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Patrick, Esq.
Patrick, Esq., Lawyer
Category: California Employment Law
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Once my company gives me the severance pagage do I have 21

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Once my company gives me the severance pagage do I have 21 days to reach a better agreement and can they lower that package after the clock is running on the 21 day's ?
Hello and thank you for entrusting me to answer your question.

I am sorry to hear that you are being let go. The answer to your question is a tad bit complicated, as it involves a nuanced interpretation of the Age Discrimination in Employment Act. I will do my very best to explain, but if require further clarification feel free to let me know.

Employers who offer severance packages which include waivers of an employee's right to sue under the Age Discrimination in Employment Act are required by law to provide a 21 day period for the employee to review and consider the terms of the waiver. (29 C.F.R. § 1625.22 et seq.) Since you are being afforded a 21 day consideration period, I will assume that is because your severance proposal includes such a waiver.

Section 1625.22 clearly indicates that an employer may not threaten to withdraw a severance offer with an ADEA waiver during the 21 day period in order to induce the employee to sign the agreement. Specifically, section 1625.22(e)(6) states:

"An employee may sign a release prior to the end of the 21 or 45 day time period, thereby commencing the mandatory 7 day revocation period. This is permissible as long as the employee's decision to accept such shortening of time is knowing and voluntary and is not induced by the employer through fraud, misrepresentation, a threat to withdraw or alter the offer prior to the expiration of the 21 or 45 day time period, or by providing different terms to employees who sign the release prior to the expiration of such time period."

While this section prohibits an employer from making THREATS to withdraw or alter the severance, it does not prohibit actual withdrawal or modification. This is a very important distinction.

Absent certain limited circumstances involving mass-layoffs as prescribed in the federal WARN act, an employer is under no obligation to provide laid off employees with severance of any kind. Thus, an employer--even one under the circumstances you have described--can simply choose not to offer severance. Once they DO decide to offer severance, however, and that severance includes a waiver of the employee's right to sue under the ADEA, the employer must comply with section 1625 which prohibits threats of withdrawal or alteration of the severance in order to induce an employee to sign.

All of this, to answer your question simply and directly, means that on a purely technical level, your employer can revoke or modify your severance offer at any time. However, if they are threatening to revoke your severance offer, or modifying it in an effort to coerce you into accepting before it is modified again (this would be hard to prove), that would be illegal.

If your employer materially alters the severance (meaning changes a significant term and makes more than just a superficial change), which again they have the right to do if they are not doing so to coerce you into accepting, the 21 day period begins running again from the beginning.

Please do not hesitate to let me know if you have any questions or concerns regarding the above and I will be more than happy to assist you further.

If you do not require any further assistance, I would be most grateful if you would remember to provide my service a positive rating, as this is the only way I will receive credit for assisting you.

Finally, please bear in mind that none of the above constitutes legal advice nor is any attorney client relationship created between us.

Very best wishes and happy holidays to you.
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