When these plaintiffs were laid off from IBM, they signed severance agreements in which they agreed not to join any class or collective actions against IBM. In exchange for signing the agreements, plaintiffs got lump-sum payments for lost salary as well as a year's worth of health and life insurance coverage. Plaintiffs then sued IBM, claiming the agreements were invalid because they did not include information set forth in the Older Workers Benefit Protection Act of 1990. The Court of Appeals rejects that arguments, and plaintiffs are prohibited from joining any class actions.
The case is Estle v. International Business Machines Corp., issued on January 20. Under the age discrimination law, any waiver of your rights must be "knowing and voluntary." If the severance agreement leaves out pertinent information, then you did not knowingly waive your rights, correct? Maybe not. In this case, the severance agreements left out information relating to the job titles and ages of other employees who were not part of the layoff, what we call "comparator information." As the district court pointed out:
Between
2001 and 2013, IBM “conducted at least a dozen group layoffs,” using “a
standard Separation Agreement, which required employees to sign a
general waiver of employment-related rights and claims, including all
rights and claims under the ADEA, in order to receive a severance
payment and benefits. During that time, IBM consistently provided
employees selected for layoff with the OWBPA comparator information.” (Id. ¶¶ 35-36)
In
2014 – pursuant to a “company-wide change” – IBM stopped providing this
comparator information to those employees selected for layoff.
Plaintiffs contend that the comparator information must be provided
under the OWBPA in order for IBM to obtain a waiver of ADEA rights. (Id.
¶¶ 33, 36) According to Plaintiffs, however, they “received no
information in writing regarding which ‘class, unit, or group’ their
Resource Action would affect, ‘any eligibility factors’ for the Resource
Action, ‘the job titles and ages of all individuals’ asked to sign the
waiver, or ‘the ages of all individuals in the same job classification
or organizational unit’ within the group who were spared.” (Id. ¶ 79)
Estle v. Int'l Bus. Machines Corp., No. 19 CIV. 2729 (PGG), 2020 WL 5633154, at *1 (S.D.N.Y. Sept. 21, 2020), aff'd, No. 20-3372, 2022 WL 175487 (2d Cir. Jan. 20, 2022)
Between
2001 and 2013, IBM “conducted at least a dozen group layoffs,” using “a
standard Separation Agreement, which required employees to sign a
general waiver of employment-related rights and claims, including all
rights and claims under the ADEA, in order to receive a severance
payment and benefits. During that time, IBM consistently provided
employees selected for layoff with the OWBPA comparator information.” (Id. ¶¶ 35-36)
In
2014 – pursuant to a “company-wide change” – IBM stopped providing this
comparator information to those employees selected for layoff.
Plaintiffs contend that the comparator information must be provided
under the OWBPA in order for IBM to obtain a waiver of ADEA rights. (Id.
¶¶ 33, 36) According to Plaintiffs, however, they “received no
information in writing regarding which ‘class, unit, or group’ their
Resource Action would affect, ‘any eligibility factors’ for the Resource
Action, ‘the job titles and ages of all individuals’ asked to sign the
waiver, or ‘the ages of all individuals in the same job classification
or organizational unit’ within the group who were spared.” (Id. ¶ 79)
Estle v. Int'l Bus. Machines Corp., No. 19 CIV. 2729 (PGG), 2020 WL 5633154, at *1 (S.D.N.Y. Sept. 21, 2020),
aff'd, No. 20-3372, 2022 WL 175487 (2d Cir. Jan. 20, 2022)
Between
2001 and 2013, IBM “conducted at least a dozen group layoffs,” using “a
standard Separation Agreement, which required employees to sign a
general waiver of employment-related rights and claims, including all
rights and claims under the ADEA, in order to receive a severance
payment and benefits. During that time, IBM consistently provided
employees selected for layoff with the OWBPA comparator information.” (Id. ¶¶ 35-36)
In
2014 – pursuant to a “company-wide change” – IBM stopped providing this
comparator information to those employees selected for layoff.
