New York Senate Passes “No Severance Ultimatums Act”: Employers Face New Restrictions on Severance Agreements
4/29/25
On March 4, 2025, the New York State Senate passed S372, the No Severance Ultimatums Act, a bill aimed at protecting employees from coercive severance practices. The legislation is now under review in the Assembly. If enacted, it would impose new procedural requirements on employers offering severance agreements—most notably, mandatory notice of rights, waiting periods, and revocation windows.
Key Requirements Under the Proposed Law
If passed, the bill would amend New York’s Labor Law by adding Section 215-d, which requires employers to:
- Inform employees of their right to consult an attorney before signing any severance agreement;
- Provide at least 21 business days for employees to review the agreement;
- Allow a 7-day revocation period after signing;
- Prohibit employers from using threats or misleading tactics to pressure employees into signing early;
- Automatically void any agreement that violates these provisions.
Importantly, these protections would not apply to severance agreements reached through collective bargaining.
Legal and Practical Implications for Employers
This bill reflects a growing legislative trend toward regulating employment contracts, particularly around end-of-employment negotiations where employees may feel vulnerable. If enacted, it would align New York more closely with federal age discrimination law under the Older Workers Benefit Protection Act (OWBPA), which has long imposed similar waiting and revocation requirements for older workers.
Employers would need to:
- Revise severance templates to include the required disclosures and timeframes;
- Train HR and legal teams on the new compliance protocols;
- Avoid pressuring employees to accept severance terms quickly or without legal consultation.
Even in its current form, the bill signals a cultural and legal shift: severance agreements are no longer just private negotiations—they’re subject to procedural fairness standards. For assistance in updating your severance policies or reviewing your agreements for compliance, contact Sheryl Galler at sgaller@booklawllp.com or Chaim Book at cbook@booklawllp.com.
