No Ultimatums: New York State Lawmakers Contemplate New Mandatory Provisions for Severance Agreements

On March 4, 2025, the New York Senate passed Senate Bill S372 (the “No Severance Ultimatums Act” or “S372”).

If enacted, S372 would add a new section to the New York Labor Law requiring New York employers to provide for a 21-business day review period and a seven-day revocation period in all severance agreements. Currently, similar protections are afforded to employees who are over the age of 40 pursuant to the Older Workers Benefit Protection Act (OWBPA), which amends the Age Discrimination in Employment Act (ADEA). Similar protections are also available to New York employees who enter into agreements settling claims of discrimination, harassment, or retaliation, but only if the agreement contains a non-disclosure provision relating to those claims.

Specific Requirements Under Consideration

Under the terms of S372, any severance agreement offered to an employee or former employee will need to:

• contain a notice advising the employee of their right to consult an attorney regarding the agreement;
• provide at least 21 business days for review of the agreement; and,
• acknowledge a seven-day period within which the employee may revoke the agreement.

The intent of the proposed law, as stated in the bill’s Sponsor Memo, is to extend the protections afforded by the OWBPA to all employees in New York, regardless of their age. However, there are a few notable differences: the review period proposed by S372 (21 business days) exceeds the duration required under the OWBPA (21 calendar days). Further, S372 would apply to all employees in New York State, even those working for small employers. The ADEA applies only to employers with 20 or more employees.

If enacted, S372 would permit employees to sign a severance agreement prior to the conclusion of the “revocation period”, provided that the decision to do so is made knowingly and voluntarily, and not induced by the employer through fraud, misrepresentation, by threat, or by incentivizing earlier signature by offering different terms. (We believe that the reference to the “revocation period” here is a misnomer and is intended to mean the 21-day review period, since the true revocation period begins after an employee signs an agreement.) However, no signed agreement will be effective or enforceable until the mandatory seven-day revocation period has expired.

Notably, although S372 would apply to the government workforce as well as private employers,  it would not apply to severance agreements negotiated pursuant to a collective bargaining agreement.

When Would the No Severance Ultimatums Act Take Effect?

After the state Senate passed S372, it was delivered to the Assembly and referred to its Labor Committee. If approved by the lower house and signed by Governor Hochul, the bill’s provisions would take effect immediately. Thereafter, any severance agreement that does not comply with S372 will be deemed void and unenforceable. It is unclear whether the law would have any retroactive effect on existing agreements, particularly those executed in the weeks just prior to the law’s effective date.

For now, S372 is not yet law, and the legislation may be modified as it undergoes committee review in the Assembly. We will monitor the progress of this bill. If it is enacted, we’ll be prepared to revise your template severance agreements and advise on best practices to comply with the new requirements.