Purpose & Benefits of the Older Workers Benefit Protection Act

When employees are terminated, they are often asked to sign a release of legal claims against the employer in exchange for some payout. This is usually referred to as “severance.” One of the problems inherent in signing a release is that the employee usually has no idea whether or not his termination was done legally.

To ensure that employees over 40 are informed about their rights before waiving potential claims, Congress amended The Age Discrimination in Employment Act (ADEA) in the 1990s to add The Older Workers Benefit Protection Act (OWBPA). The OWBPA adds a variety of requirements that strengthen protections for employees over 40.

Role of The Older Workers Benefit Protection Act (OWBPA)

One of the most underutilized parts of the OWBPA is a provision stating that where an employee over 40 is terminated at the same time as one or more other employees, the employee over 40 is entitled to certain information about the termination of the other employees, before a release of ADEA claims can be “knowing and voluntary,” meaning valid and enforceable.

The goal of this provision is to ensure that the employee will have a solid foundation to determine whether his age might have played a part in his termination.

This information entitlement applies whenever an employee is terminated as part of some company decision or“program” that results in two or more employees being fired—usually, a mass lay off or corporate reorganization.

To invoke the rule, an employee need not use special buzz words or a particular characterization of the termination; rather, if two or more employees are fired, and the reason is unrelated to performance or other poor conduct, the rule applies.

Severance Agreements for Employees Over 40

Employees over 40 are entitled to information regarding the employees who were potentially subject to termination, and those actually terminated. Specifically, the terminated employees are entitled to:

  • documentation with the “class, unit, or group” of individuals subject to such workforce reduction, and any eligibility factors for such reduction;
  • the group of employees who were considered eligible for employment under the company’s reduction;
  • the job titles and ages of all employees eligible and/or selected for the reduction; and
  • the ages of all employees in the same job classification or organizational unit who were not eligible or selected for the reduction. 29 C.F.R. 1625.22.

Typically, these disclosures will take the form of a chart provided to the employee, with a breakdown of the above-referenced information. For example: suppose Joe is 50 years old, and his Employer “reorganizes,” firing Joe along with at least one other employee.

Employer gives Joe the opportunity to receive some payout in exchange for releasing his claims for age discrimination against Employer. Employer must provide Joe the above-referenced information so Joe can determine if he believes his age was a motivating factor in his termination.

If Joe sees that the other terminated employees are above 50 years old, and those eligible but not fired are in their 20’s or 30’s, Joe can reasonably infer his age was a motivating factor in his termination. In turn, this may influence Joe’s decision to waive his claims for age discrimination.

Understanding the Older Workers Benefit Protection Act

This information is useful even if an employee does not believe he was fired because of his age, but suspects he may have been fired for another improper purpose. Suppose Joe made a complaint to Human Resources, and three weeks later he is fired.

While Joe suspects his termination was in retaliation for his HR complaint, his employer claims it was simply part of a broader layoff. If the employer’s proposed severance agreement includes a waiver of ADEA claims, Joe should insist on the information about the other fired employees, which will allow him to determine whether he fits within the group and rationale for being let go.

For example, if the information indicates that the employer is downsizing the engineering department, but Joe works in the marketing department, this indicates that the termination may have been retaliatory and his employer was looking for a credible-sounding explanation to get rid of him.

Contact Dhillon Law Group for Employee Friendly Guidance

Many employers are not aware that they must provide these disclosures under the OWBPA. This reality can give employees a potential advantage in arguing age discrimination, particularly when the employers have already established the purported reason for termination and it is inconsistent with the later-disclosed information.

If you are an employee over 40, lost your job as part of some reorganization or layoff, and are being asked to waive your right to sue for age discrimination under the ADEA,

Now you know the purpose & benefits of the older workers benefit protection act, this will help you understand your employment terms & conditions better. You should seek competent employment law counsel / litigation law firm California for advice on these matters. Our attorneys at the Dhillon Law Group are happy to speak with you about these issues.

Dante Quilici is an associate who handles employment litigation and counseling at Dhillon Law Group.