EEOC's Tips for Waivers in Severance Agreements
The U.S. Equal Employment Opportunity Commission ha published guidance explaining terminated employees’ rights and obligations when an employer offers severance pay in exchange for a waiver of discrimination claims.
The EEOC says it issued the guidance following a spike in age discrimination complaints and the increased use of severance agreements because of the current wave of layoffs.
The EEOC notes that when examining whether a severance agreement is valid, most courts consider the following circumstances and conditions under which the waiver was signed:
1.Whether it was written in a manner that was clear and specific enough for the employee to understand based on his education and business experience;
2.Whether it was induced by fraud, duress, undue influence, or other improper conduct by the employer;
3.Whether the employee had enough time to read and think about the advantages and disadvantages of the agreement before signing it;
4.Whether the employee consulted with an attorney or was encouraged or discouraged by the employer from doing so;
5.Whether the employee had any input in negotiating the terms of the agreement; and
6.Whether the employer offered the employee consideration (e.g., severance pay, additional benefits) that exceeded what the employee already was entitled to by law or contract and the employee accepted the offered consideration.
