Not Just Any Release Will Do: Drafting Valid Releases for a Reduction-in-Force
As hopes for a quick economic recovery have sagged, many employers have been left with little choice but to reduce the size of their workforces. In some instances, laid-off employees are being offered severance in exchange for their release of all claims against their employer. Indeed, obtaining such a release is an indispensable component of a well designed severance package. And if a release is properly drafted, it generally does protect the employer from a subsequent lawsuit brought by the departing employee.
Too often though, the details of the release language are an afterthought. Unsuspecting employers, unaware of the applicable legal authorities, recycle old releases on the assumption that a generic release is as effective in a layoff as when a single employee is being discharged. Other employers have at least some awareness that the Older Workers Benefit Protection Act (“OWBPA”) requires additional language in a release in order to obtain a valid waiver of federal age discrimination claims. Yet not all such employers know that OWBPA may impose additional requirements when the release is requested in connection with a layoff.