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A severance agreement trades legal rights for compensation or other terms. Review is not limited to the headline payment. Employees should understand the release, deadlines, taxes, benefits, confidentiality, non-disparagement, cooperation duties, restrictive covenants, equity treatment, and consequences of breach.
State and local law can differ. The work location, employer, claim, and forum determine which rules and deadlines apply.
The question employees ask
Are you being pressured to sign before you understand the leverage?
Discuss your situationHow the law frames it
The legal line is specific.
A release can waive significant employment claims, but enforceability requirements vary by the law, claim, employee, wording, and circumstances.
Federal law gives workers age 40 and older specific protections for waivers of age-discrimination claims, including consideration and revocation requirements in covered situations.
State and local law can differ, and existing employment, compensation, commission, equity, confidentiality, or restrictive-covenant agreements can materially affect the analysis and leverage.
Warning signs
Facts worth a closer look
- A short deadline paired with pressure not to seek advice
- A release broader than the offered consideration appears to justify
- Unclear treatment of bonuses, commissions, equity, benefits, or unemployment
- New restrictions that did not exist during employment
Evidence
Records that may matter
- The complete proposed agreement and every attachment
- Offer letters, compensation plans, equity documents, and prior agreements
- The termination explanation and evidence related to possible claims
- A list of practical priorities beyond the headline payment
What to do now
Protect the record and the deadline.
- 1Do not sign before reading every incorporated document
- 2Calendar acceptance and revocation dates
- 3Separate amounts already owed from new severance consideration
- 4Identify legal claims and business terms before negotiating
Source review · July 2026
National overview. Matter-specific analysis.
This page is general educational information, not legal advice. The cited federal sources establish a starting point. Coverage, defenses, procedures, and deadlines can change under state or local law and depend on the employer, forum, claim, and facts.
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