Revoking Severance Offers for 40+ Year Old Employees

June 2017

It’s not uncommon for a severance offer to be made when an employee is terminated. This is often a win-win for everyone involved: the employer obtains a release of potential claims, while the employee gets payments and/or benefits that they would not otherwise be entitled.

One of the first questions legal counsel will ask when drafting a severance offer is whether the employee is 40 years old or older. This is because workers age 40 and over are covered by the Older Workers Benefit Protection Act (OWBPA). Part of the Age Discrimination in Employment Act, the OWBPA sets out a set of specific requirements that must be included in the severance package to obtain an effective release and waiver of age discrimination claims. Among other things, an employee must be given 21 days to consider whether to accept the agreement. Read more.