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If you are over 40, carefully review your severance agreement

On Behalf of | Dec 30, 2021 | Employee Classification

A severance agreement is a contract between you and your employer that compensates you for certain limitations on your post-employment life.

If you are a departing employee aged 40 or older, the severance agreement must contain specific content in order to be enforceable.

What do EEOC rules say?

The Equal Employment Opportunity Commission (EEOC) states that to be enforceable, a severance agreement for a departing employee aged 40 or older must contain specific language that cannot be ‘overly broad and misleading.” Noncompete or confidentiality provisions are especially vulnerable to the scrutiny of the court.

The ADEA requirements

The Age Discrimination in Employment Act (ADEA) and the Older Workers Benefit Protection Plan (OWBPP) set out timing provisions for this kind of severance agreement. As a departing employee aged 40 or older, you must have a minimum of 21 days in which to review the document before deciding whether or not to sign it. Moreover, you must have an additional seven days after signing to consider revoking the agreement. Enforcement of your severance agreement depends on the use of clear, easy-to-read language free of legal jargon and complex sentences.

A well-drafted agreement

The EEOC states that, for a person aged 40 or older, a severance agreement that is not well-drafted will not stand up in court. Furthermore, an enforceable agreement must contain a reference to the ADEA as well as a recommendation that the recipient consult an attorney before signing. Because of the various governmental requirements, a careful legal review is in order to ensure that a severance agreement is not only in compliance but is in your best interests as a departing employee.

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