Be sure employee has sufficient time to consider severance agreement

Although you may be in a hurry to usher a departing employee out the door, beware of allowing an employee to sign a severance agreement before they’ve had time to really think about it. Under the federal Age Discrimination in Employment Act (ADEA), an employee who is at least 40 years old must be given a specified amount of time to consider a severance offer before agreeing to waive their rights. For individual terminations, employment law dictates that you must give an employee at least 21 days to consider the offer; for a group termination, you must provide a 45-day consideration period.

Employees often want to jump the gun and sign a severance agreement before the consideration period is complete. In theory this is okay, as long as they were given sufficient time to consider the agreement and weren’t under duress or pressure to sign early. In one recent employment law case, an employee chose to sign a severance agreement before the end of the consideration period, but later said he signed it “hastily” and under “immense pressure.” While the facts of the case indicate that the employee was given ample time to consider the release, a court is allowing him to argue his case to a jury as to why the agreement shouldn’t be enforced (Lamberti v. Motorola Solutions, Inc., SDNY, Jan. 2013).

Tips: Don’t allow an employee to sign an agreement unless you’re certain they’ve had sufficient time to read it and consider the effects of signing. At the very least, you should require an employee to take 24 hours to think about the agreement before you’ll accept their signature on the document. See our model “Termination Release” (1578) and contact your Vigilant representative for help with human resource consulting, and legal compliance assistance with specific employment situations.