Losing a job is stressful, and a severance offer can feel like a relief. But a severance agreement is a legal contract, and what you give up by signing it may matter as much as what you receive. Once it is signed, it is usually very difficult to undo.
What a severance agreement usually includes
Most severance agreements offer money or benefits in exchange for promises from the employee. Common terms include:
- A release of claims, which usually waives your right to sue the employer for anything that happened during your employment;
- Non-compete or non-solicitation provisions that may limit where you can work next;
- Confidentiality and non-disparagement clauses;
- Terms about benefits, such as health insurance continuation, bonuses, commissions, and stock or retirement plans; and
- Deadlines for accepting the offer.
Why a review matters
A severance agreement may ask you to give up claims you don’t know you have, such as unpaid wages or overtime, discrimination, or retaliation. Its restrictions may affect your next job. And the amount offered is not always final; employers sometimes improve an offer when legitimate concerns are raised.
A review gives you a clear picture of what you are being offered, what you are being asked to give up, and whether the terms are fair for your situation.
For employers
A severance agreement only protects a business if it is properly drafted. We help employers prepare separation agreements that are clear, enforceable, and suited to the circumstances.
Specific legal requirements, and why they matter
Severance agreements are subject to highly specific legal requirements, and some types of releases are valid only if particular conditions are met. The wording of a release, a restrictive covenant, or a confidentiality clause can have significant legal and financial implications for years to come.
Our attorneys are experienced at reviewing and drafting severance agreements to the correct legal specifications and tailoring our advice to fit your needs. Because these offers often come with a deadline, contact us as soon as you receive one.
Related services
Learn more about our employment law and wage dispute services.
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This article provides general information only. It is not legal advice, and reading it does not create an attorney-client relationship. Every situation is different; please consult an attorney about yours.