Older Worker Benefit Protection Act (OWBPA)

Severance agreements: departing employees 40 years of age and older receive special legal protections when it comes to severance agreements under the Older Worker Benefit Protection Act (OWBPA). The severance document must contain certain language advising the employee of their rights under federal law, and must advise them to take the document to a lawyer to have it reviewed.

The OWBPA requires a mandatory waiting period of at least seven days between the time you originally enter into the agreement and the time when the agreement can be countersigned and the severance paid. This cooling-off period could be used for the employee to go to a lawyer, who might advise them of their opportunity to file a legal claim or threaten a lawsuit instead. The OWBPA also ensures that no employee is coerced or pressured into signing legal waivers of rights under the Age Discrimination in Employment Act (ADEA).

Under the OWBPA, employees eligible for early retirement incentive plans must be provided with complete and accurate information concerning what benefits are available under the plan. If certain conditions of the OWBPA are met, employees may legally sign waivers of their ADEA rights to sue for age discrimination.

There are nine main conditions an employer must provide to employee's in their retirement waiver to comply with the OWBPA:

1. In return for signing the waiver, the employee must be given something more than what he/she is already entitled to by right. If an employer provides a severance package to all employees as a matter of right, then older employees must be given something of value in excess of the severance pay in exchange for their waiver of ADEA rights.
2. The waiver must be part of an agreement between the employer and the employee and must be written in clear and unambiguous language, absent of any jargon or legalese, and “calculated to be understood” by the employee.
3. Prior to the execution of any waiver in connection with an incentive or other employee retirement termination program offered to a group of employees, the employees must be informed in writing about the class, unit, or group covered by the program, any eligibility factors for the program, and any applicable time limits.
4. The employer also must make clear to employees the job titles and ages of all individuals eligible for the program, and the ages of all individuals in the same job classification, or organizational unit who are not eligible or selected for the program.
5. The waiver must specifically refer to rights or claims arising under the ADEA (discrimination because of age in employment or employment benefits).
6. After signing the agreement, the employee has seven days to revoke it, and the agreement is not effective until the end of the seven days.
7. The employee must be advised in writing to consult with a lawyer before signing the agreement.
8. The employer must provide employees with sufficient time to consider the waiver. Before signing the agreement, an employee negotiating a waiver must be given 21 days to consider the matter. If the employee is part of a group of employees being offered an early retirement incentive program or other employment termination program, he/she must be provided 45 days to consider the matter before signing the agreement.
9. An employee may not waive rights or claims which may arise after the date the waiver is executed.

If a waiver becomes invalid, must an employee return the money he originally received in exchange for signing it before he can challenge it in court?  The U.S. Supreme Court in 1998 made a ruling that employers must draft valid waivers. They ruled that if a signed waiver is later found invalid, the employee: 1) can file a discrimination lawsuit; and 2) does not have to give back the money he already received in exchange for signing the waiver. Oubre v. Entergy Operations, 522 U.S. 422.

What does the court consider in determining the validity of a waiver? Courts consider the totality of circumstances based on some of the following but they can look at other factors too: the employee's education and business experience; respective roles of the employer and the employee in deciding the provisions of the waiver; clarity of the agreement; amount of time in which the employee had to study the agreement; whether the employee  was able to consult with legal counsel; and the consideration the employee received for signing the waiver, such as severance.

Age discrimination claims are common when there is a reduction in workforce, particularly of long time employees. The OWBPA also established specific requirements for a "knowing and voluntary" waiver of ADEA claims.

Age Discrimination in Employment Act (ADEA)

The ADEA is federal law regarding age discrimination in the workplace. Many states also have laws prohibiting private persons, organizations and governments from discriminating against people because of age. Under the ADEA and most State laws workers over the age of 40 are protected.


What are some of the ways an employer can discriminate in the workplace? Through job advertisements and recruitment; hiring; firing; pay; compensation; benefits both regular and fringe; apprenticeship programs; serverance packages where they require you to waive your right to sue; and possibly through age preference or age limitations in job notices or advertisements; harassment due to your age; not providing equal benefits; and retaliation after filing a claim or participating in an investigation of age discrimination.


Who investigates age discrimination claims? In Ohio, it can be the EEOC (Equal Employment Opportunity Commission) or the (OCRC) Ohio Civil Rights Commission. An employee who believes they have been discriminated against must file a claim with the EEOC or OCRC within 180 days after the age discriminatroy act occurred. If you don't file within the 180 days, you lose? The investigators have one year to investigate your claims. After 90 days of investigation time you can request a "Right To Sue" letter from the EEOC, hire a private attorney and pursue your age discrimination case in a Court of Common Pleas in the county where the discrimination occurred.


Under Ohio law, a case of age discrimination may be proved either directly or indirectly. An employee "may establish a case of age discrimination directly by presenting evidence, of any nature, to show that an employer more likely than not was motivated by discriminatory intent. If, however, the employee is unable to establish a causal link or nexus between the employer's discriminatory statements or conduct and the act that allegedly violated the employee's rights under the statute, then the employee has not proved age discrimination by the direct method of proof. Without direct proof of discrimination, an employee may establish a claim of age discrimination indirectly by demonstrating he or she (1) was a member of the statutorily protected class, (2) was discharged, (3) was qualified for the position, and (4) was replaced by, or the discharge permitted the retention of, a person of substantially younger age.  If a plaintiff establishes a case of age discrimination, the burden shifts to the employer to provide some legitimate, nondiscriminatory reason for the action taken. If the employer establishes a nondiscriminatory reason, the employee then bears the burden of showing the employer's proffered reason was a pretext for impermissible discrimination. The employee must demonstrate the employer's nondiscriminatory reason was pretextual (a false or weak reason or motive said to hide the actual reason or motive). While age-related comments directed toward the employee may support an inference of age discrimination, isolated, ambiguous, or abstract comments cannot support a finding of age discrimination.


Hostile work environment under the ADEA. The criteria for a claim of hostile work environment under the ADEA is  the emplyee has to be 40 years of age or older; the employee was subjected to harassment either through words or actions based on age; the harassment had the effect of unreasonably interfering with the employee's work performance and creating an objectively intimidating, hostile, or offensive work environment and there exists some basis for liability on the part of the employer. We must keep in mind that a discriminatorily abusive work environment, even one that does not seriously affect employees’ psychological well-being, can and often will detract from employees’ job performance, discourage employees from remaining on the job, or keep them from advancing in their careers. Further, whether harassment is sufficiently severe or pervasive to create an abusive work environment is quintessentially a question of fact. A court must consider all of the relevant circumstances in order to determine whether an environment is hostile or abusive. These circumstances “may include the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a merely offensive utterance; and whether it unreasonably interferes with an employee’s work performance. The effect on the employee’s psychological well-being is, of course, relevant to determining whether the plaintiff actually found the environment abusive. But while psychological harm, like any other relevant factor, may be taken into account, no single factor is required.


If I win what damages can I get?  Compensatory damages such as: back pay for any income you have loss, attorney fees, emotional distress, force employer to re-hire you, lost future wages. Punitive damages which serve to punish an employer for their bad behavior.


Always talk to an attorney before filing a claim with EEOC or OCRC. Always talk to an attorney before you sign a waiver of your rights to sue or a severance package.