End of Employment Agreements and Waivers and Releases
It is important that an employer uses an experienced employment lawyer in order to draft and effective and enforceable employee termination and release agreement. These may include provisions for severance pay. They also may be complicated if the employee is over the age of 40 because there are special requirement imposed by the Older Workers Benefits Protection Act (OWBPA).
In Florida, separation and release agreements with terminating employees are valid and enforceable, provided that they are sufficiently clear and supported by adequate consideration.
When offering a separation and release agreement to a terminating employee, employers should consider the following guidelines:
Should an Employer Try To Get A Release In Exchange For Severance Pay?
Special Requirement for Settlement and
Waiver of Age Title Discrimination Claims
The Older Worker Benefits Protection Act amendments to the Age Discrimination in Employment Act (ADEA) provide that employees may waive rights and claims under the ADEA so long as the waiver is “knowing and voluntary.” (29 USC 626(f)) Knowing and voluntary requires that:
1. The waiver be part of a written, clearly understood agreement between the individual and the employer;
2. The waiver refer specifically to rights or claims arising under the ADEA;
3. Rights and claims arising after the date of the execution of the waiver may not be waived;
4. Rights and claims may be waived only in exchange for consideration in addition to anything of value to which the individual already is entitled;
5. The individual is advised in writing to consult with an attorney prior to executing the agreement;
6. A period of 21 days is given for the individual to consider the agreement or if a waiver is in connection with an exit incentive or other employment termination program offered to a group or class, at least 45 days are given within which to consider the agreement; and
a. An employee may sign a release prior to the end of the 21 or 45 day time period, thereby commencing the mandatory 7 day revocation period as long as the employee’s decision to accept such shortening of time is knowing and voluntary and is not induced by the employer through fraud, misrepresentation, a threat to withdraw or alter the offer prior to the expiration of the 21 or 45 day time period, or by providing different terms to employees who sign the release prior to the expiration of such time period. However, if an employee signs a release before the expiration of the 21 or 45 day time period, the employer may expedite the processing of the consideration provided in exchange for the waiver. (29 C.F.R. § 1625.22(e)(6))
b. The 21 or 45 day period runs from the date of the employer’s final offer. Material changes to the final offer restart the running of the 21 or 45 day period; changes made to the final offer that are not material do not restart the running of the 21 or 45 day period. The parties may agree that changes, whether material or immaterial, do not restart the running of the 21 or 45 day period. (29 C.F.R. § 1625.22(e)(4))
7. The waiver provides for at least 7 days in which the employee may revoke the agreement.
a. The 7-day revocation period cannot be shortened by the parties, by agreement or otherwise. (29 C.F.R. § 1625.22(e)(5).
8. If a waiver is executed in connection with an exit incentive or other employment termination program offered to a group or class of employees, the employer must inform the employees in writing about the class, unit, or group covered by the program, any eligibility factors for the program, and any time limits applicable. The employer also must make clear the job titles and ages of all individuals eligible or selected for the program, and the ages of all individuals in the same job classification or organization unit who are not eligible or selected for the program.
Florida employers should be aware that nonstatutory circumstances, such as fraud, duress, or coercion in connection with the execution of the waiver, may render an ADEA waiver not “knowing and voluntary.”
With regard to Florida's public employers (such as cities and counties), Fla. Stat § 215.425 provides that no extra compensation shall be made to any officer, agent, employee, or contractor after the service has been rendered or the contract made
On or after July 1, 2011, a unit of government that enters into a contract or employment agreement, or renewal or renegotiation of an existing contract or employment agreement, that contains a provision for severance pay with an officer, agent, employee, or contractor must include the following provisions in the contract:
1. A requirement that severance pay provided may not exceed an amount greater than 20 weeks of compensation.
2. A prohibition of provision of severance pay when the officer, agent, employee, or contractor has been fired for misconduct, as defined in s. 443.036(29), by the unit of government