Labor & Employment Law Daily Wrap Up, EXPERT INSIGHTS—New York State Senate passes the No Severance Ultimatums Act, (Mar 25, 2025)

Law Firms Mentioned:Reavis Page Jump

By Jill Kahn Marshall and Anna Beckelman of Reavis Page Jump LLP

The New York State Senate recently passed Senate Bill S372, also known as the No Severance Ultimatums Act, which would add a new Section 215-d to the New York Labor Law in order to "ensure that all New Yorkers are provided protections when reviewing severance agreements, including providing ample time to review such agreements." Severance agreements typically ask employees to release important claims against their employers, and the Act's proponents contend they should not be forced to make this important decision under duress or without consulting an attorney.

If passed by the State Assembly and signed into law, the Act would require employers to provide all employees a review period of 21 days for proposed severance agreements, along with a seven-day revocation period following their execution of such agreement. The severance agreement would not become effective until the expiration of this revocation period. An employee may sign a severance agreement prior to the conclusion of the 21-day review period, provided that the review period is waived knowingly and voluntary, and without fraud, misrepresentation, or threat by the employer. The Act also requires employers to notify employees offered a severance agreement that the employee has the right to consult an attorney regarding the agreement. The Act would provide this protection to all employees in New York State, with the exception of severance agreements negotiated under a collective bargaining agreement.

The proposed law puts employees of all ages on equal footing with those who are 40 or older, who are already afforded these protections under the federal Older Workers Benefit Protection Act (OWBFA), where the severance agreement requires a release of claims under the federal Age Discrimination in Employment Act (ADEA). This protection for older workers has created a somewhat arbitrary distinction, where workers releasing federal age discrimination claims are afforded a reasonable review and revocation period for such agreements, but younger employees who are being asked to release claims under other laws are not. Some employers exploit the lack of protection for younger workers by forcing them to decide whether to sign a severance agreement over an unreasonably short or inconvenient period of time. Other employers voluntarily chose to provide employees under 40 with the same 21-day review and seven-day revocation period in order to maintain uniformity amongst their workforce.

The Act will next go to a vote in the New York State Assembly. Employers should take note that if passed in the Assembly and signed by Governor Kathy Hochul, the Act goes into effect immediately, and New York employers will be required to comply with its provisions with respect to severance agreements provided to employees as of that date.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Jill Kahn Marshall and Anna Beckelman

Reavis Page Jump LLP

41 Madison Avenue

41st Floor

New York, NY

10010

United States

Tel.: +1 212 763 4100

E-mail: Jmarshall@rpjlaw.com

URL: www.rpjlaw.com/

Attorneys: (Reavis Page Jump).

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