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Another release bites the dust

HomerThis is the image I have in mind every time an H.R. person, corporate counsel or defense lawyer learns that a Release they drafted fails to comply with the requirements of the Older Workers Benefits Protection Act (“OWBPA”).

OWBPA is an amendment to the Age Discrimination in Employment Act. It mandates that employers provide important information to older workers when they are terminated from employment and asked to release their legal claims. This information helps a terminated older worker do a sniff test for age discrimination. Failure to comply with OWBPA’s standards means that any release of age discrimination claims given by the older worker is invalid and the older worker can sue for age discrimination in court.

A recent case provides a good example of OWBPA at work. One of OWBPA’s requirements is that the employer tell the older worker in writing to consult with a lawyer before signing the employer’s release. In Foster v Mountain Coal Co, LLC, the employer advised that the “[e]mployee may discuss this Agreement with his/her attorney . . . on a confidential basis to the extent necessary to interpret the Agreement.” The Court found this language deficient. While the employer’s language might substantially comply with the statute, substantial compliance is inadequate. The language failed to advise the plaintiff to consult with an attorney prior to signing the agreement; it did not even tell the plaintiff that he “should” or “ought to” consult with an attorney before signing the Agreement. Instead, it provided in passive language and in past tense that the plaintiff  had the “opportunity for consideration and consultation with attorney,” and that the plaintiff may “may discuss the Agreement with his[] attorney.”

The Court held that OWBPA required the employer to affirmatively advise the employee to consult with an attorney, or to affirmatively advise the employee that he “should” or “ought” to consult with an attorney.  The word “advise” means “to give advice to,” “caution,” “warn,” “recommend,” or “inform.” The employer’s language was passive and did not “advise” the plaintiff to do anything. The employer’s language only made the plaintiff aware of a right that he has, but it did not “advise,” him to take advantage of, act on, or take any action regarding that right. The Court ruled that an employee  is not required to infer the right to consult an attorney from language such as “may” or “has had.”

The Foster case is another good lesson for employers; when it comes to OWBPA, don’t screw around with clever language that you hope will trick or lull an older worker into not consulting legal counsel. Just do what the statute tells you to do or your clever use of words might come back to haunt you.

Employers subvert enforcement of the anti-discrimination laws

The federal anti-discrimination laws represent the public policy of the United States to eliminate discrimination from the workplace. Both the EEOC and private parties enforce these laws, with the lion share of enforcement actions taken by private parties who assert claims. Employers know that if they can deter private parties from bringing claims, they will effectively free themselves from the rules and restrictions set forth in the statutes. Employers can deter claims after the fact by retaliating against employees who bring claims, or before the fact, by threatening employees with adverse consequences if they file claims, or by simply lying to employees in employee handbooks, release agreements and other documents by telling them they are prohibited from raising claims. Congress anticipated such maneuvers, however, and expressly prohibited employers from interfering either ex ante or ex post with a current or former employee’s ability to oppose discrimination or participate in proceedings or investigations to enforce the anti-discrimination laws. These protected rights are non-waivable.  One recent case involving Trinity Health Corporation demonstrates how employers can get in legal trouble by attempting to deter or discourage their employees from exercising their non-waivable rights.

Trinity Health Corporation, a national Catholic health care system based in Livonia, Mich., and the parent of St. Joseph Regional Medical Center, a South Bend, Ind.-based health care system, has agreed to settle an employment discrimination lawsuit by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced today.

According to the EEOC’s lawsuit, (3:11-CV-00309-RLM-CAN), filed in U.S. District Court for the Northern District of Indiana, Trinity Health Corporation had a policy since at least February 2008 of denying or delaying severance payments to employees and former employees who signed severance agreements and then filed discrimination charges with the EEOC.

It is unlawful for an employer to punish employees who exercise their right to file a charge of discrimination with the EEOC. Such alleged retaliation violates Title VII of the Civil Rights Act of 1964 as well as the Age Discrimination in Employment Act (ADEA). The EEOC filed suit after first attempting to reach a pre-litigation settlement through its conciliation process.

In the consent decree settling the suit, Trinity agreed that it will not deny or delay severance payments to employees who sign severance agreements and file EEOC charges. Trinity also agreed to pay $25,000 in damages to an employee whose severance pay was withheld after she filed an EEOC charge. Additionally, Trinity agreed that it will not in the future require employees to choose between receiving severance benefits from them or relief through the EEOC process as a condition of receiving their severance payments.

The decree also requires that Trinity post a notice of non-discrimination and non-retaliation at St. Joseph Regional Medical Center and at corporate headquarters, and to distribute that policy to any employee offered a severance agreement throughout the duration of the decree. Trinity will also post an anti-discrimination and anti-retaliation policy on its intranet home page and train its human resources professionals on this policy. The company will report to the EEOC for a two-year period detailing its compliance with the decree.

“We hope that all employers and employees will now understand that even if employees sign severance agreements with their employer, they are still entitled to file a discrimination charge with the EEOC,” said EEOC Indianapolis Regional Attorney Laurie A. Young.

Indianapolis District Director Webster Smith echoed the sentiment, saying “I am pleased that the EEOC charge process resulted in rectifying Trinity’s policy.”



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