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New York is an at-will employment state, meaning an employer can generally end a job at any time. When a termination comes with a severance offer, it is easy to feel like signing quickly is the simplest path forward. But a severance agreement is a binding contract, and understanding its terms before signing can make a meaningful difference in what you keep and what you give up.
What Belongs in a Severance Agreement
Typical severance agreements address severance pay, continuation of benefits such as health insurance, a release of legal claims against the employer, and any restrictive covenants, including confidentiality, non-disparagement, or non-solicitation terms. Some agreements also address the return of company property and cooperation with the employer after departure. Each of these terms deserves individual attention rather than a quick read through.
Review and Revocation Periods
If you are 40 or older, federal law requires that you be given at least 21 days to consider a severance agreement, or 45 days if it is part of a group layoff, along with 7 days after signing to revoke your acceptance. New York also has its own protections in situations where a settlement or severance agreement includes a non-disclosure provision tied to a claim of discrimination, harassment, or retaliation. In those cases, current New York law generally requires a similar 21-day consideration period and 7-day revocation period, along with a clear statement of the employee’s right to consult an attorney, regardless of age.
It is also worth knowing that New York lawmakers have proposed legislation, sometimes referred to as the No Severance Ultimatums Act, that would extend a 21-business-day review period and 7-day revocation period to all severance agreements in the state, not just those involving age or discrimination-related releases. As of this writing, this proposal has moved through part of the legislative process, but has not been confirmed as enacted law.
Given how quickly this kind of legislation can change, it is worth confirming its current status or discussing it directly with an employment attorney before assuming what protections apply to your specific agreement.
If Your Termination Is Part of a Larger Layoff: The New York WARN Act
If your severance offer follows a larger workforce reduction rather than an individual termination, New York’s WARN Act may come into play. Employers with 50 or more employees are generally required to give at least 90 days’ advance notice before a qualifying mass layoff or plant closing, which is longer than what federal law requires. If an employer fails to provide that notice, it can face liability for back pay and benefits covering the notice period, in addition to any severance offered separately.
This matters because a severance agreement presented in connection with a mass layoff is not necessarily the full extent of what you may be owed. Some employers include language in the severance agreement that also asks employees to release any claims related to a WARN Act violation, sometimes without clearly flagging that this is a separate legal issue from the severance pay itself.
If your position was eliminated as part of a broader layoff and you were not given the notice you believe the law requires, that is worth raising with an employment attorney before signing anything, since it could affect what you are entitled to beyond the severance offer on the table.
Reviewing the Release of Claims
The release of claims section is often the most consequential part of a severance agreement, since it typically asks you to give up your right to sue over anything that happened during your employment. New York law does not allow you to waive certain rights, such as the ability to file a charge with a government agency like the Equal Employment Opportunity Commission or the New York State Division of Human Rights, even if the agreement’s language suggests otherwise. Understanding the difference between what can and cannot be waived is not always intuitive from the text alone.
New York lawmakers have also passed legislation called the Anti-Waiver of Employment Rights Act, which would broadly void any contract provision that waives or limits an employee’s rights under the New York Labor Law or the New York State Human Rights Law. As of this writing, the bill has cleared both chambers of the legislature but has not yet been signed into law, so it is not yet in effect. It is also worth understanding what this bill would and would not change if it is signed.
As currently written, it includes an exception for severance agreements and for settlements of good faith disputes, meaning its main target is waivers buried in employment contracts before any dispute exists, not releases signed as part of a severance package after a termination. In other words, even if this becomes law, it may not significantly change what you are asked to release in a typical severance agreement.
Given how much nuance is involved, this is an area where checking the current status of the law, or asking an employment attorney directly, is more reliable than assuming how it applies to your situation.
When Discrimination Is Part of the Picture
Sometimes a termination and severance offer arrives at the same time as an employee suspects the real reason was discriminatory. Perhaps you were let go and given a severance agreement, but you believe you were treated unfairly because of a protected characteristic and should be compensated accordingly. An employment discrimination attorney can help you evaluate whether you have rights worth pursuing.
If a severance package has already been offered, Working Solutions Law Firm has severance agreement lawyers on staff who focus on negotiating higher severance pay in cases involving potential employment discrimination.
Before You Sign a Severance Agreement
Look closely at the scope of the release, whether any confidentiality provision touches on a discrimination or harassment related claim, and whether the review and revocation periods you have been given match what the law requires. If your termination was part of a larger layoff, confirm whether the required notice was actually provided. If anything about the timeline feels rushed, that alone is worth raising with an employment lawyer.
A consultation with an employment attorney is always recommended before signing a severance agreement, since certain terms can significantly affect your rights in ways that are not obvious without legal training.
Contacting Working Solutions Law Firm for a case consultation can help you determine whether your severance agreement meets New York’s requirements and whether you need the assistance of an employment attorney. If you would like a second opinion, other firms and resources are also available to help you review a severance offer.