National Litigation Hotline

Eighth Circuit Finds Severance Agreement's Waiver of Age Discrimination Claims Valid

The Eighth Circuit has held that an employee's waiver of his ability to bring an age discrimination claim under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. ” 621-34, upon severance from his employer was knowing and voluntary, and therefore valid, in that it was written in a manner calculated to be understood. Parsons v. Pioneer Seed Hi-Bred International, 2006 WL 1359660 (8th Cir. May 19).

After defendant Pioneer Seed Hi-Bred International (hereinafter, 'Pioneer') eliminated his position, plaintiff Roger Parsons, age 55 at the time, was given two severance options. Parsons sought the advice of counsel and chose one of those options, which provided that in consideration for the receipt of a lump sum payment, including the prorated value of his annual bonus and other payments and benefits as outlined in the agreement, he would 'forever release and discharge Pioneer ' from ' any and all other causes of action, claims or demands or expenses of any kind (including attorney fees and costs actually incurred), at law or equity, to settle potential claims [he] may have pursuant to ' the Age Discrimination in Employment Act ” Parson's signed this agreement and then brought suit for age discrimination under the ADEA. The United States District Court for the Southern District of Iowa granted summary judgment for Pioneer after finding that the severance agreement validly waived Parson's right to bring an age discrimination suit.

Upholding the district court's judgment, the Eighth Circuit found that because the language of the waiver contained in Parsons' severance agreement was written in a manner calculated to be understood by Parsons, it should be considered knowing and voluntary under the ADEA. In so holding, the court noted that the Older Workers Benefits Protection Act (OWBPA) of 1990, in addressing 'employers' attempts to pressure departing workers into waiving their right to bring an ADEA claim in exchange for a severance or settlement agreement,' outlined specific requirements that must be met before a waiver can bind an employee, including that it be written in a manner calculated to be understood.

Eighth Circuit Finds Severance Agreement's Waiver of Age Discrimination Claims Valid

The Eighth Circuit has held that an employee's waiver of his ability to bring an age discrimination claim under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. ” 621-34, upon severance from his employer was knowing and voluntary, and therefore valid, in that it was written in a manner calculated to be understood. Parsons v. Pioneer Seed Hi-Bred International, 2006 WL 1359660 (8th Cir. May 19).

After defendant Pioneer Seed Hi-Bred International (hereinafter, 'Pioneer') eliminated his position, plaintiff Roger Parsons, age 55 at the time, was given two severance options. Parsons sought the advice of counsel and chose one of those options, which provided that in consideration for the receipt of a lump sum payment, including the prorated value of his annual bonus and other payments and benefits as outlined in the agreement, he would 'forever release and discharge Pioneer ' from ' any and all other causes of action, claims or demands or expenses of any kind (including attorney fees and costs actually incurred), at law or equity, to settle potential claims [he] may have pursuant to ' the Age Discrimination in Employment Act ” Parson's signed this agreement and then brought suit for age discrimination under the ADEA. The United States District Court for the Southern District of Iowa granted summary judgment for Pioneer after finding that the severance agreement validly waived Parson's right to bring an age discrimination suit.

Upholding the district court's judgment, the Eighth Circuit found that because the language of the waiver contained in Parsons' severance agreement was written in a manner calculated to be understood by Parsons, it should be considered knowing and voluntary under the ADEA. In so holding, the court noted that the Older Workers Benefits Protection Act (OWBPA) of 1990, in addressing 'employers' attempts to pressure departing workers into waiving their right to bring an ADEA claim in exchange for a severance or settlement agreement,' outlined specific requirements that must be met before a waiver can bind an employee, including that it be written in a manner calculated to be understood.