Navigating Timeframes in Severance Agreements: Understanding Consideration Periods
Severance Agreement Consideration PeriodsWhen you are considering a severance agreement, the significant exchange of money for a comprehensive release of legal claims against an employer demands thoughtful consideration. Common questions revolve around the timing of severance agreement consideration—specifically, how much time employers are required to provide and the consequences if the stipulated deadline is missed without reaching a decision.
How Much Time Should You Have to Consider a Severance Agreement?Timeframes for contemplating and accepting severance agreements vary. In some cases, specific regulations apply, for example for those aged 40 and above under the Age Discrimination in Employment Act (ADEA). The ADEA mandates a 21-day consideration period, with an additional seven days post-signing to revoke acceptance. Beyond ADEA-related claims, employers' requirements differ, ranging from a common minimum of one week to extended periods of up to 45 days.
Beyond specific statutory requirements like the ADEA, the general rule is that the time for consideration must be "reasonable." Rushed decision-making may render the release involuntary or made under duress, potentially allowing employees to bring back released legal claims. How Firm is the Severance Acceptance Deadline?Importantly, the deadline's rigidity is a misconception; it merely reflects the period during which the employer commits to keeping the offer open. Employers can retract or extend the deadline, especially if negotiations or legal advice discussions are ongoing.
Understanding that response deadlines are not absolute opens the door to negotiation and legal consultation. Seeking legal advice to enhance the terms or negotiate a different severance amount can prompt deadline extensions, fostering a more informed and comprehensive discussion. |
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What Happens if You Miss the Severance Acceptance Deadline?
This happens, usually because it can take a little time to find the right attorney to advise you on this situation, and they in turn may need some time to thoroughly review and give you their best advice.
As noted above, the best practice in that case is to have your attorney ask for an extension, or ask for one yourself. If the date has already passed, what that means is you have given up the guaranteed right to the offered severance, but you retain all of the rights you had to bring legal claims against your employer.
This is important to remember when the severance amount is small. Often people feel pressured by the deadline, when the truth is they had no intention of accepting the offer. In that case, you have as much time as afforded by the applicable statutes of limitations (300 days for discrimination, 2-3 years for almost everything else) to articulate a legal claim to your employer and seek to negotiate a settlement.
Finally, if you are over 40 and the severance contains a release of claims under the ADEA, it should also contain a seven day revocation period, which can be used to negotiate if you end up signing by the deadline but have doubts.
As noted above, the best practice in that case is to have your attorney ask for an extension, or ask for one yourself. If the date has already passed, what that means is you have given up the guaranteed right to the offered severance, but you retain all of the rights you had to bring legal claims against your employer.
This is important to remember when the severance amount is small. Often people feel pressured by the deadline, when the truth is they had no intention of accepting the offer. In that case, you have as much time as afforded by the applicable statutes of limitations (300 days for discrimination, 2-3 years for almost everything else) to articulate a legal claim to your employer and seek to negotiate a settlement.
Finally, if you are over 40 and the severance contains a release of claims under the ADEA, it should also contain a seven day revocation period, which can be used to negotiate if you end up signing by the deadline but have doubts.
Conclusion
Navigating the timeframes in severance agreements requires a nuanced understanding of legal requirements, especially concerning ADEA-related releases. Whether the consideration period is a standard week or an extended 45 days, recognizing the flexibility in response deadlines empowers employees to engage in meaningful negotiations and make well-informed decisions about their severance packages.
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Emily Smith-Lee is the owner and founder of slnlaw. She is a 1996 graduate of Boston College Law School. She was previously a partner at the Boston office of a large international firm, where she worked for thirteen years before starting the firm that became slnlaw in 2009. She has been recognized as Massachusetts Superlawyer each year since 2013, and in 2018 earned recognition as one of Massachusetts Lawyers Weekly's Lawyers of the Year. She has written a book on employment law: Rules of the Road, What You Need to Know About Employment Laws in Massachusetts, and helped thousands of clients on both the employee and employer side with severance and non compete review and negotiation, wage and hour, discrimination and retaliation disputes, workplace sexual harassment situations, and advice about employment law generally.
Rebecca Rogers: Rebecca is a 2006 graduate of Boston College Law School, and has worked with slnlaw since 2013. She previously worked as an intellectual property litigation attorney for Fish & Richardson in Boston, Massachusetts, and clerked for the Massachusetts Supreme Judicial Court. Rebecca has helped clients with wage and hour disputes, employment discrimination, harassment and retaliation claims, review and negotiation of severance and non compete agreements, and advice to both employees and employers about navigating complex employment situations.
Jenna Ordway: Jenna is a 2013 graduate of Quinnipiac Law School, and also earned an LLM in Taxation from Boston University in 2015. She has been affiliated with slnlaw since 2011, first as a law clerk and then as an attorney. Jenna has been recognized since 2019 as a "Rising Star" by Massachusetts Superlawyers. Jenna has helped clients with review and negotiation of severance and non compete agreements, wage and hour disputes, discrimination, harassment and retaliation claims, and advice to small business owners about employment law and other business matters.
Elijah Bresley: Eli is a 2014 graduate of Seton Hall Law school, and has worked with slnlaw since 2020. He previously worked for a boutique employment law firm outside of Boston, and then for the Labor and Employment department of a large Boston firm. He also spent a year clerking for the judges of the Superior Court in Hartford, Connecticut. Eli has helped clients on the employee and employer side with all varieties of employment law issues, including employment discrimination, harassment, retaliation, and wage and hour issues, litigation in MCAD and state and federal courts, and advising employers about employment policies and practices.
Sharleen Tinnin: Sharleen is a 2010 graduate of Northeastern University School of Law, and has been with slnlaw since 2023. Prior to joining slnlaw, she worked with King, Tilden, McEttrick & Brink, P.C. on complex civil litigation matters. She previously worked for the United States Department of Justice, and received an "Excellence in Justice" award in 2017. Sharleen has helped clients with wage and hour, discrimination, harassment and retaliation disputes, review and negotiation of severance agreements, and litigation in MCAD and state and federal courts on employment related issues.
How We Can Help
Empower yourself with insights into severance agreement timelines. Whether you seek clarity on legal requirements, need guidance on negotiation strategies, or want to understand the repercussions of missed deadlines, our expertise ensures you navigate the process with confidence. You can use the button below to schedule a call back from a member of our team, or give us a call at 781-784-2322.
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