How Long Do I Have to Sign a Severance Agreement? Understanding Your Deadlines
Your employer hands you a severance agreement and asks you to sign it by Friday. Do you really have only until Friday to decide? Often, the deadline is set by the agreement itself, and there is no universal waiting period for every severance offer. However, federal law gives certain employees age 40 or older at least 21 or 45 days to consider an agreement that waives age-discrimination claims.
The Parzivand Law Firm, PLLC, helps employees in Stafford, Sugar Land, and Fort Bend County, Texas, review severance agreements before signing. Attorney Hessam Parzivand can review the deadline, compensation, release of claims, and other terms so you can understand what accepting the offer would mean before time runs out.
Start With the Deadline in Your Agreement
If you are not covered by a law requiring a particular consideration period, the deadline stated in the severance agreement or offer may determine how long you have to respond. That is why you should check the actual acceptance date rather than assume every employee automatically receives 21 days.
Look for the date by which the agreement must be signed and returned, when the offer expires, and any language explaining when the agreement becomes effective. The deadline matters, but so does what you are accepting.
A severance agreement may require you to release legal claims or accept continuing obligations in exchange for compensation or benefits. Knowing how much time remains tells you how quickly those provisions need to be reviewed.
When Do You Get 21 Days to Consider Severance?
The frequently cited 21-day rule does not apply to every severance agreement. It comes from federal protections governing waivers of claims under the Age Discrimination in Employment Act (ADEA).
If you are 40 or older and your employer asks you to waive an ADEA claim, the Older Workers Benefit Protection Act generally requires that you receive at least 21 days to consider the agreement. The EEOC explains the requirements for waiving age-discrimination claims, including the applicable consideration and revocation periods.
You do not have to use all 21 days before deciding. If you sign earlier, however, the decision to shorten your consideration time must meet federal requirements for a knowing and voluntary waiver.
Some Group Terminations Come With 45 Days
If you are 40 or older and the waiver is offered as part of certain exit incentive or other employment termination programs offered to a group or class of employees, the required consideration period increases to at least 45 days. These group programs also carry disclosure requirements.
The employer generally must provide specified information about the group covered by the program, eligibility factors and time limits, and the job titles and ages of individuals selected or eligible and those not selected or eligible within the relevant group. Those disclosures can help you understand the context in which the severance offer was made rather than evaluating the signature deadline in isolation.
What if the Employer Changes the Severance Offer?
A material change to the employer's final offer generally restarts the applicable 21- or 45-day consideration period when the federal age-discrimination waiver rules apply. That can matter if negotiations change the compensation or another significant term shortly before the original deadline.
However, federal regulations also allow the parties to agree that changes to the final offer will not restart the consideration period. If the agreement is not governed by these federal requirements, whether a revised offer changes the deadline will depend on the circumstances and terms of the offer.
Can You Negotiate Before the Deadline?
A deadline does not necessarily mean you must choose between signing the agreement exactly as written and rejecting it. Severance terms may be negotiable, depending on the circumstances and the employer's willingness to make changes. Before the acceptance period ends, compare what the employer is offering with what the agreement requires you to give up.
Through its severance agreement review, The Parzivand Law Firm, PLLC, can evaluate potential claims being released, review the proposed benefits, and advise on possible negotiations concerning compensation or other provisions. Starting that review before the final day gives you time to identify provisions that may warrant discussion and, when appropriate, request changes.
Do You Get Time to Change Your Mind After Signing?
If you are 40 or older and sign a waiver of ADEA claims subject to the federal requirements, you must receive at least seven days to revoke the agreement after signing. This seven-day revocation period is separate from the 21- or 45-day consideration period.
It cannot be shortened by agreement, and the ADEA waiver does not become effective or enforceable until the revocation period expires. Do not assume that every severance agreement automatically comes with this federal seven-day right to reconsider. The requirement applies to qualifying waivers of age-discrimination claims.
Use Your Deadline to Make an Informed Decision
Whether your agreement gives you a few days, 21 days, or 45 days, use the available time to understand what you would receive and what signing would require of you.
Pay particular attention to the release of claims, severance compensation and benefits, confidentiality or non-disparagement provisions, and any restrictions that may affect what you can do after leaving the job. A severance agreement cannot lawfully prevent you from filing a charge with the EEOC or participating in an EEOC proceeding.
If you want to request different terms, starting that discussion before the deadline gives you more room to evaluate the employer's response without having to decide at the last minute.
Get Your Severance Agreement Reviewed Before the Deadline
Attorney Hessam Parzivand has represented both employees and employers in Texas employment law matters, giving him insight into the considerations that can shape a severance agreement from either side.
The Parzivand Law Firm, PLLC, can review the deadline, the compensation being offered, the claims you may be releasing, and terms that could remain important after your employment ends.
If you received a severance agreement in Stafford, Sugar Land, or Fort Bend County, contact the firm before the acceptance period expires to discuss your severance agreement and what the deadline means for your decision.