So, you signed a severance agreement. The agreement says that you waived claims under a lengthy list of laws that you’ve never really heard of. In exchange, your former company gave you a few weeks’ salaries. But you think you were the victim of discrimination, and you want to sue the company. Does the severance agreement prevent you from suing?
First things first. If you suspect that you have suffered discrimination or retaliation at your job, it is extremely important that you contact an employment lawyer before signing a severance agreement. That’s because you typically cannot get out of a severance agreement that you knowingly and voluntarily entered.
Still, even if you’ve already signed an agreement, you should talk with a lawyer. That’s because, in some circumstances, severance agreements (or parts of them) can be found invalid. As it turns out, some legal claims are more difficult to waive than others.
Take age discrimination claims. A 1990 law called the Older Workers Benefits Protection Act requires employers to include specific provisions in their severance agreements when employees waive claims under the federal Age Discrimination in Employment Act (ADEA). If the employer slips up, even in the slightest, the employee can still sue for age discrimination.
So, what are these requirements? Here’s a list of some key ones:
1. The waiver must be written “in a manner calculated to be understood” by you and your coworkers. Which means no jargon, legalese, or run-on sentences.
2. The waiver must mention the “Age Discrimination in Employment Act” by name.
3. The waiver must advise you in writing to speak with an attorney before signing the agreement.
4. The company must provide you at least 21 days to consider whether to sign the agreement. If you were terminated as part of a layoff of two or more employees or an “exit incentive” program (e.g. a buyout program) of two or more employees, the company must give you 45 days to consider the severance agreement.
5. The waiver of your claim must be given in exchange for “consideration in addition to anything of value to which [you] already [are] entitled.” Basically, the company must provide you some additional money or benefit in exchange for the waiver of your age discrimination claim. Often, this requirement is met by the severance payment. However, some companies have severance plans, under which employees receive severance as a matter of course. In these cases, the company may not be able to obtain a valid waiver of the ADEA claim if they don’t offer more than the standard severance.
6. You are entitled to revoke the agreement seven days after signing. So, let’s say you signed four days ago, and you decide that you want to sue for age discrimination. Well, under the ADEA, you can revoke the severance agreement and go to court.
7. If the company terminated you as part of a reduction in force, a buyout program, or some other termination program, the company typically must inform you of “any class, unit, or group of individuals covered by such program,” the “eligibility factors” for the program, and any “time limits applicable” to the program. The company must also provide you with some demographic information about the termination or buyout program. Specifically, the employer must provide:
a. “the job titles and ages of all individuals eligible who were terminated”
b. “the ages of all individuals in the same job classification or organizational unit who are not eligible or selected for the program.”
If your company failed to comply with any of these requirements, you may be able to file an age discrimination claim despite having signed a severance agreement. But these requirements are tricky and nuanced. So, before taking any legal action, you should speak with an employment discrimination attorney.
Finally, it’s important to remember that the ADEA only protects workers who are older than forty and are employed by employers with at least twenty employees. (It also applies to workers, forty years or older, who work at certain other entities, including the local, state, or federal governments). So, for example, if you’re thirty-nine years old, you can’t sue for age discrimination under the ADEA, and your severance agreement will not have to meet the strict requirements discussed above. Still, the median age of the U.S. labor force is forty-two, so many workers are entitled to the full benefits of the ADEA, including its requirements for severance agreements.