Age Discrimination: Use of ADEA Waivers by Large Corporations

GAO discussed 60 Fortune 100 companies' lawsuit and claim waiver requirements for employees participating in exit incentive programs, which offer extra or enhanced benefits to encourage employees to leave the company voluntarily. GAO noted that, from 1979 through 1988: (1) 24 percent of companies sponsoring exit incentive programs required employees to sign a waiver to receive enhanced benefits; (2) 50 percent of those companies requiring waivers did so during only one year of the program; (3) 40 percent of incentive programs requiring waivers included nonpension benefits such as cash bonuses, with the majority of these programs offered in 1987 and 1988; and (4) the percentage of companies using waivers almost tripled. GAO also noted that: (1) neither the government nor the courts provide oversight on companies' use of these waivers; (2) the waivers could cause workers to unknowingly release their legal rights, particularly the right to file age discrimination claims; (3) companies requiring waivers cited the necessity of avoiding lawsuits or claims against them; and (4) companies not requiring waivers felt that the voluntary nature of the program protected them against claims and lawsuits.