Compliance Stuff

The New York State Senate passed the “No Severance Ultimatums Act” (“the Act”), which, if enacted, “prevents employers from giving coercive ultimatums to employees or former employees relating to such employee's severance from employment.” Under the proposed law, employers must: Notify employees of their right to consult an attorney about the severance agreement; Provide employees with a “consideration period” to review the agreement, not less than 21 calendar days; and Provide a seven-day revocation period following execution of the agreement, which would become effective only after the revocation period has expired. Employees may waive the 21-day review period so long as their consent is knowing, voluntary, and not induced by fraud, misrepresentation, or threats by their employer to withdraw or alter the agreement’s terms. The Act does not apply to severance agreements negotiated pursuant to collective bargaining agreements. The changes proposed by the Act are quite progressive....

Employers would have to give all employees in New York time to review and revoke severance agreements under a bill that just passed the state Senate on March 4. The No Severance Ultimatums Act now moves to the Assembly, and if it’s ultimately enacted, the legislation would amend the New York Labor Law to prohibit employers from imposing “coercive ultimatums” in employment severance agreements. Here’s what you need to know about the proposal as it moves through the legislative process. Key Provisions Review Period:   Employers would be required to provide employees a t least 21 business days to review a severance agreement before signing. Time to Revoke:   After signing, employees would have seven days to revoke the agreement. The agreement would only become effective after this revocation period expires. Notice:   Employers would need to inform employees that they have a right on consult with an attorney before signing the agreement. Effective Immediately:   The law...

 The Federal Trade Commission’s (FTC) ban on noncompetition covenants (“noncompetes”) could significantly impact the design and administration of employee benefits and executive compensation arrangements. Quick Hits The FTC’s ban on noncompetition covenants has potential implications for several aspects of employee benefits and executive compensation plans and arrangements, such as Code Section 457(f) plans, restricted stock, severance arrangements, golden parachute payments, and garden leave. The rule takes effect on September 4, 2024 , but a federal district court in Texas recently granted a preliminary injunction staying the enforcement of the final rule as to the parties in the case. The court’s decision, pending a final ruling on the merits by August 30, 2024, has signaled that the FTC’s noncompete rule will not survive judicial scrutiny. Although the U.S. District Court for the Northern District of Texas recently granted a preliminary injunction staying enforcement of the ru...