Should I sign a severance agreement?
Employment · 3 minute read
Severance is normally payment in exchange for giving up your right to sue. Whether that is a good trade depends on what you would be giving up.
What you are actually being offered
A severance agreement is a contract. The employer pays something it is usually not otherwise required to pay, and in return you release your claims against it.
That release is the point of the document. Everything else is detail.
Read the release carefully
Releases are typically broad and cover claims you know about and claims you do not. Check whether it covers only employment claims or everything, and whether it is mutual.
Certain rights generally cannot be signed away, including filing a charge with a government agency, though an agreement may limit what you can personally recover.
The clauses that outlast the money
Non-disparagement, and whether it applies to the employer too. Confidentiality, and whether you can even say you received severance. Non-compete or non-solicitation terms, which affect your next job and whose enforceability varies by state.
Cooperation clauses requiring future time from you. And what reference the employer will give.
Time to consider
Employees over 40 are generally entitled to a minimum consideration period before signing a release of age claims, and a short revocation period afterwards, under federal law. Group layoffs carry additional disclosure requirements.
Whatever the rules, do not sign on the spot. An employer pressing for an immediate signature is itself information.
It is often negotiable
Amount, payment timing, continued health coverage contributions, the reference, removal of a non-compete, the wording of the announcement, and unused vacation are all things people routinely ask to change.
Asking politely and specifically, with a reason, works more often than people expect.
When to get it reviewed
If you think you may have a real claim — discrimination, retaliation, unpaid wages — the release is worth more than the payment, and you should not sign it without advice.
Even without a claim, a single review of the agreement is a small, defined task, and it is exactly the kind of document review most legal plans include.
Quick questions
- Can I negotiate a severance offer?
- Often yes. Amount, benefits continuation, references, timing and restrictive covenants are all commonly negotiated.
- How long do I have to decide?
- It depends. Employees over 40 are generally given a minimum period to consider a release of age claims plus a short revocation period. Otherwise the deadline is whatever the employer sets.
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This page is general education, not legal advice, and reading it does not create an attorney-client relationship. Laws differ by state and every situation is different. For advice about your own situation, speak with a licensed attorney.
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