Tuesday, February 21, 2006

Tenth Circuit OWBPA Case Sets More Stringent Requirements for Reductions-in-Force

Boss_button_1According to a recent decision by the Tenth Circuit, employers need to provide more information to employees when they seek to have them waive their rights to bring Age Discrimination in Employment (ADEA) claims after they have been impacted by a reduction-in-force (RIF).

From the Labor and Employment Legal Alert from Dinsmore & Shohl LLP:

The holding by the Tenth Circuit in Kruchowski, et al. v. Weyerhaeuser Co., 423 F.3d 1139 (10th Cir. 2005), breaks new ground in interpreting the Older Worker Benefit Protection Act ("OWBPA") requirements that eligibility factors be provided to employees selected for a reduction-in-force.

In the past, this provision of the Act had generally been understood to mean that the employer was required to explain the eligibility factors for the offered severance program; for example, simply stating that all salaried employees were eligible for the severance program was sufficient to satisfy the OWBPA requirements.

However, in its decision in Weyerhaeuser, the Tenth Circuit interprets this provision of the Act to mean that employees must be informed of the substantive factors that the employer considered in rendering its decision to select certain employees to be laid off as part of a reduction-in-force.

More specifically, the Tenth Circuit found in Weyerhaeuser that:

[W]here an employer changes the scope of the decisional unit midway through a program, and fails to provide adequate information with regard to such, any ADEA releases obtained from employees under these circumstances will be found to be ineffective. The Tenth Circuit reasoned that under such circumstances employees are not provided with the correct information mandated by the strict requirements of the OWBPA. Accordingly, such employees cannot make a knowing and voluntary waiver of their rights.

You can read about the rest of this labor and employment law alert here.

Hat Tip:  Paul Caron



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