(a) An individual alleging that a waiver agreement, covenant not to sue, or other equivalent arrangement was not knowing and voluntary under the ADEA is not required to tender back the consideration given for that agreement before filing either a lawsuit or a charge of discrimination with EEOC or any state or local fair employment practices agency acting as an EEOC referral agency for purposes of filing the charge with EEOC. Retention of consideration does not foreclose a challenge to any waiver agreement, covenant not to sue, or other equivalent arrangement; nor does the retention constitute the ratification of any waiver agreement, covenant not to sue, or other equivalent arrangement.
(b) No ADEA waiver agreement, covenant not to sue, or other equivalent arrangement may impose any condition precedent, any penalty, or any other limitation adversely affecting any individual's right to challenge the agreement. This prohibition includes, but is not limited to, provisions requiring employees to tender back consideration received, and provisions allowing employers to recover attorneys' fees and/or damages because of the filing of an ADEA suit. This rule is not intended to preclude employers from recovering attorneys' fees or costs specifically authorized under federal law.
(c) Restitution, recoupment, or setoff. (1) Where an employee successfully challenges a waiver agreement, covenant not to sue, or other equivalent arrangement, and prevails on the merits of an ADEA claim, courts have the discretion to determine whether an employer is entitled to restitution, recoupment or setoff (hereinafter, “reduction”) against the employee's monetary award. A reduction never can exceed the amount recovered by the employee, or the consideration the employee received for signing the waiver agreement, covenant not to sue, or other equivalent arrangement, whichever is less.
(2) In a case involving more than one plaintiff, any reduction must be applied on a plaintiff-by-plaintiff basis. No individual's award can be reduced based on the consideration received by any other person.
(d) No employer may abrogate its duties to any signatory under a waiver agreement, covenant not to sue, or other equivalent arrangement, even if one or more of the signatories or the EEOC successfully challenges the validity of that agreement under the ADEA.
[65 FR 77446, Dec. 11, 2000]
Notes of Decisions
John R. Wastak v. Lehigh Valley Health Network, 342 F.3d 281 (3rd Cir. 2003).
· cites it 2× “In its brief, the EEOC raised an issue regarding our construction of 29 C.F.R. § 1625.23 (b), an EEOC regulation, contending that it was in conflict with agency statements published in the Federal Register at the time of the regulation’s promulgation, which indicated a contrary…”
John R. Wastak v. Lehigh Valley Health Network, 333 F.3d 120 (3rd Cir. 2003).
· cites it 2× “6 Wastak also argues that the Release was invalid because it violated 29 C.F.R. § 1625.23 (b). That regulation states: No ADEA waiver agreement, covenant not to sue, or other equivalent arrangement may impose any condition precedent, any penalty, or any other limitation…”
Romero v. Allstate Ins., 1 F. Supp. 3d 319 (E.D. Pa. 2014).
“In reaching this conclusion, the court considered the agency commentary accompanying 29 C.F.R. § 1625.23 and concluded that two comments published in the Federal Register controlled the interpretation.”
Dececco v. UPMC, 3 F. Supp. 3d 337 (W.D. Pa. 2014).
“29 C.F.R. § 1625.23 (a). Section 10(c) of the Separation Agreement provides: [Plaintiff] [a]grees that this Release will survive the termination of this Agreement and, further, that her acceptance of any and all payments under the terms of this Agreement, will constitute a…”
Bogacz v. MTD Prods., Inc., 694 F. Supp. 2d 400 (W.D. Pa. 2010).
· cites it 7× “29 C.F.R. § 1625.23 (b) prohibits the inclusion of provisions limiting a plaintiffs right to challenge the validity of a waiver.”
Syverson v. Int'l Bus. MacHines Corp., 461 F.3d 1147 (9th Cir. 2006).
· cites it 2× “” 29 C.F.R. § 1625.23 (b). It very well may have been IBM’s intention to draft an agreement that would preserve the right of an employee to challenge without penalty his waiver of ADEA claims as not knowing or voluntary.”
Syverson v. Int'l Bus. MacHines Corp., 472 F.3d 1072 (9th Cir. 2007).
· cites it 2× “” 29 C.F.R. § 1625.23 (b). It very well may have been IBM’s intention to draft an agreement that would preserve the right of an employee to challenge without penalty his waiver of ADEA claims as not knowing or voluntary.”
Wastak v. Lehigh Valley Health (3rd Cir. 2003).
· cites it 2× “We reiterate that this is not a case in which the employer clearly prohibited resort to administrative process, or in which the employee 18 Wastak also argues that the Release was invalid because it violated 29 C.F.R. § 1625.23 (b). That regulation states: No ADEA waiver…”
Parsons v. Pioneer Seed Hi-Bred Int'l, Inc., 385 F. Supp. 2d 782 (S.D. Iowa 2005).
“at 504 (internal citations omitted) (citing 29 C.F.R. § 1625.23 which prohibits inclusion of a waiver provision penalizing a party for challenging the waiver’s validity).”
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