Understanding the 21-Day Review Period for Severance Agreements in Arizona Under OWBPA
Under federal law, Arizona employees aged 40 and older must be given at least 21 days to review a severance agreement. Once signed, you have an absolute 7-day revocation period to cancel the agreement and retain your right to sue for age discrimination.
Being laid off is one of the most stressful experiences a worker can face. Often, on your way out the door, Human Resources will hand you a severance package. In exchange for a few weeks or months of pay, you are required to sign a general release waving your right to sue the company for anything-including age discrimination. If you are 40 years of age or older, you are granted special protections under the Older Workers Benefit Protection Act (OWBPA), which amends the Age Discrimination in Employment Act (ADEA). Employers in Arizona must follow these strict federal timelines, or the severance agreement becomes legally invalid.
Employers frequently try to pressure older workers into signing these agreements immediately, hoping they will take the money before realizing they may have a valid discrimination claim. The OWBPA was created specifically to stop this predatory behavior. If you have been handed a severance package in Phoenix, Scottsdale, or anywhere in Arizona, you should never sign it on the spot. Finding a knowledgeable employment lawyer in our United States Attorney Directory is vital to ensure your rights are protected and to negotiate a better exit package.
Step-by-Step Process in Arizona
The rules governing older workers apply across the entire United States, but local enforcement and potential lawsuits will happen right here in Arizona. If your employer fails to provide these mandatory timelines in your Severance Agreement and General Release, the waiver of your ADEA claims is entirely unenforceable.
Step 1: Checking the 21-Day Review Period
If you are being terminated individually, the OWBPA mandates that your employer give you at least 21 full days to consider the severance offer. You do not have to wait 21 days to sign it, but the employer cannot force, pressure, or incentivize you to sign it sooner (e.g., they cannot say "the offer drops by half if you don't sign by Friday"). During this 21-day period, you should have an Arizona employment attorney review the terms to ensure you are not leaving money or benefits on the table.
Step 2: The 45-Day Period for Group Layoffs
If your termination is part of a larger corporate restructuring or reduction in force (RIF) affecting two or more employees, the review period is significantly extended. In group layoff scenarios, employers must give you 45 days to consider the agreement. Furthermore, the company must provide you with a detailed, written list containing the job titles and ages of all individuals selected for the layoff, as well as those in the same department who were not selected. This data allows your attorney to analyze if the company is disproportionately firing older workers.
Step 3: Understanding the 7-Day Revocation Period
Even if you sign the agreement on day one or day twenty, the OWBPA grants you an absolute, non-waivable 7-day revocation period. For exactly seven days after signing, you can change your mind, revoke your signature in writing, and cancel the contract. The severance agreement does not become legally binding, and the employer does not have to pay you the severance money, until this 8th day arrives.
Step 4: What Happens if You Sign Too Early?
If an employer tricked or coerced you into signing a waiver without giving you the 21 days or the 7-day revocation period, the waiver is invalid regarding age discrimination claims. You could potentially keep the severance money and still file an age discrimination charge with the Equal Employment Opportunity Commission Phoenix District Office or the Civil Rights Division of the Arizona Attorney General's Office Phoenix.
How Much Does it Cost to Hire an Employment Lawyer?
Having an attorney review a severance agreement is highly cost-effective and can often lead to a larger payout.
- Severance Review & Consultation: Most Arizona employment lawyers charge a flat fee of $350 to $750 to read the agreement, explain the OWBPA terms, and advise you on potential claims.
- Severance Negotiation: If you hire the attorney to negotiate a higher severance amount, they usually charge an hourly rate of $300 to $500, or they may take a contingency fee (e.g., 25% to 33%) only on the additional money they secure above the original offer.
How Long Does the Process Take?
The initial phase is strictly governed by the 21-day or 45-day OWBPA timelines. If you choose to negotiate for better terms, the negotiation process typically takes 2 to 4 weeks of back-and-forth between your lawyer and the employer's HR or legal department. If negotiations fail and you proceed to file a formal discrimination lawsuit in an Arizona federal or state court, the litigation process can take 1 to 2 years.
Frequently Asked Questions (FAQ)
Does the 21-day rule apply if I am under 40?
No. The OWBPA specific timelines (21/45 days to review, 7 days to revoke) only apply to employees who are 40 years of age or older. If you are under 40, your employer can demand you sign the severance agreement in a much shorter timeframe.
Can the employer withdraw the offer during the 21 days?
Generally, an employer can withdraw a standard contract offer before it is accepted. However, withdrawing it simply to punish an older worker for taking the 21 days allowed by federal law can expose the company to retaliation and discrimination claims.
What if I discover I was replaced by someone younger after I sign?
If you signed a valid OWBPA-compliant waiver and the 7-day revocation period has passed, you have legally waived your right to sue for age discrimination, even if you discover bad actions later. This is why having an attorney investigate during your 21-day window is critical.
How do I revoke my signature within the 7 days?
You must provide written notice of revocation to the employer (usually to the HR director or legal counsel listed in the agreement) before the 7-day period expires. It is best to send this via certified mail or tracked email to prove the date and time.
No reviews yet. Be the first to share your experience!