Laid Off in a Group Layoff? What the 45-Day Disclosure Tells You

Most people flip past the pages stapled to the back of a layoff agreement. They look like a spreadsheet of job titles and numbers. That spreadsheet is the most useful thing in the packet, because it's the company's own record of who it let go and who it kept.

When does an employer have to give you this disclosure?

The federal Age Discrimination in Employment Act (ADEA) protects workers who are at least 40 years old (29 U.S.C. § 631(a)). When an employer asks you to waive ADEA claims as part of "an exit incentive or other employment termination program offered to a group or class of employees," the waiver only counts as knowing and voluntary if the employer meets extra requirements (29 U.S.C. § 626(f)(1)).

A "program" exists when an employer offers severance in exchange for a waiver to two or more employees (29 C.F.R. § 1625.22(f)(1)(iii)(B)). So a layoff doesn't have to be huge. Two people let go at once, both offered severance for a release, can be enough.

In that situation you get:

• At least 45 days to consider the agreement, instead of the usual 21.
• At least 7 days to revoke after you sign. The agreement doesn't take effect until that window closes.
• The written disclosure, given to you at the start of the 45 days.

If you're under 40, the ADEA doesn't apply to you, and this disclosure isn't required for your agreement. Some employers hand it to everyone anyway.

What has to be in the disclosure?

The statute requires the employer to tell you, in writing and in a way "calculated to be understood by the average individual eligible to participate" (29 U.S.C. § 626(f)(1)(H)):

1. Who is covered by the program, the eligibility factors, and any time limits.
2. The job titles and ages of everyone selected for the program.
3. The ages of everyone in the same job classification or organizational unit who was not selected.

The EEOC's regulation adds detail that makes the list harder to fudge (29 C.F.R. § 1625.22(f)(4)):

• Exact ages. Ages must be listed person by person. Age bands broader than one year, like "20-30," don't satisfy the rule.
• The whole unit. If the company picked people from a subset of a unit, it still has to disclose the entire unit.
• Voluntary and involuntary separate. If the program mixes buyouts and layoffs, the information must distinguish between them.
• Running totals. In a layoff that happens in waves, later disclosures should be cumulative, covering everyone in the unit at the start and everyone terminated so far.

What is the "decisional unit," and why does it matter?

The decisional unit is the part of the company the employer chose from: "that portion of the employer's organizational structure from which the employer chose the persons who would be offered consideration for the signing of a waiver and those who would not" (29 C.F.R. § 1625.22(f)(3)(i)(B)).

The regulation gives examples. Cut 10% of one facility, and the facility is the unit. Cut half of one department, and the department is the unit. Cut 10% of all accountants wherever they sit, and every accountant is the unit.

This matters because the comparison only works if the company drew the right box. If you were laid off from a five-person team but the disclosure lists the whole company, or only your team when the cut actually ran across a division, the numbers can hide the pattern you're trying to see.

How do you read the list?

The EEOC explains why the rule exists: the employer must give "enough information about the factors it used in making selections to allow employees who were laid off to determine whether older employees were terminated while younger ones were retained" (EEOC Q&A on severance waivers).

So do that. Take the disclosure and look at:

• Ages selected versus ages kept, by job title. Within your title, were the people let go older than the people kept?
• Your own row. Find your job title. How many people held it, how many were cut, and how old were they?
• The eligibility factors. Does the stated reason (a closed product line, a relocated office) match who actually got picked?
• What's missing. Age ranges instead of exact ages, a unit that seems too small or too big, or no disclosure at all.

A lopsided list isn't proof of discrimination. Companies cut older workers for lawful reasons too, and a small unit can skew by chance. But a pattern of older workers out and younger workers in, in the same job, is the kind of fact that makes a company think twice about the release it's trying to buy.

What if the disclosure is wrong or missing?

The company carries the burden. The party asserting that a waiver is valid has to prove in court that it was knowing and voluntary (29 U.S.C. § 626(f)(3)). A waiver that misses a required element can fail as to age claims.

Under the ADEA, you also aren't required to return your severance before bringing an age discrimination claim, according to the EEOC. That doesn't mean the rest of the agreement goes away, and other claims you released may stay released. A defective age waiver gives you leverage in the negotiation, and the details decide how much.

Can they rush you?

You can sign before the 45 days run out, but only if that choice is yours. The regulation says early signing can't be induced by "fraud, misrepresentation, a threat to withdraw or alter the offer" before the period ends, or by offering better terms to people who sign early (29 C.F.R. § 1625.22(e)(6)). And if the company makes a material change to its final offer, the 45 days start over (29 C.F.R. § 1625.22(e)(4)).

The 7-day revocation period after you sign can't be shortened by agreement (29 C.F.R. § 1625.22(e)(5)).

The takeaway

Forty-five days feels like a long time. Spend the first week on the disclosure. Find your job title, compare the ages of who left and who stayed, and note anything vague or missing. Then read our guides to severance rights over 40 and how much severance to ask for, and bring the list to an employment lawyer before the deadline, not after.

This article is general information about California and federal law as of its date, not legal advice for your situation. Laws change, and the right move depends on your facts.