Readers of this blog know that we speak about wrongful termination frequently. Indeed, we discussed it in a recent blog post, where we examined what happens after your initial wrongful termination filing.
In this post, we will focus on attempts employers make to avoid liability for such bad acts to stop you from even getting to that stage.
The discriminatory scenario
When times are tough, companies commonly look to older employees when they start looking for jobs to terminate. Why? Because older workers often retain the highest salaries and often have long-term retirement costs after they retire from the company.
If the decision to terminate an employee is based on a protected classification, like age (others include, race, sex, national origin, religion and disability), it could qualify as wrongful termination.
Preferably, the Lake Oswego, Oregon, employer uses a merit-based system, or some system that does not target or disproportionately affect their protected employees. Such systems individually evaluate employees based on neutral bases, like performance, experience, etc.
Some employers look to simply minimize the potential risk of litigation by offering benefits in exchange for a waiver or release of their potential discrimination claims, like those enforced by the Equal Employment Opportunity Commission, like the Age Discrimination in Employment Act, Title VII and the Americans with Disabilities Act (ADA), and the Equal Pay Act.
Are these severance agreements legal?
Maybe. In essence, these contracts release liability and covenant not to sue. But, like any other contract, these contracts must have consideration, meaning you must receive something of value that you are not already entitled to receive in exchange for giving up your rights.
This means it cannot be signed under duress of losing your pension, earned vacation/sick leave or any other benefit to which the employee is entitled.
Usually, this is a lump sum payment tied to a percentage of your salary, though it could also be periodic payments.
Prior to signing the agreement, the EEOC recommends you consult with your attorney to understand what you are giving up, whether sufficient consideration is being offered, and whether this consideration is worth the rights you lose. If you have already signed one, an attorney can analyze it to see if it is enforceable.