Two Dozen Suggestions for Drafting Separation Agreements and Releases

The Practical Lawyer December 2016

Peter M. Panken and Susan Gross Sholinsky, Members of the Firm, and Nancy L. Gunzenhauser, an Associate, in the Employment, Labor & Workforce Management practice, in the firm's New York office, authored an article in The Practical Lawyer, titled “Two Dozen Suggestions for Drafting Separation Agreements and Releases.”

Following is an excerpt:

It should be noted that the general rule is that a release is valid if it is "knowing, voluntary and for a valuable consideration." OWBPA has specific rules as to what constitutes a "knowing and voluntary" release, which are reflected in certain of the above language. Again, this additional language is only required for terminees who are 40 years of age or older. This includes: (a) reference to ADEA and Older Workers Benefit Protection Act ("OWBPA") in Section 12 above; (b) Section 20 above; (c) Section 21 above; and (d) Section 22 above. Even if part of a reduction in force, employees under the age of 40 need not be provided with a specific period of time to review a release agreement (although a reasonable period of time, such as 14 days is generally recommended), and they need not be provided with a period of time within which to revoke the agreement.

Additionally, the provisions included in Sections 21 and 24 above need not be included in a release agreement when the termination is an individual termination (i.e., not part of a group termination). The ADEA does, however, require that all individual terminees who are age 40 or over be provided with 21 days to review the release agreement and seven days to revoke same (therefore, section 20 above will need to be re-worded to reflect (a) this different review period and (b) that an OWBPA exhibit will not be attached to the release agreement).

Finally, and as noted above, several federal, state and local governmental agencies and regulatory authorities have been scrutinizing employers' separation and release agreements, and have recommended that certain provisions be removed or added. Best practice is to review separation agreements on a regular basis, so as to ensure compliance with these rules and recommendations.

See below to download the full article in PDF format, which has been reprinted from the December 2016 issue of ALI CLE’s The Practical Lawyer.