Many separation agreements provide a specific timeframe after signing during which the departing employee may cancel, or undo, the agreement. This timeframe allows for reconsideration of the terms and a consultation with legal counsel, if desired. As an example, an individual offered a severance package might sign the agreement but retain the right to nullify it within a defined number of days, typically beginning the day after signing.
The inclusion of this rescission window is critical for ensuring that the agreement is entered into knowingly and voluntarily, especially under laws like the Older Workers Benefit Protection Act (OWBPA), which governs age discrimination waivers. It provides a safeguard against coercion and allows the employee to reverse their decision if, upon reflection, the terms are unfavorable or misunderstood. Historically, this provision has been a key element in upholding the validity and enforceability of such agreements.
