On its website, the Equal Employment Opportunity Commission (the “EEOC”) has issued guidance on an employee’s waiver of discrimination claims contained in a severance agreement. As the EEOC points out, an employer’s decision to terminate or lay off certain employees, while retaining others, may lead discharged workers to believe that they were discriminated against based on their age, race, sex, national origin, religion, or disability. To minimize the risk of litigation, many employers offer departing employees money or benefits in exchange for a release (or “waiver”) of liability for all claims connected with the employment relationship, including discrimination claims under the civil rights laws enforced by the (EEOC) — the Age Discrimination in Employment Act (ADEA), Title VII, the Americans with Disabilities Act (ADA), and the Equal Pay Act (EPA). These employees are typically offered severance agreements and asked to sign a waiver at the time of termination. When presented with a severance agreement, many employees wonder if it is legal, and whether the employee should sign it.
The EEOC guidance is intended to answer questions that an employee may have about being offered a severance agreement in exchange for a waiver of actual or potential discrimination claims. The guidance:
— provides basic information about severance agreements;
— explains when a waiver is valid;
–addresses waivers of age discrimination claims that must comply with provisions of the Older Workers Benefit Protection Act (the “OWBPA”); and
–includes a checklist with tips on what an employee should do before signing a waiver in a severance agreement and a sample of an agreement offered to a group of employees giving them the opportunity to resign in exchange for severance benefits.
Although addressed to employees, this guidance would be helpful to any employer thinking about asking an employee to sign a waiver of claims as part of a severance agreement. The guidance is here.