Severance guide
Severance agreement red flags
These are the clauses that come up again and again in severance agreements and are worth a question before you sign. None of them automatically makes an agreement bad — several are standard — but each one changes what the deal is actually worth. If you spot two or three of these in yours, that is the point to get an employment attorney on the phone.
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1.A non-compete that's long, wide, or vague
Eighteen months, nationwide, covering any 'competing business' is a serious restriction on your ability to earn — often in exchange for a few weeks of pay. Ask for the duration and geography to be narrowed to what the company actually needs, and check your state's rules: enforceability varies enormously, and some states bar non-competes for most workers.
2.One-way non-disparagement
You can't speak badly of the company, but nothing stops them from characterizing your departure to a reference-checking employer. Asking for this to be mutual is one of the most commonly granted edits in severance negotiation.
3.A release that reaches into the future
A release should cover claims that already exist as of the signing date. Language releasing claims 'whether known or unknown, now or hereafter arising' can be read to cover things that haven't happened yet, and deserves a direct question.
4.A waiver of unemployment benefits
Agreements sometimes require you to forgo applying for unemployment compensation, or to agree the separation was voluntary. In many states that kind of waiver is restricted or void, and it can cost you far more than the severance is worth.
5.A waiver of the right to file an agency charge
You generally cannot be required to give up the right to file a charge with the EEOC or a state civil-rights agency, or to cooperate with a government investigation. Language that appears to do so is a sign the document wasn't carefully drafted.
6.A short signing deadline
If you're 40 or older and the agreement releases age claims, federal law generally requires 21 days to consider it — 45 in a group layoff — plus 7 days to revoke. A 3-day or 7-day deadline can undermine the release and signals a template used without review.
7.No mention of health coverage
If the document is silent on COBRA or continued insurance, that's not because the employer won't pay it. Several months of premium coverage is one of the most frequently granted additions — but only when someone asks.
8.Silence on money you already earned
Accrued PTO, an earned bonus, unpaid commissions, and expense reimbursements are separate from severance. If the agreement doesn't address them, get them addressed in writing.
9.A permanent no-rehire bar
A clause preventing you from ever working for the company or any affiliate closes off future opportunities, and in large corporate families that can mean dozens of employers. Ask for it to be limited in time or scope.
10.Open-ended cooperation obligations
A requirement to assist with investigations or litigation after you leave can consume real time. Ask whether that time is paid at a reasonable rate, whether travel is covered, and whether the obligation is capped.
What's missing counts too
The absence of terms matters as much as their presence: no explicit advice to consult an attorney, no reference commitment, no agreed departure language, no mutual non-disparagement, no statement that the company won't contest unemployment. Those gaps are usually where the easiest wins are.
The fastest way to know where you stand
Get an employment attorney on the phone — most consultations for severance review are free, and these cases are commonly taken on contingency. Prefer to look first? The free review pulls out your deadline, the money and every restriction in about a minute.
This page is general information, not legal advice. Employment law varies by state and the facts of your situation matter. Talk to a licensed employment attorney in your state before signing or declining an agreement.