Waiver of ADEA Claims in Severance Package Must Satisfy
All Statutory Requirements.
The U.S. Supreme Court has ruled that an employee who receives a severance package in exchange for signing a release of claims under the Age Discrimination in Employment Act (“ADEA”) can both sue the employer and keep the money if the release does not meet the various requirements of the statute, including a period of 21 days to consider the release (45 days if it is part of an exit incentive program) and 7 days after signature to revoke it. (Oubre v. Entergy Ops., Inc., No. 96-1291, Jan. 26, 1998.) The ruling specifically applies only to releases of claims under the ADEA, which is the only federal employment discrimination statute that imposes specific prerequisites for a valid release. The “spin” on the decision varies: management-side lawyers are emphasizing that it applies only to ADEA releases, and plaintiffs’ lawyers are touting the ruling as a “green light” for employees to bring other types of claims they had previously released without having to return the money the employer paid for the release. The court’s decision is clear on one point: when giving a severance package in exchange for a release, the release must be done right.
Cook, Little, Rosenblatt & Manson ALERTS are produced periodically as a service of Cook, Little, Rosenblatt & Manson, p.l.l.c. and are intended to highlight emerging legal issues affecting our clients and friends. It is, of course, no substitute for specific legal advice.
Back to Alerts Topics Listing