New York Lawmakers Consider Progressive Reforms To Severance Agreements

The New York State Senate passed the "No Severance Ultimatums Act" ("the Act"), which, if enacted, "prevents employers from giving coercive ultimatums to employees or former employees relating to such employee's severance from employment."

Under the proposed law, employers must:

• Notify employees of their right to consult an attorney about the severance agreement;
• Provide employees with a "consideration period" to review the agreement, not less than 21 calendar days; and
• Provide a seven-day revocation period following execution of the agreement, which would become effective only after the revocation period has expired.

Employees may waive the 21-day review period so long as their consent is knowing, voluntary, and not induced by fraud, misrepresentation, or threats by their employer to withdraw or alter the agreement's terms. The Act does not apply to severance agreements negotiated pursuant to collective bargaining agreements.