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Does your severance agreement meet the “over-40” criteria?

On Behalf of | Oct 1, 2019 | Wrongful Termination

If you are 40 or older, the severance agreement your former employer provided to you must adhere to certain requirements. Otherwise, it may be unenforceable in court.

Before you sign, ask an attorney to review the document. In fact, the severance agreement must contain a recommendation for you to do just that.

Why a severance agreement?

A severance agreement is usually contained within the body of an employment contract. However, even if there was no such contract when you were hired, the company may offer severance payment as compensation in exchange for your agreement to abide by the limitations they wish to place on your post-employment conduct. Usually, the hope is to control your association with the competition or your ability to participate in litigation against your former employer.

Meeting the requirements

The wording in a severance agreement for a departing employee who is 40 or older must be precise. It must conform to specific language set forth by the Equal Employment Opportunity Commission. The agreement must also comply with the requirements of the Age Discrimination in Employment Act, as well as the Older Workers Benefit Protection Plan. In brief, the wording must be clear and plain. It must avoid the use of legal jargon and complex sentences to avoid any misunderstanding of the terms. As to timing, you, as the over-40 departing employee, must have 21 days in which to consider the agreement. The document must contain a reference to the ADEA, and there must be a recommendation for you to consult an attorney.

On to the review

Employers have subtle ways to terminate older employees. They may cite downsizing or reorganizing departments, for example. What they really want to do is save the money spent on your salary and, at the same time, put younger employees in front of the public. You may find the grass greener down the road, but first, you must have a legal review to ensure that the severance agreement meets the requirements for an over-40 departing employee and that it serves you well.