Benefits protection

OWBPA regulations prohibit age discrimination when employers are providing fringe benefits, including health insurance, life insurance, retirement benefits, pensions and disability benefits. The law does allow employers to reduce the benefits that are offered to older workers if doing so is justified by substantial cost considerations. In most cases, employers are required to provide equal benefits to both younger and older workers. Employers may meet this requirement by spending equal amounts on the benefits that are offered to both groups even if doing so results in older workers receiving less.

In some situations, employers are allowed to offer lesser benefits to older employees if they provide them with added benefits that make up the difference. There are different rules for each type of fringe benefit. Detailed information may be found on the website of the Equal Employment Opportunity Commission.

Waiver rules

OWBPA regulations require employers to follow certain safeguards and use certain language when they ask older workers to waive their rights to sue the companies. In these waivers, workers agree not to take any legal action against the employer. In return for the waivers, the employers then offer the employees incentives to resign voluntarily. An incentive may be a severance package that is more than the company’s standard policy.

Waivers in exchange for larger severance packages were quite popular with large corporations in the early 1990s because it helped the companies to cut their payroll costs. Since older workers often have higher salaries and more benefit costs than younger workers, many staff-cutting efforts were geared towards eliminating older workers. Since targeting older workers constitutes illegal discrimination based on age, it was common for companies to offer inducements to the workers to waive their rights to sue.

The OWBPA mandates that older workers are allowed a minimum of 21 days to make decisions about whether or not they want to sign waivers that have been presented to them individually. Waivers that are presented to groups result in each person having 45 days to decide. When a person does sign a waiver, the law allows him or her to revoke it within seven days of signing.

Restrictions on waivers

The Older Workers Benefit Protection Act places a number of key restrictions on agreements for people not to sue. The waiver must be written in a way that an average person who is eligible for the program can read and understand it. It may not be used to cover any claims or rights that a person later discovers he or she has after signing, and it must specifically state that it covers the worker’s rights under the ADEA. The employer must offer something of value to the worker in exchange for his or her signature, and it must be above what is already owed or what is standard for the company to give all workers. The employer must also advise people in writing that they have the right to talk to an attorney before they sign.

When offers are being made to groups of employees, the employer must also provide written information about how the group of employees is defined, the job titles and ages of everyone who is being made the offer and the ages of all of the workers who have the same job classification who are not receiving the offer.

Employers are not allowed to skirt any of these requirements. Waivers that do not comply will be disregarded by the courts. The Supreme Court of the United States has held that employees who sign deficient waivers are allowed to sue for illegal discrimination and also do not have to return any severance pay that he or she received.

Negotiating a better deal

If an employer offers you the ability to participate in a program to reduce staff, the OWBPA offers added legal protections. You are allowed to negotiate the terms of your departure. Since the offer means that your employer wants you to leave and is worried that you might sue, you can make a counteroffer without worrying.

You might take a couple of weeks to think about the offer and then approach your employer and agree to resign if your severance pay is doubled. If there is a group of employees who have been made an offer, it may be even likelier to succeed when the negotiating is done on behalf of the group.

All decisions should be documented in writing, including your decision about whether or not you are agreeing to sign the waiver. It is important for you to keep a copy of the letter as well as copies of all of the documents your employer has given you about the staff-reduction program. If you decide not to sign the waiver and are then dismissed, you may be able to challenge your termination on the basis of illegal age discrimination.

What to do

If your rights have been violated under the Older Workers Benefit Protection Act, you may file a charge with the EEOC. The potential monetary damages will be limited to back pay, attorneys’ fees and court costs. If the violation was willful, you may also be able to recover an additional amount that is equal to your backpay amount. If your complaint to the EEOC is not satisfactorily resolved, you may be able to file a lawsuit. Talk to the employment attorneys at Swartz Swidler to learn more about your rights.