Syverson v. IBM, 2006 WL 2506421 (9th Cir. 2006)

The former IBM employees in this class action challenged their purported waiver of claims arising under the federal Age Discrimination in Employment Act (ADEA) on the ground that the waiver, which was part of a severance agreement, was not “knowing and voluntary” within the meaning of the Older Workers Benefit Protection Act (OWBPA). According to the Ninth Circuit (and the Eighth Circuit before it in Thomforde v. IBM, 406 F.3d 500 (8th Cir. 2005)), the problem with the release IBM prepared was that it included a general release of claims (including ADEA claims) that appeared to conflict with a covenant not to sue, which read: “This covenant not to sue does not apply to actions based solely under the [ADEA].” (The reason IBM had included a carve-out from the covenant not sue was in order to comply with a separate federal regulation prohibiting an employer from recovering its attorneys’ fees from an employee who challenges a release under the ADEA.) The Court concluded that “to a lay reader – and…to many lawyers as well – these provisions seem first to release all ADEA claims an employee might have, and then to preserve a right to sue under the ADEA, implying retention, not release, of ADEA claims.”