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June 21, 2001
EEOC Wins on Severance Waivers
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U.S. Equal Employment Opportunity Commission has won a lawsuit in which it accused a Massachusetts employer of engaging in age discrimination by forcing workers to sign unlawful severance waivers.

The employer, Bull HN Information Systems of Billerica, Mass., underwent job reductions and forced affected workers to sign a severance plan that discriminated against older ones by requiring them to sign waivers of their right to file complaints with the EEOC as a condition of obtaining benefits, the EEOC said.

The suit further charged that Bull's severance plan failed to meet the requirements of the ADEA, as amended by the Older Workers Benefit Protection Act of 1990, by violating statutory information requirements and not allowing employees sufficient time to consider the terms of the agreement, among other things.

An ADEA waiver, or release, is an agreement between an employer and employee in which the employee gives up the right to pursue an age discrimination claim against the employer in exchange for severance or early retirement benefits or something else of value. Employees are often asked to sign waivers in connection with layoffs.

Under Title II of the Older Workers Benefit Protection Act of 1990, which amended the ADEA, Congress decided to permit these waivers, but set out a series of specific requirements with which waivers must comply to be valid. Although employers may ask for waivers, they must also comply with the ADEA requirements to ensure that the process is fair.

"Older employees who are asked to sign waiver agreements have specific statutory rights under the Older Workers Benefit Protection Act," said Katherine Bissell, regional attorney of EEOC's New York District Office, which filed the suit. "Among other things, these provisions include the unequivocal right of employees to bring claims to the EEOC, which was a key issue in this case."

The U.S. District Court of Massachusetts granted a motion for summary judgment against Bull HN, which serves as the North American headquarters of Bull Infrastructure & Systems, an international information technology company with over 18,000 employees in nearly 100 countries in North and South America, Europe, Africa, and Asia.

"Unlawful waivers that strip older workers of their rights under the ADEA will be pursued by the EEOC to the fullest extent of the law," said Commission Chairwoman Ida L. Castro. "Employers will be well served to ensure that staff reductions comply with civil rights protections."

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