Severance Agreements: What to Check Before You Sign

A severance agreement is a contract, and its essential trade is simple: the employer pays money and benefits; you sign away legal claims. Before signing, check eight things: (1) the release scope — you are almost certainly releasing every claim you could bring, including discrimination and retaliation claims you may not have evaluated; (2) the money and its structure (lump sum versus salary continuation, and what happens to bonuses, commissions, and unvested equity); (3) benefits — health-coverage continuation subsidies and their duration; (4) restrictive covenants — severance agreements frequently smuggle in new or refreshed non-competes and non-solicits; (5) non-disparagement, ideally mutual; (6) the agreed reference and departure narrative; (7) cooperation clauses (future litigation assistance — should be compensated); and (8) repayment/clawback triggers.

When and why the number moves. Severance is rarely legally required — it's offered to purchase the release and reduce risk. Which means the negotiation lever is the value of what you're releasing: tenure, the circumstances of the termination (timing after a complaint, a leave, a disclosure — the patterns from the discrimination playbook), and the strength of any potential claims. Employees over 40 releasing age claims get statutory consideration and revocation periods — commonly 21 days to consider and 7 to revoke — which exist precisely so the agreement can be reviewed; use the time. [LEGAL REVIEW: OWBFA framing.]

The review that pays for itself. An employment lawyer's review of a severance package is typically a flat, modest engagement, and it answers the two questions that matter: is the release buying anything valuable (i.e., do you have claims worth more than the offer), and are the non-monetary terms — covenants, cooperation, disparagement — going to constrain your next job more than the check compensates. The common outcomes are not lawsuits: they're improved packages, narrowed covenants, and clean exits negotiated in a week.

What not to do in the meantime. Don't sign same-day under pressure (the deadline is almost always softer than presented); don't vent in writing to colleagues; and don't take confidential data on the way out — nothing devalues leverage like handing the employer a counterclaim.