September 22, 2020

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September 21, 2020

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Colorado Federal Court Walks Back Rejection of ADEA Waiver in RIF Case

In a previous post we discussed Foster v. Mountain Coal Company LLC, the District of Colorado’s decision invalidating a waiver of an employee’s claims against his employer under the Age Discrimination in Employment Act (ADEA) after the employee was terminated in connection with a reduction in force (RIF). The court concluded that under the Older Workers’ Benefit Protection Act (OWBPA), the waiver the employee signed did not adequately “advise” him of his right to consult with an attorney prior to executing a severance agreement because the waiver merely contained passive language in the past tense stating that the employee had been given an “opportunity … for consultation with an attorney.” We now alert you to the Court’s reversal of that decision in response to the employer’s motion for reconsideration.

The plaintiff, Robert Fisk, sued his employer, Mountain Coal Company, LLC, alleging that the waiver he signed releasing claims against the company, including those under ADEA, did not comply with the OWBPA and was not “knowing and voluntary.” The court initially agreed, holding that although the agreement “might arguably substantially comply with the statutory language, substantial compliance is inadequate.” On reconsideration, however, the court accepted the employer’s argument that it had extended the Supreme Court’s 1988 decision in Oubre v. Entergy Operations, Inc. further than Oubre’s reasoning permitted. As the Court explained, in contrast to the agreement Fisk signed, which complied with the OWBPA in all other respects, the agreement in Oubre was “wholly nonconforming,” and thus, Oubre’s rationale “did not address the standard to be used … to determine whether an employer’s attempted compliance meets the requirements of the OWBPA.”

The Court rejected Fisk’s argument that the waiver was insufficient because it was in the past tense and used passive language, calling this “a distinction without a difference” as similar language had been accepted by other courts and the waiver met all of the OWBPA’s other requirements, including providing Fisk with 45 days to consider it. Moreover, the court noted, Fisk had in fact consulted with an attorney regarding his employment with Mountain Coal and determined that holding the waiver invalid under these circumstances would require “placing form entirely over function.”

The court’s decision on reconsideration is better reasoned than the original order strictly construing the ADEA waiver against the employer, given that the OWBA’s language is imprecise and does not easily lend itself to such a rigid, mechanical interpretation. Nevertheless, the statutory requirements for waiving ADEA claims, particularly during a RIF, have proven consistently challenging for employers and will no doubt continue to present obstacles in the future.

©1994-2020 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume IV, Number 223

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