H. Final Comments

If you sign an employment contract containing an arbitration clause, a claim made by a fired employee under the ADEA may fall within the scope of the clause and you may be forced to litigate an age discrimination dispute in arbitration, rather than in court before a jury. This could work to your disadvantage because arbitrators are not empowered to award punitive damages, injunctions stopping further harassment, and legal fees in most instances.

Furthermore, arbitrators are usually business people or lawyers, and their philosophical orientation is often not as closely aligned to an individual's rights, as a jury is. Arbitration awards tend to be smaller for discriminatory harms committed. Thus, it is important to understand the ramifications of any arbitration clause in an employment agreement before signing. Consider seeking legal advice when presented with a comprehensive employment contract for an important job.

Recognize that waivers signed by a departing worker may not protect the employer if the worker later applies for a job. One 55-year-old executive was dismissed in a downsizing move. He accepted an enhanced severance package (twice the usual severance) and signed a waiver relinquishing his right to sue the company. A year later, still unemployed, he saw his old job advertised in the newspaper. With the encouragement of a former superior, he applied for the position. He lost out to a much younger worker under 40 with little experience.

The man sued, claiming that he was a victim of age discrimination. The trial court dismissed the case as a result of the waiver he had signed. But the appeals court noted that the ADEA disapproves people waiving age discrimination claims. It ruled that although the waiver would normally preclude the worker from suing the company, it did not cover discriminatory events that occurred after the waiver was signed and thus was ineffectual!