Perhaps you are 45 years old, and you are leaving a company where you worked as a member of senior management.
Your employer must draft the severance agreement properly, and there are special requirements for employees like you who are age 40 and older. Do you have questions about terms and the validity of the agreement overall?
About severance agreements
A severance agreement is a contract between a departing employee and his or her employer. The agreement sets out the compensation the employee will receive. In exchange, the person leaving the company must agree to abide by certain conditions. For example, if there is a class-action lawsuit in progress against the employer, the severance agreement may stipulate that in return for the monetary compensation, you forego joining the lawsuit.
ADEA requirements
The structure of severance agreements for people over 40 must comply with provisions of the Age Discrimination in Employment Act and the Older Workers Benefit Protection Plan. One of the main requirements in both the ADEA and OWBP is that you must have a minimum of 21 days in which to consider the terms of the severance agreement. Furthermore, after signing, there must be a period of seven days during which you may revoke the agreement if you have reservations and change your mind about accepting it.
The easy-to-read agreement
Many severance agreements contain fine print, “boilerplate” legalese that the departing employee may find largely incomprehensible. Severance agreements for those over 40 must contain plain, understandable language. The writer should avoid legal jargon and complex sentences. In addition, the agreement must contain references to the ADEA; otherwise, it will be unenforceable.
Further requirements
The contract that you receive for review must not mislead you in any way. It must not exaggerate either the benefits the company offers or the limitations the company wishes to impose on you. Finally, the agreement must be in writing, and it must advise you to seek legal counsel, which is a very good idea, especially when you have questions about the terms and overall validity of your severance agreement.