Settlement & Resolution· 12 min read

Severance Agreements Under the OWBPA: What Makes a Release of Age Claims Enforceable

A severance agreement that includes a release of ADEA claims is only enforceable if it satisfies specific, non-waivable statutory requirements. Congress established these requirements in the Older Workers Benefit Protection Act (OWBPA) precisely because it recognized that workers over 40 were being pressured into signing away valuable legal rights under circumstances that didn't allow for meaningful choice.

The OWBPA Requirements

To be enforceable, a waiver of ADEA claims must: (1) be written in plain language the individual can understand; (2) specifically refer to rights under the ADEA; (3) not waive rights arising after the date the waiver is signed; (4) be in exchange for consideration beyond what the employee is already entitled to; (5) advise the employee in writing to consult an attorney; (6) give the employee at least 21 days to consider the agreement; and (7) give the employee 7 days to revoke after signing. All seven requirements must be satisfied. Courts don't apply a totality-of-the-circumstances analysis or excuse technical deficiencies. Each element is mandatory.

The Group Termination Requirement

When a worker is terminated as part of a group layoff — a reduction in force involving multiple employees — additional requirements apply. The employer must give the employee 45 days (not 21) to consider the agreement, and must provide written disclosure of: the job titles and ages of all employees selected for termination, and the job titles and ages of all employees in the same decisional unit who were not selected. This disclosure requirement exists to allow the terminated employee to evaluate whether age played a role in the selection process. Employers who conduct mass layoffs and fail to provide the required information have not made a valid OWBPA waiver, even if the agreement says all the right things on its face.

The Revocation Period

The 7-day revocation period cannot be shortened or waived by the employee, even if the employee requests it. An agreement that purports to waive the right to revoke, or that shortens the revocation period by agreement, is not enforceable as to the ADEA release. The money paid during the revocation period doesn't need to be returned if the employee revokes — the revocation is of the release, not the consideration, unless the agreement specifically provides otherwise and a court finds that provision enforceable. Workers who sign severance agreements and later learn they may have had viable ADEA claims should immediately review whether the OWBPA requirements were met. If any required element is missing, the ADEA release may be unenforceable regardless of what was signed.

What a Valid Waiver Doesn't Cover

A valid OWBPA waiver covers ADEA claims that arose before signing. It does not — and cannot — waive the right to file a charge with the EEOC, the right to participate in an EEOC investigation, or the right to challenge the validity of the waiver itself. Workers who signed a severance agreement can still file an EEOC charge; they simply may not be able to recover individual damages if the release is found valid.

Key takeaways

The OWBPA Requirements
The Group Termination Requirement
The Revocation Period
What a Valid Waiver Doesn't Cover

Citations

Older Workers Benefit Protection Act, 29 U.S.C. § 626(f) — Cited authority
Oubre v. Entergy Operations, Inc., 522 U.S. 422 (1998) — Cited authority
29 C.F.R. § 1625.22 — Cited authority

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