The OWBPA Does Not Create an Independent Cause of Action
On February 7, 2008, the U.S. District Court for the Middle District of Pennsylvania ruled that an invalid release under the Older Workers Benefit Protection Act (OWBPA) does not create an independent cause of action for damages. In Baker v. Washington Group Int’l Inc., the Court rejected the argument by a group of former employees who alleged that because their signed releases which waived potential discrimination claims were invalid under the OWBPA, they were entitled to damages under the Age Discrimination in Employment Act (ADEA).
The terminated employees had been presented with separation agreements and general releases in which they agreed to release and discharge their employer, WGI, for any and all claims, including claims under the ADEA. In return for signing the release, employees were provided with up to four weeks of severance. The employees were given 21 days to sign the release.
The employees sued under the ADEA alleging that WGI had failed to provide them with “sufficient, correct, and proper notice” as mandated for an employee’s waiver of an ADEA claim. Specifically, as required by the OWBPA, WGI had failed to provide the employees with 45 days for review of the release and the employees were not informed in writing of the ages of all individuals selected for termination and the ages of all individuals in the same job classifications who were not selected for termination.
In granting WGI’s motion for judgment on the pleadings, the Court held that the employees could not sue for damages under the ADEA simply based on the employer’s noncompliance with the OWBPA requirements. The employees’ claim against WGI was not based on a contention that the company had discriminated against them on the basis of age, but rather that its release did not comply with the statutory requirements under the OWBPA. Under these circumstances, WGI argued that while the release was admittedly unenforceable, the employees lacked an ADEA claim. The Court agreed, and stated that “virtually every court that has confronted the issue has concluded that the OWBPA’s waiver requirements do not create and independent cause of action.” Further, while an OWBPA violation may negate a waiver, it does not create a right to sue under the ADEA.
The Third Circuit Court of Appeals has yet to rule on this issue; accordingly, the last chapter in this saga has yet to be written.
