The New York State Senate recently passed the No Severance Ultimatums Act (the Act), Senate Bill S372. This would amend the New York Labor Law to add new § 215-d and require employers offering severance pursuant to an agreement to provide:
- a review period of up to 21 business days within which to review such agreement;
- a seven-day non-waivable revocation period within which to revoke such agreement; and
- a notice advising the employee of the right to consult with an attorney regarding such agreement.
Under the Act, employees may sign the agreement before the expiration of the 21-day review period, provided it was knowingly and voluntarily executed, and without fraud, misrepresentation, or threat on the part of the employer. Severance agreements that violate the Act would be deemed void and unenforceable.
The Act does not apply to severance agreements negotiated pursuant to a collective bargaining agreement.
Existing Law
To obtain a valid release of claims under the federal Age Discrimination in Employment Act (ADEA), as amended, employees age 40 and over are currently entitled to a 21-day review period and seven-day revocation period. However, unlike the Act, the ADEA review period is based on 21 calendar days — not business days.
What’s Next
A companion bill has been introduced in the New York State Assembly, A6480, and is in committee. If the Act becomes law, it would become effective immediately. We will continue to monitor its progress. Stay tuned.
