Hi, my name is Alex Granovsky and I’m the Managing Member of Granovsky & Sundaresh. We’re a law firm that specializes in severance agreements. One of the most frequent questions I’m asked, as an employment lawyer, is “what’s the deal with the 21 and 7 day consideration or vacation period in severance agreements?” Let me break that down. Those are a product of protections against age discrimination in employment. The federal law on that is the Age Discrimination in Employment Act. The ADEA, which was then supplemented by the Older Worker Benefit Protection Act, which put in certain protections against releasing or letting go of claims against an employer for age discrimination. Some these protections include sufficient time to consider whether or not you want to release those claims and sufficient time to revoke your release.
So here’s how it works. If employees over the age of 40, then by law, in order to release their claims under the ADEA they have to be given at least 21 days to consider the agreement. They could sign the agreement on day 1, day 2, day 10, day 15, day 21 – any point along the way. Then, once they sign it, even if they sign it in blood, saying “I love this agreement, I’ll never revoke it, I want it forever”. For seven days, the employee has a unilateral right to revoke the agreement. The employer now is locked inbut the employee for seven days can say “No, you know what, I want out of this.”and the agreements tend to have language explaining how they can get out it. On day 8, both sides are locked in.