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.

When times are hard, older workers get hit the hardest

A recent report from the Government Accountability Office has found that once unemployed, it takes older job seekers significantly longer to find new work. Since the recession started, the median length of unemployment has more than tripled for older workers, increasing at a greater rate than that of younger workers. Prior to the recession, the median duration of unemployment for job seekers age 55 and over was 10 weeks compared with 9 weeks for job seekers aged 25-54. By 2011, the median duration of unemployment for older job seekers had increased to 35 weeks compared with 26 weeks for younger job seekers. In 2007, less than a quarter of unemployed older workers were unemployed for longer than 27 weeks. By 2011, this number had increased to 55 percent. Moreover, by 2011 over one-third of all unemployed older workers had been unemployed for over a year.

The GAO report cites several studies that explain why companies favor younger workers:  Younger workers typically earn less; employers expect younger workers will be healthier and have less of an impact on health care costs; employers expect older workers to “have an issue” working for a younger boss; employers believe older workers’ technical skills are out of date, and that they are likely to retire in the near term.

As they struggle with long-term unemployment, older Americans are doing what they can to get by. An AARP Public Policy Institute report released last month 69 percent of older Americans had slashed expenses; 57 percent of workers had tapped savings; 52 percent delayed medical or dental treatment; 37 percent stopped saving for retirement; 35 percent used credit cards to pay for daily living expenses; and 18 percent took distributions from their retirement accounts.