What to Do When Your Employer Gives You a Severance Agreement

Offered A Severance Package?

Employees presented with severance agreements (sometimes called “separation agreements”) are often pressured by their employer to sign them, and to sign them quickly. Whether you keep getting that annoying DocuSign reminder from HR, or your boss keeps texting you asking for an update, here are some things you should do before signing that agreement:

• Don’t panic. Employees often feel compelled to sign whatever severance is presented to them, out of fear that they are losing their livelihood. Don’t do that. Even if the dollar amount offered is appealing, the other terms of your severance package may not be fair to you. It is virtually impossible to go back and “undo” things once you’ve signed the severance agreement, except under certain very limited circumstances.

• Speak to an attorney about whether you have any possible employment claims, whether for discrimination (based, for example, on race, disability, age, sex, sexual orientation, or political affiliation), harassment (for example, sexual harassment), retaliation for reporting unlawful or illegal conduct, or even for failure to pay overtime or commissions.

• Read the agreement carefully: What specific claims are you releasing? Is there a duty not to disparage (speak badly about) your employer? Is there a confidentiality provision? Is there a provision about what kind of reference your employer will give you? What obligations does the agreement require of you? Can your employer still sue you, even though you are giving up the right to sue your employer?

• Know that, in many cases, if you are forty-years-old or older, the law requires that you be allowed at least twenty-one, and maybe even forty-five, days to review the agreement, and seven days after signing to revoke it.

Engaging an attorney to review your severance agreement is critical, even if you are satisfied with the amount of money you are set to receive. Such agreements are almost always drafted by experienced attorneys, whose job it is to draft one-sided agreements to benefit their employer clients, not you. Ensuring that a lawyer with your best interests in mind reviews your agreement and makes edits to protect you is the best way to maintain your peace of mind and ensure you don’t waive your rights unnecessarily.

Dhillon Law Group represents both employers and employees in severance agreement negotiations. Our attorneys have experience drafting and negotiating such agreements on behalf of companies large and small, executives, and other professionals, and we would be happy to discuss your case with you to see how we can help.