The paucity of court cases addressing this situation suggests that a change of heart regarding severance pay at this stage of separation from employment is relatively rare.
Nonetheless, a few relevant cases and traditional common law principals of contract formation provide the following basic answer: An offer to enter into a contract may be revoked at any time before it is accepted. The offer, in and of itself, does not create an irrevocable power of acceptance on the part of the offeree.
Therefore, a severance offer can be revoked at any time, including within the 21-day period, prior to formal acceptance by the departing employee.
In the ordinary course of separations with a severance offer, the departing employee should be provided the full 21-day decision period and not be pressured to sign sooner.
But where sufficiently negative information is discovered before the offer has been accepted via a signed agreement, withdrawing the offer should be done without delay and with clear notice to avoid misunderstanding of what is happening and why.
And by the way, I don’t recommend challenging his unemployment claim. If the misconduct was not known beforehand and, as a result, the decision to terminate was not based on the misconduct, you will be wasting your time attempting to disqualify your former employee from receiving benefits.
Connecticut unemployment decisions are consistent and clear in stating that unless the actual reason relied upon to fire the worker represents a disqualifying reason, you cannot cite misconduct discovered post-termination as a basis to establish a disqualifying misconduct discharge.
Whatever emotional satisfaction or sense of justice you may seek in tilting at this windmill will quickly dissipate when you realize how much time you wasted pursuing a losing appeal. Instead take satisfaction in the confirmation that your former employee was even more unacceptable than you initially thought.