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The Requirements of Severance Agreement for Workers Over 40

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In employment, change is inevitable; sometimes, that change comes in the form of severance agreements. If you are over 40, you should know a distinct set of rules and considerations when dealing with these agreements. This article takes you through the provisions of severance agreements for workers over 40, providing a comprehensive overview of the legal requirements and your rights in this context.


What Must The Severance Agreement Include?


Severance or separation agreements step into the spotlight after events like layoffs or reductions in force. The premise is simple: your employer offers you severance pay, and you agree to specific conditions in return. These typically encompass not suing your former employer, refraining from enticing their business or employees, and steering clear of competitive activities.


But if you are 40 or older, the federal Age Discrimination in Employment Act (ADEA) and the Older Workers Benefit Protection Act (OWBPA) introduce additional considerations. Your waiver of ADEA rights must be informed and voluntary. That means the agreement must be understandable, explicitly refer to your ADEA rights, not compel you to waive future rights, provide something valuable in exchange for the waiver, advise consulting an attorney, grant ample review time, and allow a revocation period.


Regulations from the U.S. Department of Labor (DOL) add further specifications. The waiver should be in writing, using clear language suitable for your education level, void of complexity and jargon, devoid of deception, and explicitly mentioning ADEA.


And remember, under no circumstances can the agreement force you to waive your right to participate in a case involving the U.S. Equal Employment Opportunity Commission (EEOC).


How Much Time Do I Have To Consider The Agreement?


This is where the clock comes into play. If you are the only employee facing termination, you have at least 21 days to mull over the agreement before signing away your ADEA rights. But if you are not alone, that grace period extends to 45 days.


Note that any significant changes to the agreement will reset the countdown. You can sign early, but it should be a conscious choice. And once you have signed, you are entitled to a 7-day window to revoke the agreement before it becomes enforceable.


Do I Have The Right To An Employment Lawyer?


If your employer is nudging you towards an ADEA rights waiver, you can contact an employment law attorney in California, even though the expenses will be on you. The waiver agreement must inform you of this option and suggest utilizing it. Before appending your signature, it is crucial to establish an attorney-client relationship and seek advice from reputable legal counsel with experience in employment discrimination.


What If I Am Not The Only Person That Is Being Let Go?


If your departure is part of a group, the ADEA introduces some interesting twists. The contemplation period lasts 45 days, providing more time for you and others to assess the situation. Additionally, your employer must share information about those being terminated. 


This data should be clear and understandable and include details about job titles, ages, and eligibility factors for exit programs. This transparency aids your decision-making process, enabling you to gauge whether age played a role in the layoffs.


What Rights Am I Waiving To Receive The Severance Pay?


When you accept severance pay, you often give up certain legal rights you might otherwise have against your former employer. These can include claims related to discrimination, wrongful termination, harassment, and even class action lawsuits.


However, there are rights you can't be coerced into waiving. These include workers' compensation benefits, unemployment insurance benefits, wages you were entitled to, and your ability to file a discrimination claim with the EEOC or engage in a case brought by the Commission. If an agreement demands you relinquish these rights, it's not enforceable.


What Is The Law In California?


In California, the law takes employee protection a step further. While you can waive federal discrimination claim rights, California state law rights persist. This means that certain rights, like those under the California Private Attorney General Act (PAGA), remain untouched even if you sign a waiver. Moreover, California law renders non-compete clauses unenforceable, adding another layer of safeguard for employees.


Navigating the landscape of severance agreements as a worker over 40 involves comprehending a maze of legal stipulations and personal considerations. This journey is a delicate balance from understanding your rights to assessing the fine print. If you are in this situation, remember that legal expertise is available. Do not hesitate to contact a labor law attorney to ensure you make informed decisions that protect your interests.


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