Severance Agreements

What is a Severance Agreement?

Severance agreements are contracts made between you and your employer, often as you are being terminated or very close in time to your termination.  Your company usually wants certain key language in your severance agreement.  In almost every circumstance, this will include language prohibiting you from bringing a lawsuit against the company.  Your right to sue is sometimes unfortunately the only leverage you have to keep your employers honest.  Before you give up your right to sue, make sure that you understand what rights you are waiving and what the company is giving you in exchange for that waiver.

My Company is Pressuring Me.  Should I Sign the Agreement, then Consider my Options?


“A waiver in a severance agreement generally is valid when an employee knowingly and voluntarily consents to the waiver.”

Many federal laws are written to give the employee a lot of protection – this one is not.  You may feel like your company has a gun to your head, but you will normally only be able to show that you did not voluntarily sign your name under extreme circumstances, such as literally having a gun held to your head.  One right you are given, however, is the right to take time to think about whether to sign the severance agreement.  How much time that right affords you is interpreted many ways.  If you are unsure about your severance agreement and have an extremely limited time to respond, tell your employer (preferably in writing and verbally) that you want to discuss the matter with an attorney and contact us immediately.

How Do I Know What I’m Giving Up?

Severance agreements are essentially required to have almost uniform language about giving up your rights to sue.  Look for language in the agreement talking about the Age Discrimination in Employment Act, Title VII of the Civil Rights Act, or the Americans with Disabilities Act.  This language is greatly limiting or stopping you altogether from recovering any damages even if you later win a claim against your employer for discrimination, harassment, retaliation, or wrongful termination.

What Can I Get for my Signature?

The law gives a lot of latitude to what both parties can agree to in order to execute a severance agreement, but there are certain items, such as your pension or earned leave, that will normally not be considered enough to justify the severance agreement because you had already earned those items.  If the agreement gives you something you would not have otherwise been entitled to, however, it will be considered a valid agreement, even if you didn’t want what your company gave you.

How do I get my Company to Offer More?

Like any negotiation, you need leverage.  If you think your employer may have terminated you due to discrimination, retaliation, or because you are a whistleblower, then you may have substantial leverage.

Should I Sign my Severance Agreement?

The Kirby G. Smith Law Firm has considerable experience negotiating severance agreements for employees ranging from administrative assistants to vice presidents.  We are aware of the “going rates” for severance agreements and can judge the strength of your company’s offer to you compared to any leverage you may have.  Contact us today for an evaluation and document review so we may review your severance agreement and advise you of what to do next.