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In a series of posts, our blog has discussed how there might very well come a day when small business owners must proceed with layoffs or reductions in force due to circumstances beyond their control, and how they must ensure that their actions in this area don’t run afoul of federal employment discrimination laws.

Furthermore, we discussed how small business owners are legally permitted to ask departing employees to sign waivers of discrimination claims, but that certain rules must be observed in order for these waivers to be considered valid.

To recap, we discussed how any waiver of discrimination claims must be supported by consideration (i.e., provide the employee with something of value in exchange for their agreement not to sue), and cannot limit the employee’s ability to sue based on future employment experiences.

No restrictions on interactions with the U.S. Equal Opportunity Employment Commission

While a waiver of discrimination can prevent a departing employee from pursuing a civil lawsuit alleging discrimination on their own, it cannot prevent them from filing a charge of discrimination with the EEOC.

In fact, the waiver can in no way limit the ability of the departing employee to testify, participate in, or support any investigation, proceeding or hearing undertaken by the EEOC.

Legal compliance at all levels

In general, any waivers of discrimination claims must be drafted in a manner that complies with all applicable federal and state laws.

For example, if state law requires an employee to be provided with an established timeframe after signing the waiver in which to reconsider and revoke their assent, this must be set forth in writing.

“Knowingly and Voluntarily”

Lastly, a departing employee’s agreement not to file a discrimination lawsuit must be made both “knowingly and voluntarily.” While this might seem like a straightforward determination, there are very specific rules that apply depending upon which type of discrimination claims the employer is asking the departing employee to waive.

Indeed, if the employer is asking for a waiver of discrimination complaints relating to pay, race, color, sex, religion, disability, national origin or genetic information, one set of detailed rules must be followed. However, if the employee is requesting a waiver of discrimination complaints relating to age, an entirely different set of rules must be followed.  

What all this serves to underscore perhaps more than anything is that waivers of discrimination claims can prove to be a complex undertaking. As such, small business owners in these situations should seriously consider consulting with a skilled legal professional.