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EEOC Issues Guidance on Waivers and Severance Agreements

    Client Alerts
  • July 31, 2009

Recognizing that employee reductions and terminations have been an unfortunate result of the current economic downturn, the Equal Employment Opportunity Commission (“EEOC”) issued a new technical assistance document on July 15, 2009.  The document, titled Understanding Waivers of Discrimination Claims in Employee Severance Agreements, is designed to help both employers and employees understand some of the complexities that arise with waivers and severance agreements.

Worth noting is the EEOC’s guidance regarding the Older Worker Benefit Protection Act (“OWBPA”).  OWBPA establishes specific requirements for a release of age discrimination claims by employees age forty or over.  These requirements include a twenty-one day waiting period for the employee to consider the agreement and a seven day period to revoke his or her acceptance.  The EEOC also reiterated its position that signing a severance agreement and accepting payment to waive discrimination claims does not prevent an employee from filing a charge of discrimination with the EEOC or a similar state agency.  This document provides helpful insight as to how the EEOC and the courts will likely review these agreements and how employers can avoid pitfalls when offering these agreements to employees.