Advocating For The Rights Of Southern California Employees Since 2007

Is your “over-40” severance agreement properly drafted?

On Behalf of | Jan 22, 2020 | Firm News |

If you have face termination at age 40 or older, your employer may want you to sign a severance agreement. 

Look it over carefully. Severance agreements for older employees must meet specific requirements, or they will be unenforceable in court. 

Reasons for a severance agreement 

A severance agreement is a contract between you, as a departing employee, and your former employer. It ensures that you receive compensation in some form in return for your agreement to abide by certain terms, usually limitations on your post-employment conduct. For example, the employer may want to ensure your confidentiality about sensitive information or prevent you from taking part in a lawsuit against the company. 

Specific language needed 

Clear and simple language is one of the primary requirements of a severance agreement for anyone 40 or older, to the extent that the writer must avoid the use of complex sentences and legal jargon. The Equal Employment and Opportunity Commission requires very specific language that is not “overly broad and misleading.” Otherwise, the agreement will not be enforceable in a court of law. 

Time limits 

Both the Age Discrimination in Employment Act, or ADEA, and the Older Workers Benefit Protection Plan, or OWBP, require a minimum of 21 days for you to review your severance agreement. In fact, if you do sign, your former employer must give you another seven days to reflect on your decision and revoke the agreement if you desire. 

Issues to consider 

Keep in mind that your former employer could face liability if the severance agreement denies you your Title VII rights to file charges or cooperate in any investigation launched against the company. On the other hand, the agreement can put a limit on your ability to recover damages as the result of a discrimination charge. 

Reference to an attorney 

To be enforceable, the severance agreement must also reference the ADEA specifically and recommend that you seek guidance from legal counsel before you sign. An attorney experienced with employment law can review the severance agreement to determine whether it is properly drafted and serves your best interests as a departing employee.