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Does your severance agreement hold up to ADEA standards?

On Behalf of | Aug 31, 2019 | Employment Law |

Perhaps the company you work for is letting you go after several years. Naturally, this is distressing. You had recently moved onto the executive floor and, at the age of 48, you are not getting any younger.

When you joined the company as a sales associate, there was no employment contract. However, you now have a severance agreement to look over. Does it meet the requirements for departing employees aged 40 and older?

Severance agreement basics

A severance agreement is a contract between employer and departing employee that addresses compensation for the latter. If there was no employment contract to begin with, as in your case, the company is under no obligation to pay severance, and you are not required to sign a severance agreement. However, in providing this document, the company is offering you compensation in exchange for your agreeing to certain limitations in your post-employment life. For example, the company may want to ensure that you will not divulge trade secrets to a competitor or file a discrimination lawsuit if there is a possibility of your doing so.


The Equal Employment Opportunity Commission is particular about the drafting of a severance agreement. It must contain specific language that is in no way “overly broad or misleading” or the agreement will not be enforceable in court. For instance, the language used in noncompete, nondisparagement or confidentiality provisions will undergo close scrutiny.

Severance agreements for older employees

There are special severance agreement requirements for departing employees aged 40 and older. To begin with, the agreement must comply with requirements set forth under the Age Discrimination Employment Act, as well as the Older Workers Benefit Protection Plan. Among these is that the language must be clear and easy to understand with no legal jargon and a minimum of complex sentences. There must also be a reference to the ADEA, and the recipient must have no fewer than 21 days to review the document.

Next steps

Another requirement is that the document contains a recommendation for the recipient to seek legal counsel before signing. When you follow this advice, an attorney can review the severance agreement and either confirm that it meets the requirements to which you are entitled as an over 40 departing employee or make the necessary changes.