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Bryan E. Kuhn
Counselor at Law, P.C.
Business & Employment Law Attorney

Severance agreement requirements for older departing employees

In these times of discrimination awareness, employers must take extra care with the documents they provide to their employees.

Among these are severance agreements for departing employees aged 40 or older, which must adhere to EEOC, ADEA and OWBPA requirements.

About the severance agreement

A severance agreement is a contract between an employer and a departing employee. It provides the former worker compensation in some form in exchange for agreeing to certain post-employment limitations.

Specific language requirements

The Equal Employment Opportunity Commission (EEOC) requires that the language in the severance agreement for older employees not be “overly broad and misleading.” The language must be clear, free of legal jargon and complex sentences. The reader must be able to understand that by signing the document, he will waive certain rights. There must be no ambiguity. If the agreement is not well-drafted, it might not be enforceable in court.

Infringement issues

The former employer might also face liability if the agreement infringes upon the former employee’s right to bring a charge of discrimination against the company or to cooperate with this kind of investigation. The employer also risks liability for violating the law regarding the type of language that must appear in a severance agreement for a departing employee aged 40 or older.

Timing provisions

Both the Older Workers Benefit Protection Plan (OWBP) and the Age Discrimination in Employment Act (ADEA) figure into the severance agreement for the 40 and older employees in terms of timing. The recipient of the agreement must have a minimum of 21 days in which to consider it. There must also be a reference to the ADEA in the content along with a recommendation for the departing employee to seek legal guidance before signing.

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