Requirements for a Valid Waiver Under the Age Discrimination in Employment Act (“ADEA”)

Many people wonder why severance agreements often advise the employee “to consult with an attorney before signing this agreement.” Employers don’t include this language out of the kindness of their heart or out of concern for the employee, but rather because it’s mandated by the Age Discrimination in Employment Act (“ADEA”) – meaning that this language is only required in agreements where the employee is waiving any rights she or he might have relating to discrimination on the basis of age. In fact, this is not the only requirement for an age discrimination waiver to be valid and enforceable.

In order for employees to waive their rights under the ADEA, a written waiver must meet special requirements that do not apply to other employment discrimination statutes. Embodied in the Older Workers Benefit Protection Act (“OWBPA”), the requirements are designed to give employees the information and time they need to evaluate whether they have a valid ADEA claim before waiving their rights.

To be valid and enforceable, the waiver must:

1. Be written in “a manner calculated to be understood” by the employee or “the average individual eligible to participate;”
2. Specifically refer to rights or claims arising under the ADEA;
3. Not call for the waiver of rights or claims that arise after the date the waiver is signed;
4. Provide the employee with “consideration in addition to anything of value to which the individual is already entitled;”
5. Advise the employee “in writing to consult with an attorney” prior to signing the waiver;
6. Give the employee twenty-one (21) days to consider the agreement or, in the event of a group termination or exit incentive program, forty-five (45) days; and
7. Give the employee seven (7) days after signing the agreement to revoke the agreement.

Before signing a severance or separation agreement, we always recommend that employees have a New York employment attorney review the agreement to ensure that the employee understands the terms of the agreement and the ramifications of signing it.