Amanda DeMatteis: Hi, Josh.
Josh Goodbaum: Hi, Amanda. What are we talking about today?
DeMatteis: I thought we would talk about an employee who was recently let go from their job and they received a severance or separation agreement. And attached to that document are some disclosures about the group of people that were considered for termination – who was retained and who was let go. The disclosures usually include a list of the positions and even the ages of those employees. And this employee comes to you and says, “Josh, why do I have this information? What use is it to me?” What are you going to tell them?
Goodbaum: I’m going to answer your question, Amanda, but let me start at the beginning and work my way up to it.
The Age Discrimination in Employment Act, or ADEA, is a federal law that was passed in 1967 and that prohibits age discrimination among employers with 20 or more employees. I should make an aside here and say that Connecticut law prohibits age discrimination against every employee regardless of the size of their employer, but federal law – the ADEA – is concerned only with employers with 20 or more employees.
This law had been on the books for a couple of decades when Congress and other officials noticed that employees were releasing their right to sue for age discrimination without really understanding that they were doing so and without all the information they needed to evaluate the strength of their legal claims. And so in 1990, Congress passed the Older Workers Benefit Protection Act, also known as the OWBPA.
The OWBPA does a few things.
Most importantly, it tries to ensure that every release of a claim of age discrimination under the Age Discrimination in Employment Act is knowing and voluntary. Well, how does it do that? It requires that the release agreement must be in plain language that any person of normal education can understand, not in legalese that only makes sense to a lawyer. It must advise the employee who’s going to release their claims of their right to talk with a lawyer, the right to ask questions, and the right to have those questions answered, and it must give the employee at least 21 days from the day they receive the agreement to consider the agreement – to decide whether to sign – and 7 days after they sign to change their mind.
In addition, the OWBPA has certain requirements where the employee’s layoff is part of a group layoff. In other words, this is not just one person being laid off; it’s not an individual layoff; it is a layoff of two or more people.
If there is a group layoff, two things happen. First, the employee must be given not 21 days to consider whether to sign, but 45 days to sign. And second, the employee must receive a disclosure. The disclosure must list all of the employees in the decisional unit with their ages and their job titles and say who was selected for layoff and who was not selected for layoff. The decisional unit is sort of a flexible concept. It might be an entire factory. It might be an entire office. It might be a particular function like the whole accounting department or the whole human resources department.
Why did Congress require this? Well, they wanted to make sure that employees who were considering giving up their right to sue for age discrimination had enough information to see a pattern of age discrimination, if such a pattern existed. They could look at all the people in the decisional unit and say, “Hey, wait a minute. Everybody who’s being terminated is in their 50s and 60s and all the people being kept are younger than that. That’s a problem. I want to talk with a lawyer.” And Congress wanted employees to be able to have that information so they could make knowing and voluntary decisions about whether or not to release their legal rights to sue for age discrimination.
The added benefit of this program is that it gives an employer an opportunity to notice those patterns as well. Hopefully the employer will analyze the ages of the people they’ve chosen for layoff and make sure that there is not a disproportionate impact on people who are older and make sure that they are making these decisions without regard to people’s ages.
Now, importantly, Amanda, if the employer offering the release fails to comply with these requirements under the OWBPA, then the release of legal claims under the ADEA – in other words, the release of the right to sue for age discrimination under federal law – is invalid. In that case, at least in theory, the employee can sign the severance agreement, receive the money, and then still sue for discrimination under the Age Discrimination in Employment Act. Of course, that’s certainly something an employee would not want to do without talking with a lawyer first and making sure that they’re covered.
If you think you’ve been subjected to age discrimination or you have received a severance agreement and you have one of these disclosures, it’s a best practice at that point to speak with an employment lawyer. Make sure you understand exactly what your rights are, what rights you’re giving away, and what all of the risks and benefits are of the decision that you’re making.
DeMatteis: That was so comprehensive, Josh. Thank you so much for sharing. And this isn’t good advice only for people who think they may have been let go or wrongfully terminated as a result of their age. This is how nuanced employment law is and how many different laws that exist to protect employees are potentially involved.
If you’re having any issue at work, whether it be age discrimination or anything else, please feel free to reach out to us. And thank you so much for watching. Take care.