Standing Tall Between Your Future And The Judge’s Gavel

Severance packages often include discrimination waivers

On Behalf of | Nov 23, 2022 | Employment Law |

For thousands of employees, they now face severance packages, and more and more employees will face this dilemma over the next 12 to 24 months: should I sign the severance agreement? Whether to sign a severance agreement is a deeply personal and fact-specific question that you should consult with a Randolph, Massachusetts, attorney before making a final decision. Why? Because the severance agreement likely includes discrimination waivers, in addition to many other waivers.

For employees 40 and over

Commonly, when Randolph, Massachusetts, companies are looking to lay off employees, they may target those employees that they believe will voluntarily leave. They assume that this means their older employees who are close to retirement. For the company, it is a win-win scenario because the employees are leaving voluntarily, and the company saves the higher salary, benefits and retirement contributions more senior employees demand.

The problem is that this focus on employees who tend to be 40 and over means the company has likely engaged in age-based employment discrimination. As such, severance agreements routinely have at least an age-based discrimination waiver.

Contract law

The first severance agreement litigation issue is whether it qualifies as an enforceable contract. Primarily, this analysis focuses on whether the employee received consideration for their agreement to waive their right to sue. Commonly, employers will offer benefits that the employee is already entitled to, like sick leave, vacation time, pensions, etc. However, this does not qualify as consideration. The employer must provide some additional compensation for the employee’s agreement to waive their discrimination claims.

Knowing and voluntary

Each federal civil rights law has a requirement that the employee’s waiver must be done knowingly and voluntarily. However, what that means varies based on the specific civil rights statute. In addition, depending on the state, there may be additional state-specific requirements and laws that could invalidate a severance agreement.