Severance package with a release of claims for an employee over 40

[Vard]

What is the name of your state (only U.S. law)? NEW JERSEY resident working at a NEW YORK CITY (New York State) location (company is headquartered in New Jersey)

Hello. I have two questions regarding a Severance package with a release of claims for an employee over 40.

I found this link online, and it is the basis of my questions: http://www.limitone-hillenbrand.com/practice-areas/severance-agreements/

1) Item # 2 states: "In addition, if you are 40 or older, under the Older Workers Benefit Protection Act, if your employer wants you to sign a release, it has to give you additional money above and beyond its standard severance package. If you do not get the extra benefits, the release will not be valid."

I have found the Older Workers Benefit Protection Act online and done a keyword search. I can't find anything mentioning "standard severance package". So is the above sentence true? If so, can someone please tell me what section of the OWBPA states this?

2) Assuming 1) is correct, then what is a "standard severance package"? If an employer is asked "Does this Severance package represent your standard severance package" and the reply is "the company is under no obligation to provide severance", is the question being answered? Is the inference that the standard is no severance at all, so therefore this offer is above and beyond?

I would think not. Just because a company is under no obligation to offer severance doesn't mean it doesn't have a standard severance package. I would think that a standard severance package must exist for those times when a company does decide to offer severance. And that their package for employees over 40 must contain more $ than those under 40.

Thank you for reading this.

 

[Vard]

As an additional question, that section states "These plans are governed by the federal ERISA statute which requires your employer to pay you its standard severance benefits whether or not you sign a release. In other words, if the employer is just giving you what it regularly gives terminated employees, you don't have to sign the release.". Is that true?

If it is true, then if the employer says "This is our standard severance package, but we require you to sign the release.", how does an employee force them to give the package without signing the release?

 

[tranquility]

What is the name of your state (only U.S. law)? I have found the Older Workers Benefit Protection Act online and done a keyword search. I can't find anything mentioning "standard severance package". So is the above sentence true? If so, can someone please tell me what section of the OWBPA states this?

I don't know if the act is relevant as much as the theory of contract. Certainly, giving up a known right can be consideration and the contract can be enforceable as the company is giving you money. However, if your *employee* agreement with your employer gives you rights to a severance package (aka a standard severance package) you have a contractual right to that package when you are separated under the rules of the contract. If you are then asked to sign an agreement where the employer does not give you anything more, it might be said the employer has not given anything up and there is no enforceable contract. I suspect that if you look in the law for things like consideration or contract, you might find if the act specifically has such an agreement to give up rights should be treated as a contract on its own outside of standard severance.

2) Assuming 1) is correct, then what is a "standard severance package"? If an employer is asked "Does this Severance package represent your standard severance package" and the reply is "the company is under no obligation to provide severance", is the question being answered? Is the inference that the standard is no severance at all, so therefore this offer is above and beyond?

Yes. If there is no contractual severance required, then I would say there is no standard package.

 

[tranquility]

As an additional question, that section states "These plans are governed by the federal ERISA statute which requires your employer to pay you its standard severance benefits whether or not you sign a release. In other words, if the employer is just giving you what it regularly gives terminated employees, you don't have to sign the release.". Is that true?

If it is true, then if the employer says "This is our standard severance package, but we require you to sign the release.", how does an employee force them to give the package without signing the release?

You don't. If you don't agree with the contract they are proposing, they don't have to fulfill their end by giving you money.

 

[cbg]

1) Item # 2 states: "In addition, if you are 40 or older, under the Older Workers Benefit Protection Act, if your employer wants you to sign a release, it has to give you additional money above and beyond its standard severance package. If you do not get the extra benefits, the release will not be valid."


This is not quite true. The law requires that you receive extra consideration for signing a release. This does not necessarily have to translate into extra money. It has to be something of value, but it could be some other benefit rather than extra money.

 

[Vard]

1) Item # 2 states: "In addition, if you are 40 or older, under the Older Workers Benefit Protection Act, if your employer wants you to sign a release, it has to give you additional money above and beyond its standard severance package. If you do not get the extra benefits, the release will not be valid."


This is not quite true. The law requires that you receive extra consideration for signing a release. This does not necessarily have to translate into extra money. It has to be something of value, but it could be some other benefit rather than extra money.

Thank you, CBG. I see you are a HR Consultant. Would you be able to comment on the other questions I raised at the beginning of this topic? See my first two posts. If you are able to, and would be so kind, that would be greatly appreciated.

