In today's litigious environment, it is standard operating procedure to offer employees laid off in corporate reorganizations "severance" pay in exchange for the employees' agreement to release any claims they have against the employer. But don't get tagged the way one employer did when it used this practice. 

According to the United States Supreme Court's recent decision in Howlett V. Holiday Inns,  laid off employees may sue the company for age discrimination and keep the severance they were paid even though they signed agreements releasing all claims! 

The problem was a defective release agreement. Although the agreement mentioned fair employment laws generally, it did not specifically state that age discrimination claims were released. Moreover, the Holiday Inns' release agreement did not contain special language required by the Older Workers Benefit Protection Act (OWBPA). 

In order to obtain the full and complete release of age discrimination claims, the release must satisfy the law's eight requirements, including:
 

(1) the release must be written in a manner that is accessible to the employee signing the release, 

(2) it must specifically refer to the Age Discrimination in Employment Act (ADEA), 

(3) it cannot encompass claims that may arise after the date of signing, 

(4) the employer must provide payment for waiver of the ADEA claim above and beyond that to which the employee is already otherwise entitled, 

(5) the employee must be advised in writing to consult with an attorney, 

(6) the employee must be given at least 21 or 45 days to consider signing the agreement, depending on whether the incentive to accept the payment in exchange for leaving the company is offered to a group, 

(7) the release must allow the employee to rescind the agreement up to seven days after signing, and 

(8) if the release is offered in connection with an exit incentive or group termination program, the employer must provide information relating to the job titles and ages of those eligible or selected for the program and the same information about employees in the same job titles who are not eligible or selected.