Long Island Severance Agreement Lawyer

What severance is in New York

No New York statute requires a private employer to pay severance to every departing employee. A right to severance comes from somewhere specific: an employment agreement, a collective bargaining agreement, a written severance plan or policy, or an agreement negotiated at the end of the job. When none of those exists, the offer is a proposal, and the employer is paying for something, almost always your signature on a release.

That is the first thing to understand about any separation agreement. The number on the first page is the price. The release on page three is what is being bought. A release can extinguish claims you have not yet identified: discrimination under the Human Rights Law or Title VII, retaliation under Labor Law § 215 or § 740, unpaid commissions under the terms of a plan, and more. The Labor Law treats the payment itself as "dismissal pay" for unemployment purposes whether or not the employer was obligated to make it (Labor Law § 591(6)(b)).

What is usually in the agreement

• General release. You release the employer, and usually its officers, affiliates and employees, from claims arising out of the employment and the separation.
• ADEA waiver. If you are 40 or older, a specific waiver of age-discrimination claims, which has to meet the OWBPA minimums below.
• Confidentiality and non-disparagement. Limits on what you can say about the agreement, the employer, or the facts; in discrimination, harassment and retaliation matters, GOL § 5-336 limits these.
• Payment terms. Lump sum or salary continuation, when payments start, and whether they stop if you breach a clause.
• Benefits. When health coverage ends and whether the employer pays any continuation premiums.
• Restrictions. Non-compete, non-solicitation, no-rehire, cooperation in litigation, return of property.
• Characterization and references. Whether the separation is described as a resignation or a termination, and what the employer will say to a future employer.
• Tax and allocation. How each payment is reported. Ask a tax adviser how each payment will be reported before you sign.

Confidentiality: General Obligations Law § 5-336

General Obligations Law § 5-336, last amended in 2023, governs nondisclosure terms when an agreement resolves a claim "the factual foundation for which involves discrimination, harassment, or retaliation." Its rules, in the statute's order:

• The complainant's preference. The employer may not include a term that would prevent disclosure of the underlying facts and circumstances "unless the condition of confidentiality is the complainant's preference" (§ 5-336(1)(a)).
• Time to decide. The term must be provided in writing, in plain English and, if applicable, in the complainant's primary language; the complainant has "up to twenty-one days" to consider it; if confidentiality is the complainant's preference, that preference is memorialized in an agreement signed by all parties, and the complainant may revoke for at least seven days after signing (§ 5-336(1)(b)).
• What it can never block. The term is void to the extent it prohibits or restricts the complainant from initiating, testifying in, assisting with, complying with a subpoena from, or participating in an investigation by a local, state or federal agency, or from filing or disclosing facts necessary to receive unemployment insurance, Medicaid or other public benefits (§ 5-336(1)(c)).
• Future claims. In a contract entered into on or after January 1, 2020, a provision that prevents disclosure of factual information about any future claim of discrimination is void unless it tells the employee it does not prohibit speaking with law enforcement, the EEOC, the State Division of Human Rights, the Attorney General, a local human rights commission, or the employee's attorney (§ 5-336(2)).
• Releases that fail. A release of a discrimination, harassment or retaliation claim is not enforceable if the complainant must pay liquidated damages, or forfeit all or part of the consideration, for violating a nondisclosure or non-disparagement clause, or if the agreement requires the complainant to state that the complainant was not in fact subject to unlawful discrimination, harassment or retaliation (§ 5-336(3)).

Whether a particular severance agreement "resolves a claim" of that kind depends on its facts and its terms. If you raised discrimination, harassment or retaliation before you were let go, read the confidentiality and non-disparagement clauses against this list.

If you were let go after a complaint

A release signed in a severance agreement gives up retaliation claims along with everything else, so value them before you sign.

Labor Law § 215 bars an employer from discharging, penalizing or retaliating against an employee who complained to the employer, the Labor Commissioner, the Attorney General or any other person about conduct the employee reasonably and in good faith believes violates the Labor Law, or who used a legally protected absence. The employee may sue within two years after the violation; the court may order reinstatement or front pay, lost compensation and damages, costs and attorney's fees, and must award liquidated damages of up to $20,000. Section 215 does not apply to employees of the State or its municipal subdivisions.

Labor Law § 740 bars retaliatory action against an employee who discloses or threatens to disclose, to a supervisor or a public body, what the employee reasonably believes is a violation of law, rule or regulation or a substantial and specific danger to public health or safety, or who refuses to take part in it. The claim must be brought within two years after the retaliatory action; the parties are entitled to a jury trial; and the court may order reinstatement or front pay, lost wages and benefits, fees, a civil penalty of up to $10,000, and punitive damages if the violation was willful, malicious or wanton.

A complaint about discrimination is protected by Executive Law § 296(7). Public employees proceed under Civil Service Law § 75-b. Each statute is covered on our employer retaliation page and our whistleblower page.

When negotiation is possible

An offer that arrives with a signature line is still an offer. Terms that commonly move: the amount; lump sum versus salary continuation; the end date of health coverage and who pays continuation premiums; how the separation is described and what references say; the scope of the release; and new restrictions such as a non-compete or no-rehire clause.

What moves an employer is what it is buying. If a claim stands behind the release, its value is the starting point of the conversation. If the agreement misses an OWBPA requirement, the age-claim waiver may not hold, and the employer has to prove it does. If a confidentiality or non-disparagement clause runs into GOL § 5-336(3), the release itself may be unenforceable. None of that is visible from the first page of the offer, which is why the review comes before the counteroffer.

Getting fired raises more questions than the agreement. Our Long Island wrongful termination lawyer page covers when a firing is unlawful and how lost pay is measured, including the duty to look for work.