Ferruggia v. Sharp Electronics Corp., 2009 WL 1704262 (D.N.J., June 18, 2009) – The employer in this case terminated the plaintiff as part of a reduction in force (RIF), offering him a severance package on the condition that he execute a general release and waiver of claims. The plaintiff retained an attorney, who negotiated several modifications to the release. The plaintiff thereafter executed the release and received severance of approximately $100,000. He then filed a lawsuit against his employer for age discrimination under the Age Discrimination in Employment Act (ADEA). The employer argued the claim was barred by the release which the plaintiff signed voluntarily after consultation with counsel. Even though the employee signed the release (and collected the money), the district court nonetheless refused to dismiss the ADEA claim because, while the release complied with the Older Workers Benefit Protection Act (OWBPA) in certain regards, it did not contain all of the information required by the OWBPA, and therefore was invalid. For instance, the release did not identify the group of individuals affected by the RIF or the eligibility factors for the group. Further, while the release did list the ages of the employees eligible for the RIF, it did not delineate which of those employees were selected and which were not.
This case underscores the importance of always ensuring total compliance with the many technical details of the OWBPA whenever drafting releases for employees 40 years of age and older.
Note: This article was published in the July 2009 issue of the New Jersey eAuthority.