STOP: Before you sign that Severance agreement, read this!

Losing your job unexpectedly is a gut punch. Whether it’s called a layoff, downsizing, reorganization, position elimination or redundancy, the result is the same—you’re suddenly without a paycheck, trying to process what just happened while figuring out what comes next.

Then, HR hands you a severance agreement (separation & release agreement) and asks you to review & sign it.

If you’re feeling pressure to sign quickly, take a deep breath. This document is a legally binding contract, not just a routine formality. And while it may include financial support, it’s designed to protect your employer’s interests first.

Before you put pen to paper, here’s what you need to know.

A severance agreement lays out the terms of your departure and what you’re getting in return. The specifics vary, but most agreements include:

✅ Severance Pay – How much you’ll receive and whether it’s paid all at once or in installments.

✅ Health Insurance & Benefits – Will your employer cover COBRA for a period of time?

✅ Non-Compete & Non-Solicitation Clauses – Could this limit your ability to get another job in your field?

✅ Confidentiality & Non-Disparagement Clauses – Are you agreeing not to discuss the company or say anything negative about them?

✅ Legal Waivers – Are you unknowingly giving up the right to take legal action, even if you were wrongfully terminated?

At first glance, the document might seem standard, but what’s buried in the fine print matters—and could impact your next job, your finances, and even your ability to speak openly about your experience.

Many people assume that severance agreements are set in stone.

They aren’t.

Employers draft these agreements to protect themselves, not to be fair to you. Severance agreements are legally binding contracts. When you sign, you are agreeing to the terms of the contract in exchange for the severance payment.

If you don’t review it carefully, you could unknowingly:

🚩 Sign away your right to legal action, even if you were discriminated against or wrongfully terminated.

🚩 Agree to a non-compete clause that severely limits where you can work next.

🚩 Miss out on better severance pay or benefits, simply because you didn’t ask.

Even if everything looks reasonable, it’s still worth having a professional review it before signing.

A severance agreement isn’t just paperwork. It’s a contract that can impact your future. Before you sign, consider having an employment attorney review it. They can help you:

🔍 Spot overly broad or unfair terms.

📜 Ensure compliance with state and federal laws.

💡 Understand exactly what rights you’re giving up.

🤝 Identify areas where you can negotiate for better terms.

Many employment attorneys offer a quick review for a flat fee, so you don’t have to spend a fortune to get peace of mind.

Most people don’t realize that severance agreements are negotiable. Just because the company is offering certain terms doesn’t mean those are the best terms you can get.

Here’s what you might be able to improve:

💰 Severance Pay: If you’ve been with the company for a long time or have a strong performance record, ask for more.

🩺 Benefits Extension: See if they’ll extend health insurance or provide a COBRA subsidy.

🚫 Non-Compete Restrictions: If the contract limits your ability to work in your industry, push back on the scope, duration, or geographic restrictions.

🔒 Confidentiality & Non-Disparagement Clauses: These are often one-sided—ask for mutual protection.

📆 Payment Timing: Lump sum payments may be better for tax purposes, while installments might be helpful for steady income—ask for what works best for you.

Even if you don’t get everything you ask for, you won’t get anything unless you try.

1️⃣ Take Your Time – You’re usually given 21 days (or more) to review the agreement (and 7 more days to revoke it if you’re over 40). Don’t rush, but do be mindful of the deadline to consider the agreement. Should it pass before you respond, the agreement may become null & void.

2️⃣ Ask Questions – If something isn’t clear, ask HR and/or an attorney to explain it.

3️⃣ Get Everything in Writing – Any changes or promises must be in the final written agreement. Verbal assurances mean nothing. Ask for a revised agreement before you sign.

A severance package may provide short-term relief, but signing away your rights without a careful review can cause long-term headaches.

You do not have to accept the first offer. You do have the right to negotiate. And you should make sure you’re getting a fair deal.

If you’re feeling lost, you don’t have to navigate this alone. Get the support and information you need to make the best decision for your future.

Your next chapter is waiting—protect yourself before you turn the page.

I’m not an attorney, and this isn’t legal advice. My insights come from 30 years in HR, where I’ve delivered, negotiated, and reviewed more severance agreements than I can count.

My goal is to help you understand what’s at stake, so you can advocate for yourself with confidence.

If you have legal questions, I always recommend consulting an employment attorney to ensure you’re fully protected.