{"id":33069,"date":"2008-03-26T16:35:41","date_gmt":"2008-03-26T21:35:41","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/uncategorized\/effective-releases-in-workforce-reductions.html"},"modified":"2008-03-26T16:35:41","modified_gmt":"2008-03-26T21:35:41","slug":"effective-releases-in-workforce-reductions","status":"publish","type":"corporate","link":"https:\/\/corporate.findlaw.com\/human-resources\/effective-releases-in-workforce-reductions.html","title":{"rendered":"Effective Releases in Workforce Reductions"},"content":{"rendered":"
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The drafting and use of effective releases in workforce reductions continues to be an important part of employers' planning for such events. In 1990, Congress passed the Older Workers Benefit Protection Act ("OWBPA") which contains procedural rules for obtaining effective releases of claims for age discrimination that may arise as a result of a reduction-in-force. The good news for employers in the OWBPA is that careful attention to the Act's rules can ensure that, when a termination program is correctly completed, the employer can move on. Trailing litigation over the workforce reductions either will not occur, or can be defended on the basis of releases provided to separated employees. In its 1998 decision in Oubrey v. Entergy Operations<\/i>, the Supreme Court emphasized that the OWBPA's procedural rules regarding employee releases of age claims will be strictly enforced. If the employer doesn't follow those rules, employees can sign them, accept severance pay and other benefits, yet still sue for age discrimination. Strict compliance with the OWBPA's requirements regarding the contents of releases continues to be the best protection against subsequent claims.<\/p>

A recent decision of the Tenth Circuit Court of Appeals, whose decisions create binding precedent for federal courts in Utah, Bennett v. Coors Brewing Co.<\/i>, offers further guidance on effective reduction-in-force releases. Specifically, the court held that under state law, the plaintiffs' failure to return their severance payments before attacking the releases precluded their state law claims. Their failure to tender back the severance payments constituted a "ratification" of the release signed by the plaintiffs.<\/p>

The release the plaintiffs signed in Coors<\/i> also contained provisions requiring plaintiffs to pay the employer's attorneys' fees incurred in defending legal claims the plaintiffs had waived in their OWBPA releases. The Tenth Circuit ruled that this attorneys' fees provision was enforceable, at least as to the plaintiffs' state law claims. However, the amount of the fee award could be reduced by the district court if it decided an award would be "inequitable and unreasonable."<\/p>

Under the Coors<\/u> decision, in addition to complying with the OWBPA's express procedural requirements, employers should also consider including in their reduction-in-force releases terms stating that the employer is entitled to recover its attorneys' fees in defending claims brought by employees after signing a release.<\/i><\/p><\/div>","protected":false},"excerpt":{"rendered":"

The drafting and use of effective releases in workforce reductions continues to be an important part of employers’ planning for such events. In 1990, Congress passed the Older Workers Benefit Protection Act (“OWBPA”) which contains procedural rules …<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_categories":[6487,6486],"class_list":["post-33069","corporate","type-corporate","status-publish","hentry","corporate_categories-human-resources__employment-laws","corporate_categories-human-resources"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate\/33069","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=33069"}],"wp:term":[{"taxonomy":"corporate_categories","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_categories?post=33069"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}