Q: Can a one-size-fits-all separation agreement expose a company to risk?

A: Yes, using a uniform separation agreement may be efficient, but it can create legal exposure if not carefully tailored. Below are key considerations that will help employers ensure their separation agreements are legally compliant.

1. Individuals Aged 40-plus Trigger Additional Requirements

If the impacted individual is 40 years or older, the Older Workers Benefit Protection Act of 1990 (“the OWBPA”), which amended the Age Discrimination in Employment Act of 1967, applies.

The OWBPA requires that a waiver be “knowing and voluntary,” which requires, at a minimum:

• Clear, written, plain language
• Geared to the individual’s level of understanding, accounting for their level of comprehension and education
• No technical jargon or long, complex sentences
• No misleading statements or misinformation
• Explicit reference to the Age Discrimination in Employment Act in connection with rights or claims being waived
• No waiver of future rights or claims
• Recommendation to consult with an attorney before executing the agreement
• At least 21 days to consider (or 45 days if a group layoff)
• 7-day revocation period after signing the agreement
• Additional consideration (e.g., something of value) beyond what the individual is already owed

Tips:

• The 7-day revocation period cannot be shortened.
• The employer should pay consideration until after the revocation period expires.
• The individual may sign before the 21 or 45-day...

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