Summary of Federal Laws

 

Employment

 

Equal Employment Opportunity

 

Older Workers Benefit Protection Act of 1990 (OWBPA) (amends the Age Discrimination in Employment Act of 1967)

 

29 U.S.C. § 623

Prohibits discriminatory employee benefit plans.  Numerous requirements exist for early retirement plans.  Waivers of rights under the Age Discrimination in Employment Act (ADEA) must be:

• knowing and voluntary;

• part of a written, clearly understood agreement;

• refer specifically to ADEA rights or claims;

• exclude waiver of claims and rights arising after date of waiver;

• be for consideration (something employee not already entitled to);

• advise individual to consult an attorney;

• provide 21 days for an individual to consider the waiver, 45 days if group offer; and

• allow individual seven days to revoke the waiver.

 

When group layoffs or exit incentive programs are involved, the employee must be given:

• information on the class of employees covered;

• eligibility factors;

• time limits applicable;

• information as to job titles and ages of individuals eligible or selected; and

• ages of individuals in same job classification or unit not selected.

•  

New Regulations:

 

On December 11, 2000, the EEOC issued final regulations under the OWBPA addressing Waivers of Rights and Claims: Tender Back of Consideration.  See 65 Fed. Reg. 77,437 (Dec. 11, 2000), to be codified at 29 C.F.R. § 1625.  The final rule states that the "no tender back" rule must apply regardless of a waiver’s OWBPA facial compliance.  The language in the final rule reads in part as follows:

An individual alleging that a waiver agreement, covenant not to sue, or other equivalent arrangement was not knowing and voluntary under the ADEA is not required to tender back the consideration given for that agreement before filing either a lawsuit or a charge of discrimination with EEOC or any state or local fair employment practices agency acting as an EEOC referral agency for purposes of filing the charge with EEOC.  Retention of consideration does not foreclose a challenge to any waiver agreement, covenant not to sue, or other equivalent arrangement; nor does the retention constitute the ratification of any waiver agreement, covenant not to sue, or other equivalent arrangement.

An employer would be entitled to attorney’s fees if the employee sued in bad faith, but the final rule prohibits the use of provisions allowing the recovery of damages and/or attorney’s fees simply because a suit has been filed.  An employer’s right to restitution, recoupment or setoff is limited to the lesser of the amount of the award to the prevailing plaintiff, or the amount of consideration the employee received for the waiver.

 

The final regulation was adopted instead of a negotiated rule due to the Supreme Court holding in Oubre v. Entergy Operations, Inc., 522 U.S. 422 (1998).  In that decision, the Court held that a release that does not comply with the OWBPA requirements cannot bar an employee’s ADEA claim, even if the employee did not tender back the consideration.

 

The regulation becomes effective January 10, 2001.  See Questions And Answers: Final Regulation on "Tender Back" and Related Issues Concerning ADEA Waivers on the EEOC home page for further information on the rule.

 

Reviewed 11/12/99
Updated 12/28/00 (final regulation on tender back rule)