5 min read

Severance Agreements & Releases

When your employer offers severance, they're usually asking you to sign away your right to sue — and most workers don't know it.

What a severance agreement is

A severance agreement is a contract between you and your employer. In exchange for a payment, you agree to release all legal claims against them. That typically includes discrimination, harassment, retaliation, and wrongful termination claims — often even claims you don't know you have yet.

You don't have to sign immediately

For workers over 40, federal law (the OWBPA) requires employers to give you at least 21 days to consider the agreement and 7 days to revoke it after signing. Employers cannot pressure you to sign on the spot. For workers under 40, the law sets no mandatory waiting period — but you still have the right to review it before signing.

What you give up

Once you sign a valid release, your EEOC claims are almost certainly gone. There are narrow exceptions — like claims that arise after you sign — but courts generally enforce these agreements. The amount of severance offered does not have to be proportional to what your claim would be worth.

What to do before you sign

Have an employment attorney review the agreement. Many offer free or low-cost consultations. The employer's deadline is often negotiable, and the amount offered sometimes is too.

Red flags to watch for

Pressure to sign before leaving the building
Agreement covers claims you "have or may have" — that's intentionally broad
You're over 40 and weren't given 21 days to consider
No mention of your right to consult an attorney
Release covers ADEA (age discrimination) claims — these require specific statutory disclosures to be enforceable

Next up

Constructive Discharge