The Older Workers Benefit Protection Act (OWBPA) is a federal law that sets guidelines for employers who wish to offer severance packages or early retirement incentives to employees who are 40 years or older. The law ensures that these employees are not discriminated against based on their age and that they are given adequate time to consider the terms of the agreement.
But what happens when an employer wants to settle a dispute with an older worker? Does the OWBPA apply to settlement agreements?
The answer is yes, the OWBPA does apply to settlement agreements. Any agreement that waives an employee`s rights under the Age Discrimination in Employment Act (ADEA) must comply with the OWBPA. This includes settlement agreements that resolve age discrimination claims.
To comply with the OWBPA, settlement agreements must meet certain requirements. For example, the agreement must be in writing and must clearly state the individual`s right to consult with an attorney before signing. The individual must also have at least 21 days to consider the agreement, and an additional 7 days to revoke their acceptance.
Additionally, the agreement must specifically reference the ADEA, and the individual must waive their rights to file a lawsuit or seek administrative relief under the ADEA. The agreement must also be supported by consideration, which is typically some form of payment in exchange for the individual`s agreement to waive their rights.
It`s important for employers to ensure that their settlement agreements comply with the OWBPA. Failing to do so can result in costly legal disputes and potential liability for age discrimination claims. Employers should consult with legal counsel to ensure that their settlement agreements are legally compliant and protective of their interests.
In conclusion, the OWBPA does apply to settlement agreements that waive an individual`s rights under the ADEA. Employers must ensure that their agreements comply with the OWBPA`s requirements to avoid potential legal disputes and liability. By doing so, they can protect their interests and resolve disputes with older workers in a lawful and ethical manner.