Older Workers Benefit Protection Act: Overview, definition, and example
What is the Older Workers Benefit Protection Act?
The Older Workers Benefit Protection Act (OWBPA) is a U.S. federal law that amends the Age Discrimination in Employment Act (ADEA) to specifically protect employees aged 40 and over in situations involving employee benefits, waivers of legal rights, and layoffs. It sets strict requirements for how employers must handle releases of age discrimination claims in severance agreements or group terminations.
Why is the Older Workers Benefit Protection Act important?
The OWBPA ensures that older workers are not pressured into giving up their legal rights without fully understanding the consequences. If a company asks an employee to waive their right to sue for age discrimination—usually in exchange for severance pay—it must follow specific rules, including clear written language, adequate time for review, and the option to revoke. Failing to comply can invalidate the waiver and expose the employer to legal risk.
Understanding the Older Workers Benefit Protection Act through an example
If a company offers a severance package to a 55-year-old employee being laid off, and wants that employee to waive any ADEA claims, the agreement must clearly state the rights being waived, advise the employee to consult an attorney, provide at least 21 days to consider the offer, and allow 7 days to revoke the agreement after signing. If it’s a group layoff, the company must also provide information about who was selected and why.
Example of an Older Workers Benefit Protection Act clause
Here’s how an Older Workers Benefit Protection Act clause may appear in a severance agreement:
"In accordance with the Older Workers Benefit Protection Act, Employee acknowledges that they have been advised in writing to consult an attorney prior to signing this Agreement, have been given at least twenty-one (21) days to consider the terms, and have seven (7) days following execution to revoke this Agreement."
Conclusion
The Older Workers Benefit Protection Act adds important protections for employees over 40, especially in termination and severance situations. It ensures that waivers of legal rights are voluntary, informed, and properly documented. Businesses should take care to follow OWBPA requirements exactly when drafting or enforcing severance agreements involving older workers.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.