Labor & Employment Law Daily Wrap Up, EXPERT INSIGHTS—New York enacts law expanding severance agreement protections, (Jul 20, 2026)

By William C. Martucci of Shook, Hardy & Bacon

New York recently enacted legislation expanding protections for employees who are offered severance agreements. The law, known as the No Severance Ultimatums Act, applies broadly to virtually all employees in New York.

The Act defines a severance agreement as "an agreement offered by an employer to an employee upon separation of employment and related to such separation that requires such employee to release waivable claims against their employer."

Under the Act, an employer offering a severance agreement to an employee or former employee must notify the individual that:

• The employee has the right to consult with an attorney regarding the agreement;

• The employee must be given at least 21 calendar days to consider the agreement; and

• The employee may revoke the agreement within seven calendar days after signing it, and the agreement does not become effective or enforceable until that revocation period expires.

The Act further provides that an employee may sign the agreement before the end of the 21-day consideration period, provided that decision to do so is knowing and voluntary and is not induced by fraud, misrepresentation or a threat to withdraw or modify the offered consideration.

In many respects, the New York law mirrors provisions of the federal Older Workers Benefit Protection Act (OWBPA). However, it is the first state law of its kind to extend these protections to a broad group of employees without regard to age. As a result, the Act imposes requirements that exceed those mandated under federal law.

The New York legislation may also signal a broader trend. Additional states are likely to adopt similar laws that provide employees with enhanced procedural rights in the consideration of severance arrangements. The impact of the New York law may well be to create a new nationwide baseline for severance agreement procedural provisions.

William C. Martucci

Shook, Hardy & Bacon

111 S. Wacker Dr.

Suite 4700

Chicago

IL 60606

United States

Tel.: +1 312 704 7700

E-mail:

URL: www.shb.com/

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Attorneys: (Shook, Hardy & Bacon).

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