The New York Legislature has passed two significant employment-related bills that are currently awaiting Governor Kathy Hochul’s signature. If signed into law, both bills will take effect immediately and will affect employers throughout New York State. Accordingly, employers should be aware of these proposed legislative changes and begin evaluating whether revisions to their employment agreements, policies, and practices may be necessary to ensure compliance. A summary of each bill is provided below.
I. The No Severance Ultimatums Act — S372A/A6480
The act, if accepted in its current form, would protect current and former employees when an employer offers a severance agreement. Under the law, employers cannot coerce or rush current or former employees into signing a severance agreement. While the act incorporates the familiar 21-day review period and seven-day revocation period, it seeks to create a new compliance obligation that would require employers to notify such employees that they have the option to consult with an attorney before signing the severance agreement. Failure to comply with these requirements would render the severance agreement void and unenforceable. Please note that these requirements do not apply to severance agreements negotiated pursuant to a collective bargaining agreement that specifically acknowledges this act’s provisions.
Legislative Intent
The legislature aims to address the circumstances in which an employer can force a current or former employee into considering an agreement on the spot, with no additional time to review it themselves or with legal counsel. This lack of statutory protection for employees under age 40 exists because the federal Older Workers Benefit Protection Act requires employers to provide employees aged 40 and older with a 21-day review period and a seven-day revocation period, while offering no comparable protections to younger employees. Therefore, the goal of the act is to expand protection to all severance agreements to cover employees regardless of age.
Implications for Employers
Once enacted, employers would be required to update their severance templates and procedures. This includes (1) adding clear notice of review, attorney consultation, and revocation rights; (2) ensuring employees are not pressured to sign early; and (3) checking union agreements to make sure collective bargaining exceptions are documented if applicable. Employers should ensure that HR and managers understand that employees have the right to use the full consideration period without being rushed or told the offer may be withdrawn.
II. The Anti-Waiver of Employment Rights Act — S4424/A5411
The act, if accepted in its current form, would bar employers from including clauses in pre-dispute contracts or agreements that ask employees to waive their rights under New York’s Labor Law or Human Rights Law. The act would invalidate express or implied language that waive or limit an employee’s substantive or procedural rights, remedies, or claims, subject to certain exceptions.
Exceptions
The act has limited exceptions, including:
i. Settlement of Genuine Disputes: If an employee independently raises a genuine dispute and the parties settle in good faith, they may agree to include a waiver in the settlement agreement waiving these rights.
ii. Post-Employment Agreements: An agreement entered upon or following the termination of an employee’s employment may include a waiver of these rights.
iii. Collective Bargaining Agreements: The bill would not apply to dispute resolution procedures contained in collective bargaining agreements or to waivers that another statute expressly authorizes in those agreements.
iv. Federal Law Preemption: The provisions of this act do not apply where the provisions would be preempted by federal law.
Legislative Intent
The legislature seeks to strengthen the labor law and the human rights law by limiting when such provisions can be waived.
Implications for Employers
Employers should review and revise employment agreements, policies, and contracts to ensure they do not try to limit employee rights.
For guidance on how these bills could impact your business, please contact Mercedes Colwin or a member of GRSM’s Employment practice. This legal alert was authored by Partner Mercedes Colwin and Law Clerk Joey Hamui.