The Older Workers Benefit Protection Act (OWBPA), 29 U.S.C. § 621 et seq., imposes specific requirements for releases of age discrimination claims that are often executed when an older employer is terminated. Among other things, the Act requires that older workers signing such releases be given enough time to consider their options, that they have seven days after execution to change their minds, and that the releases specifically mention the Age Discrimination in Employment Act. See 29 U.S.C. § 626(f). In this case, the release signed by the plaintiff admittedly did not comply with these requirements. The defendant claimed, however, that the plaintiff was nonetheless bound by it because she had ratified the release by retaining the monies received in exchange for the release.
By a six-to-three vote, the Supreme Court ruled 1/26/98 that the OWBPA permits the employees suit. Writing for the majority, Justice Kennedy noted that there was some authority suggesting that at common law a plaintiff's failure to return money received in exchange for a defective release ratified the release or equitably estopped the plaintiff from repudiating it. The majority found, however, that the common law was irrelevant because the OWBPA "sets up its own regime for assessing the effect of ADEA waivers, separate and apart from contract law." The majority also found that the common law rule, deeming a release ratified by the failure to return monies received, would frustrate the operation of the OWBPA because many discharged employees lack the means to return the monies received by them.
Justice Breyer and O'Connor concurred to point out that, in their view, a release that fails to satisfy the strictures of the OWBPA is voidable, rather than void. Under this view, an employee might choose to accept a release that fails to satisfy the OWBPA. The two justices also observed that nothing in the statute prevented an employer from seeking restitution, recoupment or set-off against an employee retaining monies received in exchange for a release. Three members of the Court – Chief Justice Rehnquist and Justices Scalia and Thomas – dissented on the ground that the OWBPA should be interpreted to comply with the common law.