Is it legal for a corporation to lay off an employee close to their retirement date?

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Is it legal for a corporation to lay off an employee close to their retirement date?

I was recently laid off by a major corporation after 36 years of service. I would have been eligible for early retirement in 1 year (I’m currently 54). This was a sudden action as there was no mention off layoffs. I will receive a lump sum payment, equal to 6 months of salary and 2 months of benefits. They will send me a package containing a letter for me to sign, indicating that I will not be able to file a suit against the company.

Asked on March 29, 2011 under Employment Labor Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

As a general matter, yes--a company may lay off employees shortly before their retirement dates. If you have an employment contract restricting the company's grounds or ability to terminate you, that contract would have to be honored; in the absence of a contract, you are a "month to month" employee and may be laid off at any time the employer chooses.

What they can't do is discriminate against an older (over 40) employee on the basis of age. If you believe that you have been laid off or terminated because of your age (rather for some other non-age reason--e.g. reduction in force, performance, violation of policy, restructuring, etc.) you may have an age-discrimination claim and may wish to speak with an employement attorney.


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