February 2010 EEOC PERSPECTIVES ON DISCRIMINATION CLAIM WAIVERS IN SEVERANCE AGREEMENTS In July 2009 the federal Equal Employment Opportunity Commission (EEOC) issued a document entitled “Understanding Waivers of Discrimination Claims in Employee Severance Agreements.” Although written as though addressing employees, there is much for employers to gain from reviewing the document in terms of the EEOC’s perspectives on waivers which perhaps surprisingly is not all negative. The document can be found at http://www.eeoc.gov/ . In the “Search” box, type in the name of the document. The document guides an employee through waivers in a severance agreement. It states, “A waiver in a severance agreement generally is valid when an employee knowingly and voluntarily consents to the waiver.” Under the Older Workers Benefit Protection Act (OWBPA), there are seven factors that must be met for a waiver of age discrimination claims to be effective under it. For other statutes, e.g., Title VII, Title I of the Americans with Disabilities Act (ADA), the Equal Pay Act (EPA), “knowingly and voluntarily” are defined by court decisions (case law) that can vary from statute to statute. If any employee over 40 is terminated and a waiver of claims is sought, it may be well to conform a waiver and release to the requirements of OWBPA with respect to all claims for which waivers are sought. These would include a requirement that the release be paid for and the employee is given time to consult an attorney to review and possibly rescind the agreement to the waiver. From the EEOC’s perspective, which is generally correct, no waiver can limit an employee’s or terminated employee’s right to testify, or participate in an investigation, hearing, or proceeding conducted by the EEOC under the Age Discrimination in Employment Act, Title VII, the ADA, or the EPA. The EEOC also says an employee may file a charge with the EEOC of discrimination during employment or for wrongful termination even if a severance agreement uses broad language to describe the claims an employee is supposed to be releasing or waiving. A waiver of the right to file a claim is invalid, but the waiver of claims of discrimination can be a defense for an employer in the proceeding following the filing of a claim. Any waiver will be invalid if an employer used fraud, undue influence, or other improper conduct to coerce the employee to sign the waiver, or if it contains a material mistake, omission, or misstatement. If a waiver is found to be invalid and money was paid to the employee when the waiver was obtained, the employer may be able to recover the money paid for the waiver at least up to the amount of any award given to the employee based upon the claim brought by the employee.
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