Category Personnel/Employment
Title Severance Agreements Can Be Helpful in Ticklish Employment Decisions
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Preview Severance agreements can be helpful in ticklish employment decisions
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Severance Agreements Can Be Helpful in Ticklish 
Employment Decisions  

Occasionally a school administrator and school board will run into a difficult personnel problem. Perhaps a teacher needs to either be let go before the end of the year or not have a contract renewed for the following school year. But written evaluations were not conducted in a timely manner, and there wasn't a good "paper trail" created that would have protected the school if litigation ensued. Talk with your school attorney before making any termination or nonrenewal decision. Ask the attorney whether it would make sense to offer a severance agreement. (Essentially, the school offers the employee one or more months of pay beyond the end of the person's employment in return for a signed agreement that the severance pay ends all claims against the school.) An attorney should carefully draft the agreement.

Here's an important detail that you should know. Waivers are legally valid only if they are "knowing and voluntary." That usually means the employee signing the wavier must be given a reasonable period of time to review the severance agreement. When you ask employees to waive age-based claims, under the federal Age Discrimination in Employment Act (ADEA), the Older Workers Benefit Protection Act (OWBPA) requires your waivers to include special criteria:  

  • The waiver must be in writing and be in "plain English."
  • It must specifically refer to ADEA rights or claims.
  • It can't waive rights or claims that may arise in the future (by virtue of any future employment).
  • The waiver must be in exchange for valuable consideration (severance pay).
  • If the person signing the waiver is over the age of 40, that person must be given at least 21 days to consider the waiver.
  • You are also required to advise the employee in writing to consult an attorney prior to signing the waiver.
  • You must inform the employee that he or she has a 7-day window to revoke the waiver after it's signed.  

Failure to follow any of these steps can void a severance agreement. The former employee can cash your severance check and still turn around and sue the school. For more on Understanding Waivers of Discrimination Claims in Employee Severance Agreements, see the EEOC site at https://www.eeoc.gov/policy/docs/qanda_severance-agreements.html.  

Notice: This article is designed to provide accurate and authoritative information in regard to the subject matter covered. It has been provided to member schools with the understanding that ACSI is not engaged in rendering legal, accounting, tax, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Laws vary by jurisdiction, and the specific application of laws to particular facts requires the advice of an attorney.  

Association of Christian Schools International
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Phone: 719.528.6906
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