B. Older Workers Benefit Protection Act

A recent development concerns the enactment of a federal law called the Older Workers Benefit Protection Act. The act is designed to protect older workers from voluntary early retirement programs, written waivers and releases and their effect upon Age Discrimination in Employment (ADEA) claims, and deductions from severance pay and disability benefits to those eligible for retirement. Previously, confusion reigned over the enforceability of releases and waivers signed by older workers. Now, the Older Workers Benefit Protection Act has eliminated much confusion when its provisions are properly followed. The act makes clear that in relation to a firing or resignation of a worker over 40, a company can protect itself from potential violations of ADEA claims by utilizing waivers provided the follow- ing factors are met:

1. The waiver is part of an agreement which specifically states the worker is waiving his/her ADEA rights and is not merely a general release;
2. The agreement containing the waiver does not disclaim any rights or claims arising after the date of its execution;
3. The worker receives value (such as an extra month of severance) in return for signing the agreement;
4. The worker is advised in writing of the right to consult an attorney of his/her choosing before signing the agreement;
5. The worker is advised in writing of his/her right to consider the agreement for a period of 21 days before it is effective; and
6. The worker is given at least seven days following the execution of the agreement to revoke it.

Where employers request the signing of releases or waivers in connection with mass termination programs and large-scale voluntary retirement programs, the act is even more strict. For example, all individuals included in the program must be given at least 45 days to consider the agreement and each employee must also be provided with numerous facts including the class, unit or group of individuals covered by the program, any eligibility factors for such program, time limits applicable to the program, the job titles and ages of all individuals selected for the program and the ages of all individuals not eligible for the program.

TIP: These revised waiver and disclosure requirements make it important that individual and group terminations now be communicated properly to potential ex-employees over 40.

Counsel Comment #106: If your company is considering preparing releases in connection with the firing of any older worker, be sure that the agreement is written in clear and simple language, and unambiguously releases all claims relating to the worker's termination of employment. This will reduce the chances that ill-informed employees can successfully assert they were coerced into signing a waiver, and that such a document should not be enforced because of a lack of negotiation, ambiguity of language in the release, or evidence that the employee had not signed the document voluntarily.

For maximum protection, designate and train select company personnel to assist in termination decisions, review the law and answer older workers' questions in this area.

Voluntary Early Retirement Offers. In view of recent changes in the law, all voluntary early retirement programs must now be scrutinized closely so there is no chance of threat, intimidation or coercion of the worker to whom the benefit is offered. All older employees must now be given sufficient time to consider the options, and receive accurate and complete information regarding benefits.

Don't forget to examine special rules regarding the kinds of "voluntary" benefits that may be offered under the act before contemplating making an offer. Although the federal legislation validates many company developed plans, it must be followed precisely so as to not backfire against employers.

"Overqualified" Job Applicants. Employers should be aware that a refusal to hire overqualified applicants may constitute age discrimination.

Counsel Comment #107: When considering the appli- cation of an experienced older worker, never admit that the reason you are refusing to hire that person (to the benefit of a younger worker) is that the worker was overqualified. Consider carefully all the potential ramifications and speak to experienced counsel before making any decisions or comments to the rejected older applicant to avoid problems.