You Have 21 Days to Review That Severance Agreement
If you're 40 or older, federal law gives you 21 days to review a severance agreement before you sign. Here's what the OWBPA requires and what to look for.
You were called into a meeting you didn't expect. There was HR. Maybe a manager you don't usually see. You were handed a document and told it needed to be back within the week.
That timeline is almost certainly wrong, and you don't have to accept it.
If you are 40 years of age or older, the Older Workers Benefit Protection Act gives you a mandatory minimum of 21 calendar days to consider any severance agreement that asks you to waive claims under the Age Discrimination in Employment Act. This is not a courtesy your employer is extending. It is a federal legal requirement.
An agreement signed under pressure before the 21 days have elapsed — even if the signing was voluntary — may be unenforceable as a waiver of age discrimination claims.
What the OWBPA actually requires
The Older Workers Benefit Protection Act was enacted in 1990 as an amendment to the ADEA. Its core requirement, for workers 40 and over, is that any valid waiver of ADEA claims must:
- Be written in plain language the worker can understand
- Specifically refer to rights under the ADEA
- Not waive claims that arise after the agreement is signed
- Be in exchange for something of value beyond what the worker is already entitled to
- Advise the worker in writing to consult an attorney
- Give the worker at least 21 days to consider the agreement
- Allow a 7-day revocation period after signing
All seven of these conditions must be met for the waiver to be valid. If the employer pressures you to sign in five days, the resulting ADEA waiver is not enforceable — even if you signed. The 21-day period cannot be shortened by employer pressure, contract language, or verbal agreement.
The 7-day revocation window
After you sign, you have 7 calendar days to change your mind. No reason required. The employer cannot waive this window in the agreement text, cannot offer you extra money to skip it, and cannot argue that "circumstances changed" to retroactively bind you sooner.
The 7 days starts from the day you sign, not the day the employer countersigns. Get the date of your signature documented clearly.
What you're actually waiving
Most severance agreements include a general release of all employment-related claims — not just age discrimination, but potentially Title VII claims, disability discrimination, FMLA retaliation, state-law wrongful termination claims, and more. The OWBPA's protections specifically govern the ADEA waiver within that broader release.
Before signing, identify what claims you might have that aren't ADEA-related. The 21-day window applies to the ADEA piece. For other claims, review the release language with an attorney.
What to look at while you have the 21 days
The severance payment is usually the first thing people look at. It's often not the most important thing.
Non-disparagement scope. Does it bind only you, or does the company also commit not to make disparaging statements about you? One-sided non-disparagement clauses are common and negotiable.
Reference policy. Will the company confirm employment dates and title only, or will a former manager give a substantive reference? Get the agreed-upon reference language in writing.
Equity treatment. What happens to unvested shares or options? Acceleration, extended exercise windows, and cashout provisions are all negotiable.
Non-compete and non-solicitation. Scope, duration, and geography. Courts in California, North Dakota, Minnesota, and a growing number of other states won't enforce non-competes at all — but they still appear in agreements regularly.
Cooperation clause. If the company later faces litigation, are you required to assist them? Get the scope limited and ensure it doesn't interfere with new employment.
Getting a number to benchmark against
Before you decide whether the payment is fair, look at what others received in comparable situations. The Separation Index's Benchmark page aggregates confirmed, anonymized data by industry and tenure.
You can also look at the company's separation score. If other employees have submitted reports about how this company handled their exits, that context matters when you're evaluating whether the package you're being offered reflects their actual practices.
The information on this page is for general education only and does not constitute legal advice. If you are considering signing a severance agreement, consult a licensed employment attorney in your jurisdiction.
By The Separation Index Research Team
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