Why does my employer's severance agreement and release say I should consult an attorney?
If you're over 40, it's because there's a law that requires it. (It's not because your employer is trying to do you any favors!)
Congress passed a law in 1967 called the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §(s) 621, et seq. Given its name, unsurprisingly, it bars age discrimination in certain employment scenarios.
For an employee's waiver of his or her rights under the ADEA to be considered enforceable by a court, it must be "knowing and voluntary." For a while, courts across the country were split in interpreting just what a "knowing and voluntary" waiver was.
Thus, in 1990, as it often does, Congress stepped in and clarified by way of enacting the Older Workers Benefits Protection Act ("OWBPA"), 29 U.S.C. §(s) 626(f), which specifies that a waiver of ADEA claims must contain certain minimum information to constitute a "knowing and voluntary" waiver. That includes:
(1) The release must be written in a manner calculated to be understood by the employee signing the release, or the average individual eligible to participate;
(2) the release must specifically refer to claims arising under the ADEA;
(3) the release must not purport to encompass claims that may arise after the date of signing;
(4) the employer must provide consideration for the ADEA claim above and beyond that to which the employee would otherwise already be entitled;
(5) the employee must be advised in writing to consult with an attorney prior to executing the agreement;
(6) the employee must be given at least 45 days to consider signing if the incentive is offered to a group;
(7) the release must allow the employee to rescind the agreement up to 7 days after signing; and
(8) if the release is offered in connection with an exit incentive or group termination program, the employer must provide information relating to the job titles and ages of those eligible for the program, and the corresponding information relating to employees in the same job titles who were not eligible for the program.
The nature of the requirements suggests that Congress was concerned employees who were met with the possibility of signing a release of all claims did not know the full implications of signing the release. Thus, they added in requirements that would additionally protect employees, including requiring employers to advise employees, in writing, to consult with a lawyer before signing.
It was a good idea.
Employees often don't know that they have claims in the first place and thus wouldn't know how those claims could be brought to bear in negotiating a severance agreement. It is one reason, among many, why it is a good idea to contact an employment attorney to review any agreement that includes a general release or release of claims.
For more about signing severance agreements, click here.
Doorways Employment Law is a virtual employment law practice, leveraging the power of technology to connect with clients in the most efficient and convenient way possible. It specializes in employment law counseling, strategic advice and representation to individuals and businesses across Massachusetts, including on agreements, severance and release issues. Contact Doorways Employment Law for an employment law consultation.