Age-Wave Waivers: Experiencing the Enforcement Riptide
Your company has fired a worker due to her misconduct. As she is being
terminated, the worker claims the termination is the result of sex
discrimination. Although you are comfortable with your decision to terminate, to
avoid the nuisance of a lawsuit, you agree to pay the employee in exchange for a
release of all claims that she could have against the company, including any
employment discrimination claims. Although the worker is over 40, you do not
believe that there are any Age Discrimination Employment Act (ADEA) issues
implicated. You know that the Older Workers Benefit Protection Act (OWBPA)
imposes certain requirements for age-claim waivers, but meeting those
requirements is, in your opinion, over-kill for the situation. When you consider
the consequences of asking for an invalid age waiver as part of the release of
all claims, you believe that the only risk is that the employee could come back
and file an age claim against your company. You conclude that there is no basis
for an age discrimination claim, so you do not comply with all of OWBPA's
requirements.
Is your decision this simple?
Not according to the court in Commonwealth of Massachusetts v. Bull HN
Information Systems, Inc., an opinion from the U.S. District Court, District of
Massachusetts (May 29, 2001). Among other things, Bull HN involved allegations
by the Equal Employment Opportunity Commission (EEOC) and the Commonwealth of
Massachusetts that General Release and Severance Agreements (Releases) used by
Bull HN from July 1994, through 2000 in connection with a series of
reductions-in-force violated OWBPA and ADEA. In addition, an individual claimant
(Robert F. Madigan) asserted that the release he signed violated the OWBPA and
the ADEA. In partially granting the EEOC's and the Commonwealth of
Massachusetts' Motion for Summary Judgment, the court found "The
Commonwealth and the EEOC are entitled to judgment as a matter of law on their
allegations regarding the unlawful Releases used by Bull from July 1994 -
December 1997." The court granted equitable relief to Madigan solely on the
basis of the invalidity of the waiver he signed when he was laid off. While it
declined to grant monetary damages on the basis of his waiver claim, the court
issued a declaration that the waiver was invalid, ordered that the employer
provide all employees who entered into similar waivers with a copy of the
court's decision, and ordered that the employer provide Madigan with the
information...
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