[Code of Federal Regulations]
[Title 29, Volume 4]
[Revised as of July 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR1625.23]

[Page 343]
 
                             TITLE 29--LABOR
 
          CHAPTER XIV--EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
 
PART 1625_AGE DISCRIMINATION IN EMPLOYMENT ACT--Table of Contents
 
                    Subpart B_Substantive Regulations
 
Sec.  1625.23  Waivers of rights and claims: Tender back of consideration.

    (a) An individual alleging that a waiver agreement, covenant not to 
sue, or other equivalent arrangement was not knowing and voluntary under 
the ADEA is not required to tender back the consideration given for that 
agreement before filing either a lawsuit or a charge of discrimination 
with EEOC or any state or local fair employment practices agency acting 
as an EEOC referral agency for purposes of filing the charge with EEOC. 
Retention of consideration does not foreclose a challenge to any waiver 
agreement, covenant not to sue, or other equivalent arrangement; nor 
does the retention constitute the ratification of any waiver agreement, 
covenant not to sue, or other equivalent arrangement.
    (b) No ADEA waiver agreement, covenant not to sue, or other 
equivalent arrangement may impose any condition precedent, any penalty, 
or any other limitation adversely affecting any individual's right to 
challenge the agreement. This prohibition includes, but is not limited 
to, provisions requiring employees to tender back consideration 
received, and provisions allowing employers to recover attorneys' fees 
and/or damages because of the filing of an ADEA suit. This rule is not 
intended to preclude employers from recovering attorneys' fees or costs 
specifically authorized under federal law.
    (c) Restitution, recoupment, or setoff. (1) Where an employee 
successfully challenges a waiver agreement, covenant not to sue, or 
other equivalent arrangement, and prevails on the merits of an ADEA 
claim, courts have the discretion to determine whether an employer is 
entitled to restitution, recoupment or setoff (hereinafter, 
``reduction'') against the employee's monetary award. A reduction never 
can exceed the amount recovered by the employee, or the consideration 
the employee received for signing the waiver agreement, covenant not to 
sue, or other equivalent arrangement, whichever is less.
    (2) In a case involving more than one plaintiff, any reduction must 
be applied on a plaintiff-by-plaintiff basis. No individual's award can 
be reduced based on the consideration received by any other person.
    (d) No employer may abrogate its duties to any signatory under a 
waiver agreement, covenant not to sue, or other equivalent arrangement, 
even if one or more of the signatories or the EEOC successfully 
challenges the validity of that agreement under the ADEA.

[65 FR 77446, Dec. 11, 2000]