With the current economic downturn, the Equal Employment Opportunity Commission (“EEOC”) recognizes that large numbers of employees have been terminated as part of reductions in force. Often, these employees are presented with a severance agreement. To assist employees and employers with understanding waivers of discrimination claims used in severance agreements, the EEOC has posted a series of questions and answers on its website at http://www.eeoc.gov/policy/docs/qanda_severance-agreements.html.
The EEOC answers those questions that an employee is likely to have if he or she is offered a severance agreement that includes a release of claims. The EEOC’s guidance provides basic information and addresses the requirements for a valid waiver of an age discrimination claim under the Older Workers Benefit Protection Act. The guidance uses several examples based on actual court decisions to help explain what the employee is waiving and when a waiver is effective. The EEOC includes a checklist with tips on what an employee should do before signing a waiver in a severance agreement.
The EEOC’s guidance can also help employers understand the requirements for obtaining effective waivers of discrimination claims. Of course, employers should consult with legal counsel prior to implementing a reduction in force as the EEOC cautions that each waiver agreement should be individualized based on the particular circumstances and applicable state law.