does not apply to exit incentive or group termination programs. Below is a list of the age and job titles of employees who were selected for dismissal [or dismissal] and who were not selected and who offered consideration to sign the waiver. With the exception of employees selected for dismissal [or dismissal], no other employee is eligible or offered consideration in exchange for signing the waiver: when it comes to terminating an employment relationship, some employers take the same approach. They take their “form” departure agreement, which includes a general release, and optimize termination dates and the number of weeks of severance pay with the idea that a one-size-fits-all is more or less suitable for everyone.  This document uses the term “termination agreement” to describe any termination agreement between an employer and an employee, whether voluntary or involuntary, that requires the employee to waive the right to sue for discrimination. If an employer is considering laying off employees who are 40 years of age or older, they should consider asking employees to sign a waiver of their ADEA claims. These exemptions are governed by the Older Workers Benefit Protection Act (OWBPA) and must be drafted and executed in accordance with that Act. The essential requirements of an OWBPA publication are: (iv) If an employer combines information about voluntary and involuntary dismissals in its disclosure, the employer must present the information in a manner that distinguishes between voluntary and involuntary dismissals.
In 1990, Congress amended ADEA by adding the Older Workers Benefit Protection Act (OWBPA) to clarify prohibitions on age discrimination. The OWBPA establishes specific requirements for a “knowing and willing” release of ADEA claims to ensure that an employee has every opportunity to make an informed decision as to whether or not to sign the waiver. There are additional disclosure requirements under the law when exemptions are requested by a group or class of employees. See “Additional requirements for mass layoffs of employees aged 40 and over” at IV.B. Whenever a client asks me to prepare a departure agreement for a departing employee, the first thing I ask is whether the employee is 40 years of age or older. This is important because severance agreements for workers aged 40 or older must comply with the Older Workers Benefit Protection Act (OWBPA), which sets out the minimum requirements for exemption from entitlements under the Employment Age Discrimination Act (ADEA). The existence of a “program” depends on the facts and circumstances of the case; However, the general rule is that a “program” exists when an employer offers additional consideration – or an incentive to resign – in exchange for signing a waiver for more than one employee.  If, on the other hand, a large employer has dismissed five employees in different units for just cause (e.g., B poor performance) for several days or months, it is unlikely that a “program” exists. For exit incentive programs and other termination programs, the employer determines the terms of the termination agreement, which are generally non-negotiable.
 Given the economic uncertainty caused by COVID-19, many businesses will have to make the difficult decision to impose layoffs, and older workers could be among those who unfortunately lose their jobs. Employers requesting an exemption from dismissal claims due to age discrimination of dismissed workers should be aware of the specific requirements of the Federal Act on Age Discrimination in Employment (“ADEA”), as amended by the Act on the Protection of Benefits for Older Workers (“OWBPA”).