Age-Wave Waivers: Experiencing the Enforcement Riptide

Author:Ms Madonna McGwin
Profession:Holland & Knight LLP

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


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


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