I’ve written before on why you need to settle your workers’ compensation claim with more than just an SI-42. See post here. As I noted in that post, if your settlement includes a release of any and all employment related claims, there are a number of considerations you need to take into account, including the Age Discrimination and Employment Act (“ADEA”), which applies to employees 40 years of age or older. It is important to do this correctly, or you might be getting an unforeseen call about a claim you thought was all wrapped up.
Amongst other things, the ADEA requires that the employer gives the individual up to 21 days in which to consider the agreement, and then another seven days in which to revoke his or her signature. The ADEA also requires an employer to advise the over 40 individual to consult with a lawyer. A full list of the ADEA requirements can be found here.
This issue was brought to my attention in Eric B. Myer’s Employer Handbook, a great blog about employment law issues. For his take on the subject, see his post. In the case he discussed, an employee claimed that she was so stressed when she signed a severance agreement that her signature on the document didn’t reflect a “knowing and voluntary” waiver of claims against the defendant-employer. In that case, the court sided with the employer, and upheld the waiver. However, it would be easy to imagine a scenario in which, if the formal requirements of the ADEA were not satisfied, the court would have gone the other way.
In another Employer Handbook post Eric discusses the intricacies of dealing with issues arising under the Fair Labor Standards Act (“FLSA”). In short, while some courts have found that you cannot fully settle a wage and hour claim without a court’s blessing, there are ways to word your settlement agreement and release so that the employee acknowledges reporting and receipt of all wages owed.
The last thing you want after you settle a workers’ compensation claim with a waiver of any and all employment related claims is a phone call about a new lawsuit. Make sure that that your attorney takes a look at your settlement agreement to ensure that it meets the requirements of the ADEA, FLSA, and the rest of the alphabet soup that makes up employment law.