Settlement Agreements & Releases Flashcards
What is a simple release?
An exchange of some type of separation payment to which the employee is not otherwise entitled to be paid, in exchange for buying “peace” as the employee leaves.
What EEOC rights cannot be released?
The right to file a charge, testify, assist, or participate in any manner in an investigation, hearing, or proceeding under Title VII, ADA, ADEA, or EPA. This should be explicity noted in the release.
What is a RIF release?
A standard release prepared in conjuntion with a RIF, which will involve the additioanl information requred by the Older Workers’ Benefit Protection Act (“OWBPA”) in the event of a group layoff.
What is a settlement agreement and release?
Used in situations where a specific claim has been asserted through an attorney demand letter, EEOC charge, or filed lawsuit; is much more comprehensive and will include several provisions not found in a simple or RIF release.
Name the basic release requirements.
1) Written in plain English (per EEOC Policy Document)
2) Unilateral release (by employee)
3) Limited number of recitals (some may be required by state law)
4) Consideration in exchange; cannot be final wages, but might be mutual release
5) Non-admissions clause
6) Choice of law provision
7) No-reliance clause
8) No waiver of future claims
9) Advise to consult attorney
10) Signature of the employee (but not necessarily the employer)
Are payments in employment cases taxable?
Generally, yes.
Who are the proper parties to a release?
You and anyone acting for you (versus successors, assigns, etc.).
Should consideration be allocated to various purposes?
It can be prudent to do so, e.g., some to lost wages and some for emotional distress. It may also be prudent to allocate some consideration in exchange for a covenant not to compete.
Should any specific statutes be itemized in a release?
Yes, the release should probably specifically reference Title VII, the ADA, the ADEA, other standard equal employment statutes, and claims of discrimination (note one case where waiver referencing claims related to employment, resignation, and termination was insufficient to include discrimination claims). It should also reference all claims related to wrongful discharge, negligence, defamation, tort & contract.
Should any specific statutes NOT be itemized in a release?
Yes, several statutes prohibit release of claims: FLSA, EPA (part of FLSA), ERISA, Workers’ Comp, Unemployment Comp, FMLA, USERRA, False Claims Act, SOX, COBRA. Most of these require Department or court supervision. These, however, should NOT be itemized as “not included.”
How should claims that cannot be released be addressed in a release?
They can be included in a catch-all provision to the effect of “release does not include claims that the controlling law says cannot be released by private agreement.”
Are there other rerpesentations that can/should be included in a release?
Representations that releasor:
1) acknowledges receiving all compensation due
2) has notified the company of any injuries received
3) has been permitted to take all required leaves
4) has not engaged in any misconduct (in case of a “without cause” provision in the employer’s severance policy)
Can an employee waive his right to recover money damages in any charge, complaint, or lawsuit filed by him or on his behalf?
Yes. It is the right to file the administrative charge that cannot be waived, not the right to recover.
What is a non-admissions clause?
Where the employer denies liability and asserts that signing the release does not constitute an admission of liability.
What is a no-reliance clause?
Used to preclude claims of fraud or promissory estoppel. Should probably be set out in separate paragraph, use the word “reliance” specifically, and specify with particularity that (i) no affirmative representations or promises outside the agreement are being relied upon, and (ii) there is no reliance on any assumption that the other party has disclosed all material facts.
