On March 4, 2025, the New York state Senate passed S.372, the “No Severance Ultimatums Act” a first of its kind legislation which, if enacted, will require New York employers to:

• provide a minimum 21business days for employees to review severance agreements (which is waivable by the employee), and a nonwaivable seven-day revocation period after signing, and
• notify employees of their right to consult with an attorney before signing the agreement

These protections will apply to all severance agreements except those covered by collective bargaining agreements. This bill has now moved to the New York State Assembly (A.6480).

Difference from Existing Law

Under existing federal law, the Older Workers Benefit Protection Act (OWBPA) mandates that employers seeking a release of claims under the federal Age Discrimination in Employment Act (ADEA) for employees ages 40 years or older must provide 21 days to review the agreement (or 45 days for group layoffs), and a seven (7) day nonwaivable revocation period after signing.

The No Severance Ultimatums Act will expand these protections to all New York employees regardless of age and to all severance agreements, seeking waiver of all claims, not just age discrimination claims.

The law aligns with a broader push for greater transparency and fairness in employment agreements, similar to recent trends limiting nondisclosure agreements in workplace settlements. It seeks to prevent employees from feeling pressured into quickly signing severance agreements and to ensure employees have sufficient time to understand their rights, consult legal counsel and reconsider their decision after signing a severance agreement.

How Other States and/or Existing Laws Address Severance Agreements

Although the No Severance Ultimatums Act is the first in the nation to mandate a 21-business day review (and seven-day revocation period) for all severance agreements, other states have set minimum review and/or revocation periods in certain situations.

• California: SB 331 (passed in 2022) requires employers to provide all employees at least five business days to review a severance agreement and notify employees of their right to consult with an attorney. California however does not require employers to require a revocation period after signing.
• Minnesota: Under the Minnesota Human Rights Act (MHRA), prospective claims of the MHRA cannot be released in a severance agreement. Additionally, if a severance agreement includes a release of claims existing at the time of execution related to workplace discrimination, harassment or retaliation, employees have the right to rescind the release of MHRA claims within 15 days (written agreements) or 45 days (for electronic agreements) after signing.
• New York: Existing New York law already requires a 21-day (waivable) review period and a mandatory seven-day revocation period for settlement agreements resolving discrimination, harassment or retaliation claims, when the employer includes a non-disclosure provision (at the employee’s choice) regarding the facts of the claim. Employers must provide this in a separate agreement for review and signature before signing the full settlement agreement. The No Severance Ultimatums Act expands these protections to all severance agreements, regardless of the types of claims involved.

Next Steps for New York Employers

If signed into law, the No Severance Ultimatums Act will take immediate effect. Employers in New York should be prepared to promptly update their severance agreements and policies to ensure compliance, as any severance agreement that violates the provisions of the No Severance Ultimatums Act shall be deemed void and unenforceable. Employers should plan to:

• incorporate the new 21-business-day review period and nonwaivable seven-day revocation period.
• add a notice to employees of their right to consult an attorney.
• adjust severance timelines to account for these extended review and revocation periods.

As a reminder, these changes may prolong severance negotiations and employers will need to plan further ahead when offering severance packages.