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The Older Workers Benefit Protection Act amends the ADEA and sets strict conditions an employer must meet for a worker age 40 or older to validly waive age discrimination claims in a severance agreement, including specific consideration, review periods, and a revocation right. Missing a step voids the age waiver.
OWBPA governs both employee benefit plans and releases. Its best-known role is the waiver checklist. For a release of ADEA claims to be knowing and voluntary, it must be written in plain language the employee can understand, specifically reference rights under the Age Discrimination in Employment Act, advise the employee in writing to consult an attorney, exchange consideration beyond anything the employee is already entitled to, and not waive claims arising after the agreement is signed. The employee must get at least 21 days to consider an individual agreement and 7 days after signing to revoke it, and the revocation period cannot be waived or shortened.
In a group termination, such as a mass layoff or an exit incentive program offered to two or more employees, the consideration period extends to 45 days and the employer must attach a disclosure listing the decisional unit, the eligibility factors, and the job titles and ages of the individuals selected and not selected.
The common failure is procedural rather than substantive. An otherwise fair severance package is unenforceable as to age claims if the employer pressured a quick signature, forgot the 7-day revocation window, or provided an incomplete group disclosure. The employee generally keeps the severance money and can still sue on the age claim, so it is worth having counsel review the template and the disclosure before any layoff.
At least 21 days for an individual agreement and 45 days when the release is part of a group termination or exit incentive program offered to two or more employees. The employee also gets 7 days after signing to revoke, and the agreement is not effective until that period ends.
No. The seven-day revocation window cannot be waived or shortened, even at the employee's request. Paying early does not fix it either, because the waiver of age claims simply is not enforceable until the period runs. Build the timing into your severance process rather than treating it as flexible.
The waiver generally fails as to age claims. The employee typically keeps the severance already paid and can still bring the claim, which is why the decisional unit, eligibility factors, and the job titles and ages of those selected and not selected should be reviewed by counsel before distribution.