Employee Not Required to Return Release Payment

The United States Supreme Court recently ruled that employers must strictly comply with the Older Workers Benefit Protection Act ("OWBPA") to avoid lawsuits under the Age Discrimination in Employment Act ("ADEA"). In Oubre v. Entergy Operations, the plaintiff signed a release agreement that purported to release the employer of all claims arising out of her employment in exchange for severance pay. The release did not comply with the requirements of the OWBPA. After signing the defective release and receiving severance pay, the employee instituted a lawsuit alleging violations of the ADEA. The employee did not return the severance pay prior to instituting the lawsuit.

Despite the fact that the employee did not return the severance pay, the employee could proceed with her ADEA claim, because Congress intended that the OWBPA be strictly observed. Further, the discharged employee often will have spent the monies received and will lack the means to tender the money back to the employer prior to instituting an action.

In light of Oubre, employers should review their release agreements to ensure that the agreements strictly comply with the OWBPA. Unless the agreements incorporate everything that the OWBPA requires, employers may find themselves defending lawsuits that they thought were gone forever.