March 2, 2021

Volume XI, Number 61

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March 02, 2021

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March 01, 2021

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EEOC Issues Opinion Letter on Older Workers Benefit Protection Act Disclosure Requirements for Non-U.S. Employees

On January 14, 2021, the U.S. Equal Employment Opportunity Commission (EEOC) issued “Opinion Letter: Older Worker Benefit Protection Act,” which clarifies that United States employers need not include non-U.S. citizen employees working outside of the United States as part of a “decisional unit” in the disclosure schedules attendant to waivers of age claims covered by the Older Workers Benefits Protection Act (OWBPA). This formal Opinion Letter represents the official position of the EEOC and provides a defense for employers who rely on its terms. 29 C.F.R. §§ 1626.21.

Disclosure schedules are hallmarks of the OWBPA, an amendment to the Age Discrimination in Employment Act (ADEA) that imposes specific requirements for waivers of federal age discrimination claims by workers age 40 or older in order for such waivers to be “knowing and voluntary.” 29 U.S.C. § 626(f). When a waiver is part of a group termination or exit incentive program, employers must provide employees with a description of the “decisional unit” — the class, unit or group of individuals covered by the program — as well as the eligibility factors for inclusion in the program and the job titles and ages of all individuals within the decisional unit who were eligible for or selected for the program and those within the decisional unit who were not. Id. §§ 621(f)(1)(H)(i), (ii); 29 C.F.R. § 1625.22(f)(3)(i)(B). Thus, appropriately defining a “decisional unit” — the group of employees covered by the program — is critical to preparing adequate waivers of age discrimination claims under U.S. federal law.

The Opinion Letter clarifies a long-standing ambiguity as to whether employees who are not U.S. citizens and working outside of the United States should be included in the description of the “decisional unit.” The EEOC concluded that such individuals need not be included, and in fact indicated that the inclusion of these workers may create some confusion to the U.S. employees selected for the group termination program, thereby implicating the enforceability of the waiver of ADEA claims obtained from such employees. The EEOC began its analysis by noting that the ADEA’s definition of “employee” is limited to those individuals working within the United States, regardless of citizenship status, and to U.S. citizens working abroad for American employers (or for foreign businesses controlled by American employers). Applying this term to the ADEA and OWBPA regulations limits the employees that are required to be included in the “decisional unit” outlined in a disclosure. The EEOC further noted that the inclusion of workers who were not employees covered by the ADEA in the disclosure may undermine covered employees’ ability to evaluate an exit incentive or termination program and its accompanying waiver.

In reaching this conclusion, the EEOC recognizes the layered legal landscape that multinational employers must navigate. The Opinion Letter notes that the legal requirements of other jurisdictions may require the employer to consider different eligibility factors and provide for different types of benefits upon termination of employment. As such, the EEOC reasons, these workers abroad would not fall within the legal definition of “decisional units” or “programs” under the ADEA and its implementing regulations. The Opinion Letter also acknowledges that the inclusion of employee information in a disclosure schedule may potentially require an employer to violate international data protection obligations, a matter that has grown increasingly complex with the passage of the General Data Protection Regulation (GDPR).

This guidance comes at a crucial time when employers across the globe are contemplating cost-saving efforts, including workforce reductions, to address the COVID-19 pandemic’s continued impact on the economy. 

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© 2020 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.National Law Review, Volume XI, Number 15
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About this Author

Daniel Prokott Employment Attorney Faegre Drinker
Partner

Dan Prokott advises businesses regarding complex workplace matters. He represents employers of all sizes, including multinational public and private companies, established and emerging private businesses, and nonprofit organizations.

Employment Counseling

Dan advises employers on:

  • Hiring practices, including issues related to non-discrimination, non-competition, pre-employment testing, background checks and state law compliance
  • Reviewing and drafting offer-of-employment letters and employee handbooks
  • Preparing executive and sales compensation...
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Kerry C. Zaroogian Employment Attorney Faegre Drinker Biddle & Reath Minneapolis, MN
Associate

Kerry Zaroogian’s focus is presenting clients with pragmatic and business-based solutions to their employment challenges. She has represented clients in a wide array of industries, including financial services, technology, health care, entertainment and luxury retail.

Kerry has significant experience drafting and negotiating employment-related contracts, including employment, consulting, freelance, international assignment, retention and partnership agreements, among others. She brings that same dexterity to exit arrangements, including severance and withdrawal agreements. She also...

612-766-7636
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