The Age Discrimination Employment Act (ADEA) protects workers age 40 or older from discrimination in the workplace based on their age. Under the ADEA, employers are not permitted to require employees to retire (i.e. involuntary retirement) upon meeting a specific age unless it meets one of the limited exceptions to the rule. For example, involuntary retirement may be required of certain executives and high policymakers and public safety employees, like firefighters and police officers.
Voluntary retirement is permissible under the ADEA. Thus, employers are permitted to offer early retirement incentives to employees. The crucial question is whether the offer really is one of voluntary retirement or if the employer’s offer is tantamount to forcing the employee to accept the offer.
Generally, if the only other alternative to retiring is one that would leave the employee worse off, then the offer of retirement may not be voluntary. For example, if the employee is faced with termination or accepting early retirement, or if the employee if fired after refusing to take early retirement, the retirement was not voluntary. Additionally, employers generally are not allowed to reduce an employee’s benefits if they do not accept early retirement or once they reach a certain age.
In some cases, employees may have a constructive discharge claim against their employers based on an offer of voluntary retirement that was in fact involuntary retirement. To rise to the level of constructive discharge, the offer must disguise the employer’s intentions of getting rid of the employee based on his or her age. The employee will have the burden of proving that the employer made working conditions so intolerable that a reasonable employee would have been compelled to quit.
Courts have considered many different factors in determining whether there was constructive discharge following an employee’s decision not to accept early retirement, including:
Employers must give employees a reasonable amount of time to consider an offer of early retirement. Given the impact of accepting such an offer, employers have to provide employees with the opportunity to weigh the benefits and come to a reasoned decision. If employers demand an immediate response or do not provide employees with a reasonable amount of time, this can be evidence of involuntary retirement.
Employers also can require employees to waive certain rights under the ADEA as a condition of accepting an early retirement plan. This is an acceptable practice, so long as the waiver is voluntary and knowing and meets the requirements for a legal waiver under the ADEA.
If your employer has offered you an early retirement incentive plan, you may want to have an attorney review it so that you understand what you are signing and any rights you may be waiting. For more information on voluntary and involuntary retirement, constructive discharge claims or other employment legal issues, contact an experienced employment law attorney today.