12/18/07
A federal district court in Minnesota recently found that a release given to laid off employees may be invalid under the Older Worker Benefits Protection Act ("OWPBA"), thereby allowing an age discrimination class-action lawsuit to proceed.
In Peterson v. Seagate US LLC, the Company gave laid off workers severance benefits conditioned on the signing of a release. Two of the terminated employees who did not sign the release sued the Company, and subsequently joined nineteen additional plaintiffs who actually signed the release. The plaintiffs argued that the release's purported waiver of age discrimination claims was invalid because, among other reasons, it failed to properly identify all employees and decisional units subject to the lay off, and the Company asked employees to sign it immediately without allowing an opportunity to consult with an attorney, all required under the OWBPA. In assessing whether the release complied with the OWBPA, the court noted that employers must strictly adhere to the OWBPA's provisions, and that substantial compliance would be insufficient to secure a release of claims. Thus, the court determined that the plaintiffs' had sufficiently alleged that the release may be invalid under the OWBPA, and that the plaintiffs who signed the release may have done so under duress.
This decision reinforces the need for properly drafted OWBPA waivers and careful management of the process once an employer distributes the releases to the workforce. Additionally, if a release provides employees with 45 days to consider their options and advises them that they should consult with an attorney prior to signing, employers should not encourage or suggest that the employees immediately sign the waivers.
