A recent decision in Pennsylvania federal court (Ray v. AT&T, Inc., No. 18-3303, E.D. Pa, 1/11/2019) is an example of the worst-case scenario: an employee who signed a leave of absence and accepted severance pay in a RIF could still sue for age discrimination. The court found that the Severance agreement under the OWPBA was invalid because it did not contain sufficient useful information about the RRF to allow the employee to make an informed decision as to whether to release her right to sue. Well, for employers who offer severance pay in exchange for a layoff agreement, here are some pitfalls to avoid. The mixed use of this defined term can have the potentially catastrophic, presumably unintended, consequence of requiring the “officers, directors, representatives, etc.” of the corporation to pay the full severance pay. If you are over 40 when you are presented with a settlement offer, the rules are very simple. They have rights under the Older Workers Benefit Protection Act (OWBPA), which Congress passed in 1990.
Under this Act, any dismissed employee over the age of 40 who is offered a severance agreement must have at least 21 days to review the offer. For example, the Court of Appeals for the Eighth Circuit (which includes Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota) recently struck down a waiver because it was confusing for the employee. As the court indicated, the OWBPA requires that a release be written in clear and unambiguous terms – not in legal German! In this case, the employee sought clarification from the employer`s corporate counsel regarding two manifestly contradictory provisions – release and the obligation not to pursue the provisions. However, the lawyer did not feel “comfortable” with the clarification. Therefore, the court declared the publication invalid, stating: “It seems obvious that when an agreement needs to be clarified, it is not written in a manner calculated in such a way that it is understood.” In light of this decision, employers should carefully consider whether their termination and dismissal agreements should continue to include the known obligation not to sue. Claims under the Employment Age Discrimination Act (“ADEA”) may be waived in a compensation agreement, but the compensation agreement must comply with all requirements of the Older Workers Benefit Protection Act (“OWBPA”). Unfortunately, violations of the OWBPA remain among the most common mistakes made by employers when drafting termination agreements. Do not hesitate to contact the firm if you have any questions about this article or about the departure and release agreements. Employers should also keep in mind that OWBPA regulations prohibit employers from imposing a penalty on the employee if he or she questions the validity of an exemption agreement. Inadmissible penalties in indemnification agreements may include provisions requiring employees to claim consideration received if an employee brings an action against the validity of the indemnification agreement, or a provision requiring employees to pay the employer`s attorneys` fees and/or damages based on the filing of an ADEA lawsuit. 29 C.F.R. §1625.23(b).
(Note, however, that if an employee successfully challenges the validity of the agreement and prevails in the case of an ADEA lawsuit, a court may set off any consideration paid to the employee under the indemnification agreement against damages awarded under the subsequent lawsuit.) You then have the choice to negotiate with the employer on your own behalf or to ask us to negotiate for you. If you hire us, our severance lawyers in Iowa will use their legal skills and experience to help you get the most out of your termination agreement. Your employer has therefore offered you severance pay. That`s good news! Or, if it`s not exactly good news, it`s at least a glimmer of hope on the horizon of a bad situation. A severance offer means that your former employer is willing to shorten your period of unemployment while you are looking for a new position. The court will take into account the knowledge and legal sophistication of the former employee: what it considers to be enough time for a terminated contract lawyer to review an agreement will obviously be less than what a frying chef needs. In one example, when reviewing the validity of a senior executive`s termination agreement, a federal court found that it took only one day for the dismissed employee to review the offer. For a low-level manager at a cigarette factory, a court ruled that the five days the employee had to review the initial offer were sufficient.
Unfortunately, as long as your employer has given you a few days, or in some cases even a single day, to review the severance offer, it is likely to be under the law as it applies to employees under the age of 40. What does this mean for you? If you have been offered a departure agreement and would like to renegotiate it, or if you have questions about your rights, you should contact a lawyer as soon as possible to discuss your options. Time is not on their side. You will need the best possible advice before deciding whether to accept, reject or renegotiate the proposed agreement. Practical tip: Contact an experienced employment and employment counsellor to tailor the agreement to the specific circumstances and confirm the reasonable scope of legal claims that may be disclosed given the facts and circumstances of each former employee`s departure. A crucial question in deciding whether to accept the deal, reject it, or try to negotiate the deal is, “How much time do I have to decide what to do?” (For more information on how to make your decision, check out our article on starting options.) Most companies will tell you that you need to respond within a certain amount of time, or they will withdraw the offer. This period can range from a single day to more than a month, but there are laws that regulate the minimum duration that your employer must grant you. This blog post reviews the rules your employer must follow when assigning you this deadline. It is easy to draft a termination agreement. Just use the one your lawyer sent you last year and change the name and amount of severance pay. Or Google “Separation Agreement” and use the template on the Internet.
A: In Iowa, you can generally require employees to waive all future claims, including claims by the Iowa Civil Rights Commission. There are some things that generally cannot be lifted in a severance agreement, such as the benefits of . B in the service of employment. Practical tip: Check the standard phrase in each agreement carefully to make sure it is appropriate and sufficient. Therefore, we generally recommend that employers enter into an appropriate severance and compensation agreement if they offer severance pay. .
