Older Workers Benefit Protection Act (1990)
10 July 2006Older Workers Benefit Protection Act (1990), 29 U.S.C. §§621 et seq.
Coverage and Prohibition: The Older Workers Benefit Protection Act (the “Act”) amends the Age Discrimination in Employment Act (“ADEA”) (see above) in several important areas. As its main focus, the Act reversed the United States Supreme Court’s ruling in Public Employees Retirement System of Ohio v. Betts, 492 U.S.158 (1989). In Betts, the Supreme Court held that employee benefit plans that are not intended to avoid the ADEA in other aspects of employment may offer older employees lower benefits than those offered to younger employees.
The Act restored and codified the EEOC’s pre-Betts “equal benefit or equal cost” principle, which allows an employer to “observe the terms of a bona fide benefit plan,” as long as the employer provides older workers the same or better benefits as younger workers. If the benefits offered to younger workers are better than the benefits offered to older workers, the employer must prove: (1) that the cost of providing those benefits to older workers would exceed the cost of providing the benefits to younger workers; and (2) that the benefits offered to older workers cost the employer at least as much as the benefits offered to younger workers.
The Act permits an employer to deduct from severance payments and long-term disability benefits the value of certain other employer-provided benefits. The Act also establishes offsets that are permitted against several benefits in connection with an early retirement incentive program.
Additionally, the Act imposes specific minimum conditions that must be met for an effective release of potential age discrimination claims under the ADEA. Employers must show the following in order for a release to be considered “knowing and voluntary:” (1) the waiver must be written in plain English; (2) the waiver must specifically refer to rights or claims arising under the ADEA; (3) the employee must receive something of value in addition to anything of value to which the employee is already entitled; (4) the waiver cannot bar the employee’s right to pursue claims that may arise after the waiver is signed; (5) the employee must be given at least 21 days to consider whether to sign the agreement, or at least 45 days if the waiver is offered in connection with an exit incentive; (6) the employee has at least seven days following the signing of the waiver in which to revoke it; and (7) the employer must advise the employee in writing to consult an attorney. Slightly different rules apply to waivers signed in connection with group layoffs, lawsuits, or pending Equal Employment Opportunity Commission (“EEOC”) charges.
Enforcement and Remedies: The enforcement procedures and available remedies are the same as provided for the ADEA (see above).
Related Regulations:
EEOC: ADEA Interpretations and Substantive Regulations, 29 C.F.R. Part 1625.
EEOC: ADEA Procedures, 29 C.F.R. Part 1626.
EEOC: ADEA Recordkeeping and Posting Requirements, 29 C.F.R. Part 1627
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