Plaintiffs contend that the comparator information must be provided
under the OWBPA in order for IBM to obtain a waiver of ADEA rights. (Id.
¶¶ 33, 36) According to Plaintiffs, however, they “received no
information in writing regarding which ‘class, unit, or group’ their
Resource Action would affect, ‘any eligibility factors’ for the Resource
Action, ‘the job titles and ages of all individuals’ asked to sign the
waiver, or ‘the ages of all individuals in the same job classification
or organizational unit’ within the group who were spared.” (Id. ¶ 79)
Estle v. Int'l Bus. Machines Corp., No. 19 CIV. 2729 (PGG), 2020 WL 5633154, at *1 (S.D.N.Y. Sept. 21, 2020), aff'd, No. 20-3372, 2022 WL 175487 (2d Cir. Jan. 20, 2022)
Between 2001 and
2013, IBM “conducted at least a dozen group layoffs,” using “a standard
Separation Agreement, which required employees to sign a general waiver
of employment-related rights and claims, including all rights and
claims under the ADEA, in order to receive a severance payment and
benefits. During that time, IBM consistently provided employees selected
for layoff with the OWBPA comparator information.”
In
2014 – pursuant to a “company-wide change” – IBM stopped providing this
comparator information to those employees selected for layoff.
Plaintiffs contend that the comparator information must be provided
under the OWBPA in order for IBM to obtain a waiver of ADEA rights.
According to Plaintiffs, however, they “received no
information in writing regarding which ‘class, unit, or group’ their
Resource Action would affect, ‘any eligibility factors’ for the Resource
Action, ‘the job titles and ages of all individuals’ asked to sign the
waiver, or ‘the ages of all individuals in the same job classification
or organizational unit’ within the group who were spared.”
In signing the severance agreements, did plaintiffs waive any rights under the Older Workers Benefit Protection Act? No, says the Court of Appeals (Park, Leval and Sack). In 14 Penn Plaza LLC v. Pyett, 556 U.S. 247 (2009), the Supreme Court said the "right or claim" under the age discrimination law that employees cannot knowingly waive "is limited to substantive rights and does not include procedural ones." Collective actions, like arbitration, are procedural issues, not substantive rights under 14 Penn Plaza.
What it means for plaintiffs is they did not waive any substantive rights and "a collective-action waiver is thus not a waiver of any 'right or claim' under the ADEA that triggers the requirements" under the statute's knowing waiver provision. No class or collective action for plaintiffs, who can still bring individual ADEA claims. As the Circuit notes, this holding is consistent with those reached by five other Circuits since 1999.
Between
2001 and 2013, IBM “conducted at least a dozen group layoffs,” using “a
standard Separation Agreement, which required employees to sign a
general waiver of employment-related rights and claims, including all
rights and claims under the ADEA, in order to receive a severance
payment and benefits. During that time, IBM consistently provided
employees selected for layoff with the OWBPA comparator information.” (Id. ¶¶ 35-36)
In
2014 – pursuant to a “company-wide change” – IBM stopped providing this
comparator information to those employees selected for layoff.
Plaintiffs contend that the comparator information must be provided
under the OWBPA in order for IBM to obtain a waiver of ADEA rights. (Id.
¶¶ 33, 36) According to Plaintiffs, however, they “received no
information in writing regarding which ‘class, unit, or group’ their
Resource Action would affect, ‘any eligibility factors’ for the Resource
Action, ‘the job titles and ages of all individuals’ asked to sign the
waiver, or ‘the ages of all individuals in the same job classification
or organizational unit’ within the group who were spared.” (Id. ¶ 79)
Estle v. Int'l Bus. Machines Corp., No. 19 CIV. 2729 (PGG), 2020 WL 5633154, at *1 (S.D.N.Y. Sept. 21, 2020), aff'd, No. 20-3372, 2022 WL 175487 (2d Cir. Jan. 20, 2022)
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