 

[cbg]

Assuming 1) is correct, then what is a "standard severance package"? Whatever the employer generally offers. If you are looking for a standard that exists across the board and from company to company, there isn't one.

If an employer is asked "Does this Severance package represent your standard severance package" and the reply is "the company is under no obligation to provide severance", is the question being answered? Yes, although perhaps indirectly.

Is the inference that the standard is no severance at all, so therefore this offer is above and beyond? I would not argue with that interpretation, though I would hesitate to say that is the only possible answer.

The bottom line here is that you are looking for someone who is not affiliated with your employer to answer employer specific question. The best anyone here can give you is a relatively informed guess.

 

[Vard]

The bottom line here is that you are looking for someone who is not affiliated with your employer to answer employer specific question. The best anyone here can give you is a relatively informed guess.

Thanks. I was hoping that perhaps an attorney with extensive experience in severance (either representing employers or employees) and knowledge of the referenced laws might be able to comment.

Since this is a law forum, one would think some employment attorneys might be members.

 

[Zigner]

Thanks. I was hoping that perhaps an attorney with extensive experience in severance (either representing employers or employees) and knowledge of the referenced laws might be able to comment.

Since this is a law forum, one would think some employment attorneys might be members.

Attorneys are the exception here, not the rule:

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[eerelations]

Thanks. I was hoping that perhaps an attorney with extensive experience in severance (either representing employers or employees) and knowledge of the referenced laws might be able to comment.

Since this is a law forum, one would think some employment attorneys might be members.

Wow, dissing someone who probably knows more about employment law than most employment lawyers! How, ummm, outspoken of you!

That said, cbg did state that you are asking questions that are very employer-specific. This means that only your employer can give you precise answers to these questions. Why would you think that an employment lawyer would know more about your employer's severance policies and practices than your employer?

 

[Vard]

Wow, dissing someone who probably knows more about employment law than most employment lawyers! How, ummm, outspoken of you!

That said, cbg did state that you are asking questions that are very employer-specific. This means that only your employer can give you precise answers to these questions. Why would you think that an employment lawyer would know more about your employer's severance policies and practices than your employer?

cbg is incorrect. They are not employer specific. They are anything but employer specific.

And I will respond now to one of his specific replies as an example.

 

[Vard]

1) Item # 2 states: "In addition, if you are 40 or older, under the Older Workers Benefit Protection Act, if your employer wants you to sign a release, it has to give you additional money above and beyond its standard severance package. If you do not get the extra benefits, the release will not be valid."


This is not quite true. The law requires that you receive extra consideration for signing a release. This does not necessarily have to translate into extra money. It has to be something of value, but it could be some other benefit rather than extra money.

cbg, I understand and agree with your observation. But my full question was as follows:

1) Item # 2 states: "In addition, if you are 40 or older, under the Older Workers Benefit Protection Act, if your employer wants you to sign a release, it has to give you additional money above and beyond its standard severance package. If you do not get the extra benefits, the release will not be valid."

I have found the Older Workers Benefit Protection Act online and done a keyword search. I can't find anything mentioning "standard severance package". So is the above sentence true? If so, can someone please tell me what section of the OWBPA states this?

So can you tell me what section of the Older Workers Benefit Protection Act specifically references this requirement?

 

[cbg]

I might have if you had politely asked me earlier in the day. It will now be a cold day in you know where before I give you the time of day.

 

[Chyvan]

They are not employer specific. They are anything but employer specific.

They are.

The concept involves the definition of a contract as opposed to some law that you're looking for. A contract is me giving you something, and in exchange, I get something. It's called consideration.

The first thing you need to establish is the value of the "standard severance package." You do that by asking your employer, "if I don't sign this release of claim, how much money will you give me then"? When the employer says, "nothing," (which is very common) or any value less than you are currently being offered, then you know how much extra you are getting for signing the release of claim. This is why it is an employer specific issue because only they know how much they are willing to give you if you don't sign it.

All that link is trying to say is that if you don't get anything (money) for giving up something (a legal claim), then the contract isn't really a contract because there was no consideration.

Now, on the off chance, if they say they will give you the same amount if you don't sign it, it would be silly to expect more money for signing it. In that case, you just wouldn't sign it at all, and take your money.

 

[eerelations]

OP, I find it very interesting that a lawyer has been monitoring this thread, and instead of responding to your questions, this lawyer has been liking cbg's responses. Do you find this interesting?