Though workers are paid compensation to sign form release agreements barring future lawsuits, companies should be wary, particularly in light of a new EEOC rule. The ADEA protects employees older than 40 from discrimination in employment based on their age. The termination agreement did not comply with all of these requirements, therefore the employer did not obtain the protection from litigation it sought, though the terminated employee was able to keep the compensation. In light of this case, the EEOC issued a new rule stating that no waiver agreement of the ADEA may impose conditions or penalties that adversely affect a person's right to challenge the agreement. Thus, forfeiture clauses, indemnity clauses or similar provisions are questionable, if not invalid.
Many employers reuse old form release agreements in situations involving terminations.
Because laws change and each situation is different, using an old form release may negate the release's effectiveness. It is wise to consult with labor counsel concerning the validity of any release and whether it will withstand judicial scrutiny if tested. He alleged that the first incident of retaliation occurred when the company reassigned his job duties and reduced his work hours. A few days later, the man's attorney sent a letter accusing the company of retaliation and demanding that the man be reinstated to his old job. The man was fired the next day.