The short version: If you're 40 or older and your severance agreement waives age discrimination claims, federal law requires it to meet specific rules: plain language, a specific reference to the Age Discrimination in Employment Act (ADEA), advice to consult a lawyer, 21 days to consider it (45 days in a group layoff), and 7 days to revoke after signing. Group layoffs also require written disclosures about who was selected. If the agreement misses a requirement, your waiver of age claims may not be valid.
Turning 40 doesn't just mean reading glasses. It means federal law treats your severance agreement differently. The Older Workers Benefit Protection Act (OWBPA), part of the Age Discrimination in Employment Act, sets minimum rules for any agreement that asks you to waive age discrimination claims (29 U.S.C. § 626(f)).
What the agreement must include
For a waiver of age claims to be "knowing and voluntary," the agreement must at least:
- Be written in plain language that you, or the average person in your position, can understand.
- Specifically refer to the ADEA or to rights and claims under it.
- Not waive claims that arise after you sign.
- Give you something extra, beyond what you're already entitled to receive.
- Advise you in writing to consult a lawyer before signing.
- Give you at least 21 days to consider it, or 45 days if you're part of a group layoff or exit incentive program.
- Give you at least 7 days to revoke after you sign. The agreement doesn't take effect until that period ends.
Group layoffs: the disclosure most people skip
If you were let go as part of a group termination program, the employer must also give you written information at the start of the 45-day period, including:
- Who's covered by the program, and the eligibility factors
- The time limits that apply
- The job titles and ages of everyone selected for the program
- The ages of everyone in the same job classification or unit who was not selected
Read that list carefully. If the people let go skew older and the people kept skew younger, that's information worth showing an employment lawyer.
What if the employer gets it wrong?
If the agreement doesn't meet these requirements, your waiver of age discrimination claims may be invalid. And under U.S. Supreme Court precedent, you generally don't have to give the severance money back before challenging a defective age waiver (Oubre v. Entergy Operations, Inc., 522 U.S. 422 (1998)).
That doesn't make the rest of the agreement disappear, and the details matter. But a defective waiver can change your leverage in a negotiation significantly.
California adds its own protections
California's Fair Employment and Housing Act also prohibits age discrimination against workers 40 and older. And regardless of age, California requires an employer offering a separation agreement to tell you that you have the right to consult a lawyer and give you at least five business days to do so (Gov. Code § 12964.5(b)(4)).
Use the time
The 21 or 45 days isn't a waiting period. It's a window to find out whether the offer matches what you're giving up. If age played a role in your termination, the answer is often no.
Have a severance offer on the table?
Talk to us before you sign. Tell us what happened, and we'll help you figure out whether there's room to negotiate.
Get help nowThis 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.