NY’s No Severance Ultimatums Act: Proposed Changes to Severance Agreement Review and Revocation Rights, by Keith J. Gutstein, Esq. and Eric Zenzerovich, Esq., 10-31-2025

New York State is considering legislation that would significantly impact how employers handle severance agreements. The proposed No Severance Ultimatums Act seeks to establish new protections for employees by mandating minimum review and revocation periods for severance agreements.

Key Provisions of the Proposed Legislation

The Act (S372A/A6480), which has already passed the NYS Senate, would amend the New York Labor Law by adding a new section, § 215-d, which includes the following requirements:

• 21-Day Review Period: Employers must provide employees with at least 21 calendar days to review a severance agreement before signing.
• Seven-Day Revocation Period: After signing, employees would have seven days to revoke the agreement. The agreement would not become effective until this revocation period has expired.
• Notice of Right to Consult an Attorney: Employers must notify employees of their right to consult with an attorney regarding the severance agreement.

Employees may sign the agreement before the end of the 21-day review period, provided they do so knowingly, voluntarily, and not induced by the employer through fraud, misrepresentation, or threats.

Severance agreements that do not comply with these requirements would be deemed void and unenforceable.

Applicability and Exemptions

• Broad Applicability: The Act would apply to all employees in New York State, regardless of age, extending protections similar to those under the federal Older Workers Benefit Protection Act (OWBPA), which currently applies only to employees aged 40 and over.
• Exemption for Collective Bargaining Agreements: The provisions of the Act would not apply to severance agreements negotiated under a collective bargaining agreement (CBA).

Comparison with Federal Law

Under the federal OWBPA, part of the federal Age Discrimination in Employment Act (ADEA), an employer is required to provide a 21-day attorney review period in any severance agreement offered to an employee who is age 40 or older. The agreement must also contain a 7-day revocation period. However, there are currently no statutory protections, in either New York State or federal law, for those under the age of 40 being offered severance agreements. In these instances, employers can force an employee or former employee into considering an agreement on the spot, with no additional time to review it themselves or with legal counsel.

Implications for Employers

If ultimately passed and signed into law, employers should consider the following:

• Review Severance Agreement Practices: Employers should review their severance agreement practices to ensure compliance with the proposed requirements, including the 21-calendar-day review period and the seven-day revocation period.
• Update Templates and Policies: Employers may need to update their severance agreement templates and internal policies to incorporate the new notice requirements and ensure that agreements are not presented under coercive circumstances.
• Training for HR Personnel: Human resources personnel should be trained on the new requirements to ensure proper implementation and to avoid potential legal challenges.

Next Steps

While it is not clear whether the legislation will ultimately become law, employers should monitor the bill’s progress and prepare to implement necessary changes to their severance agreement processes if necessary.

Authors: Keith J. Gutstein, Chair of KD’s Labor and Employment Law Practice Group and Co-Managing Partner of the Long Island Office and Associate Eric Zenzerovich