Suppose you have to terminate an employee who is over the age of 40 and you decide to offer that employee a separation agreement.
You already know (right?) that releases for employees over 40 need to comply with the Older Workers Benefit Protection Act. Among the requirements: that you provide those terminated employees with at least 21 days (or 45 days in the case of a reduction in force) to consider the agreement.
But suppose the employee comes back to you and negotiates for some additional severance or some significant change to the agreement and you, as the company, agree to make that change. What happens to the 21 day (or 45 day) period?
Interestingly, the EEOC has addressed this in a little known regulation. Under the EEOC’s view, a “material change” to the agreement restarts the consideration period; thus it’s the employer’s final offer that matters in figuring out when the 21 day (or 45 day) period runs.
The 21 or 45 day period runs from the date of the employer’s final offer. Material changes to the final offer restart the running of the 21 or 45 day period; changes made to the final offer that are not material do not restart the running of the 21 or 45 day period. The parties may agree that changes, whether material or immaterial, do not restart the running of the 21 or 45 day period.
So, note the last sentence: the employer and employee can agree to a shortened period of time.
The result for employers? Consider putting into your agreements a provision that if there have changes to the agreement (material or immaterial), the employee agrees that this does not restart the consideration period.
Otherwise, you may find yourself on the other side of an argument that the release was not OWBPA-compliant.