Labor & Employment Law Daily Waiver may not have foreclosed RIF’d worker’s ADEA claims, or closely intertwined race bias claim
Wednesday, August 8, 2018

Waiver may not have foreclosed RIF’d worker’s ADEA claims, or closely intertwined race bias claim

By Lisa Milam, J.D.

An employee laid off in a reduction in force may still be able to pursue his discrimination claim against his former employer despite the release he signed in exchange for a severance package. A question of fact remained as to whether the waiver was knowing and voluntary, given the employee’s contention the RIF came under false pretense. Also, the four corners of the waiver did not appear to comply with the specific statutory requirements for waiving an ADEA claim. While the analysis is more flexible with respect to the waiver of Title VII discrimination claims, a federal court in Mississippi observed that the analysis of the race and age claims were intertwined here, and it felt the best approach was to deny the employer’s summary judgment motion on that cause of action as well (Friar v. Syntron Material Handling, LLC, August 1, 2018, Aycock, S.).

The plaintiff, an African-American male over age 60, had worked for the company (or its predecessor) for 40 years when his job was eliminated in a RIF along with 20 other employees. He executed a release agreement in exchange for nearly $17,000 in severance benefits. But soon after his termination, he spotted an advertisement for his old job. He now contends he was fired due to his race and age, and that the RIF was pretext. And he said he wouldn’t have signed the release had he known his position wasn’t really being eliminated—and that he was discharged for discriminatory reasons.

Waiver of Title VII claims must be “knowing and voluntary” as a matter of black-letter law. Further, the waiver of ADEA claims, pursuant to the Older Workers Benefits Protection Act (OWBPA), requires that specific statutory requirements must be satisfied. One such requirement: in deciding whether to execute the waiver, the employee must be informed of. “(i) any class, unit, or group of individuals covered by such program, any eligibility factors for such program, and any time limits applicable to such program; and (ii) the job titles and ages of all individuals eligible or selected for the program, and the ages of all individuals in the same job classification or organizational unit who are not eligible or selected for the program.” The release in question contained no such reference, and the employer offered no evidence to suggest the information was otherwise made available to the employee. As such, the release didn’t comply with the ADEA’s waiver requirements.

The employer also argued that the employee could not challenge the validity of the release anyhow, because he had kept the severance benefits. But the Supreme Court has already rejected this argument; the ADEA regulations clearly foreclose this defense as well. Therefore, the court denied the employer’s summary judgment motion with respect to the ADEA claim.

As for the race discrimination claim, there is more flexibility there, given that the OWBPA’s waiver strictures don’t apply. Broader factors come into play. Complicating the analysis in this case, the court noted, was that the factual bases for the claims at hand are “intertwined” and the employer, in generally defending the validity of the release, did not raised separate arguments for the two respective claims. Rather than attempt to unravel the two, the court in its discretion denied the summary judgment motion as to the race bias claim as well. However, the court emphasized that it had not held conclusively that the employee did not properly waive either of his claims. For now, though, it allowed him to proceed with both.

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