Reading a Severance Agreement Before You Sign

The release is the whole document

If you are forty or over, federal law gives you twenty-one days to consider a severance agreement and seven days to change your mind after signing. Most people use neither. The pressure in the room is a negotiating posture rather than a deadline, and knowing that is worth more than any clause-by-clause reading.

Everything in the document is terms arranged around a single exchange: money in return for giving up your right to sue. Read the release clause first and read it properly, because it is the thing you are actually agreeing to. The rest is detail around that one trade.

Look specifically at how broad the release is. Most cover all claims known and unknown up to the date of signing, which is standard. Some reach further than they lawfully can, and some carve out claims that cannot be waived at all. The breadth tells you a great deal about how the document was drafted.

What cannot be waived, whatever the document says

Your right to file a charge with a government agency, or to cooperate with one, cannot be signed away. Agreements frequently state that you waive any monetary recovery from such a proceeding, which is a different thing and generally lawful. The right to report is not waivable regardless of the wording.

Three more things sit outside any release. The seven-day revocation period for age claims if you are forty or over. Vested retirement benefits, which are yours already. And your eligibility for unemployment insurance, which is a matter between you and the state.

If an agreement appears to remove any of those, treat that as information about the document as a whole rather than as a single clause to negotiate. A drafter reaching for something unwaivable has usually reached in other places too. Read the remaining clauses with that in mind rather than in isolation.

The clauses that cost you later

Non-compete clauses are the first to check, and the check is on three things: duration, geography, and how the restricted activity is actually defined. Enforceability varies enormously by state and several restrict or bar them outright. A clause that would not survive in your state is still a clause you have signed.

Non-solicit clauses are frequently broader than people expect, sometimes covering former colleagues as well as clients. Non-disparagement is worth checking for mutuality, because a one-sided version is common and asking for it to run both ways is a reasonable request that is frequently granted. Employers expect the question and rarely treat it as a fight.

Two more appear regularly. Cooperation clauses require your assistance in future litigation, sometimes for years, so ask whether your time is paid. And confidentiality about the agreement itself is standard and worth noticing, because it prevents you comparing terms with colleagues who received different ones.

The group disclosure, if you are 40 or over

In a group termination the employer must give you a list of the job titles and ages of everyone selected, and everyone in the same decisional unit who was not selected. That attachment arrives with the agreement and is easy to skip past. It usually looks like an administrative appendix rather than evidence.

It is the most informative document you will receive in the entire process. It shows whether the selection has an age pattern, which is precisely why the law requires it and why the consideration period is forty-five days in a group rather than twenty-one. The extra time exists specifically so that list can be examined.

People routinely sign without reading it, which defeats its entire purpose. Read it before anything else in the envelope, and if a pattern is visible, that is the point at which advice becomes worth paying for. An hour of a lawyer’s time against a visible pattern is cheap.

Check what happens to everything else

Equity needs three answers: what vests, what is forfeited, and how long you have to exercise anything vested. Health coverage needs two: when it ends and whether the employer contributes to continuation. Both sets of answers are frequently absent from a first draft.

Accrued and unused vacation is next, and several states require it to be paid out regardless of what any agreement says. Any bonus already earned but not yet paid belongs in the same category. It is frequently omitted and frequently recovered simply by asking.

These are the terms most often missing rather than most often refused. Adding them is usually a matter of raising them rather than negotiating hard, and the first draft is not a considered position on any of them. It is a template that nobody has yet applied to your situation.

The timeline you actually have

If you are forty or over, the statutory position is clear. Twenty-one days to consider an individual agreement, forty-five days in a group termination, plus seven days to revoke after signing. The revocation period cannot be waived under any circumstances.

Any agreement pressuring you to sign immediately is not describing the law accurately. That is worth noticing calmly rather than confrontationally, because it usually reflects an HR process rather than an intent to mislead. The person delivering it is often working from a script.

Under forty there is no statutory consideration period, and you can still ask for time. It is almost always given. The urgency in the room is a posture and the document will still be there on Monday.

Before you sign anything

Have an employment lawyer read it. Most will review a severance agreement quickly and many offer the first assessment at no cost. Against a document binding you for a year or more, that is the cheapest decision available in the entire process.

Take copies of everything first, because access is usually cut on the last day and sometimes without warning. The agreement itself, the group disclosure, your pay records, benefits statements, equity documents and anything documenting your work. Anything you might need to prove later belongs in that list.

Send them to a personal email address rather than leaving them in a work account you are about to lose. That takes ten minutes and it is the difference between having a record and remembering one. A recollection is worth very little in any later dispute.

What is actually negotiable

More than people assume, and the amount is usually not the most movable part. The separation date is frequently adjustable, and moving it past a vesting event or into the next month for coverage purposes can be worth more than an extra week of pay. Check your vesting dates before proposing any alternative date.

Continued benefit contributions, a neutral reference, the wording of any announcement, and the removal or narrowing of a non-compete are all commonly negotiated. So is converting a one-sided non-disparagement clause into a mutual one. Each of those is a specific ask rather than a general complaint.

Ask for two or three specific things with a reason attached rather than asking for a better package. This is general information rather than legal advice, and severance terms turn on your state and your specific circumstances. An employment lawyer in your state can tell you which apply.