The meeting is short. Somebody from HR says the role is being eliminated, hands you a folder or forwards an email, and the conversation is over in under ten minutes. Inside there is a document with your name on it, a number, and a date by which you are supposed to sign.
Most people read the number first and the date second, and then spend the evening trying to work out whether the number is any good. That is the wrong order. The date usually matters more, because it is often further away than it looks, and almost everything useful you can do with this document depends on having time to do it.
How long you actually have
If you are 40 or older, federal law sets a floor. Your employer wants you to give up the right to sue for age discrimination, and to buy that they have to follow rules written into the Older Workers Benefit Protection Act. The EEOC states them plainly: a waiver "must provide the employee with at least 21 days to consider the offer", it "must give an employee seven days to revoke his or her signature", and it "must advise the employee in writing to consult an attorney before accepting the agreement".
The seven days run after you sign. You can sign on Monday, read it properly on Wednesday, decide you have made a mistake, and withdraw. The agreement does not take effect until that week has passed. If you were let go as part of a group — a layoff, a restructuring, an exit incentive programme — the consideration period becomes 45 days instead of 21, and your employer has to give you information about who else was selected and their ages.
Under 40, none of this applies. The 21 days, the 45 days and the revocation week come from an age discrimination statute, and they protect people the statute covers. A 32-year-old can be handed a severance agreement on Tuesday with a Friday deadline, and that is lawful. You can still ask for more time, and employers often give it, but you are asking rather than claiming something you are owed.
Where the deadline on your paper is shorter than the law requires and you are over 40, the usual consequence is narrow: the age discrimination waiver fails, and the rest of the release can still stand. That is worth knowing before you treat a short deadline as proof the whole document is void.
What the money is paying for
No federal law requires an employer to pay severance at all. When they do, they are buying something, and the thing they are buying is set out in a section usually headed Release of Claims or Waiver. Reading it tells you what the number is actually for.
A standard release covers every legal claim you might have arising out of your employment, whether or not you currently know about it. Discrimination, harassment, retaliation, unpaid bonus, breach of contract, wrongful termination — all of it, released on the day you sign. Some releases go further and cover claims that arise later, or extend to the company’s parent, subsidiaries, officers and insurers, which is why the sentence often runs half a page.
This is ordinary. Nearly every severance agreement in the United States contains one, and an employer paying money to end a relationship wants certainty that the relationship has ended. The question for you is whether the number is a fair price for the specific claims you are giving up, which depends entirely on whether you have any.
What you keep whatever you sign
A release is narrower than it reads. Several things survive it, and knowing which ones changes how you value the offer.
You can still file a charge with the EEOC. The agency is explicit that after signing a waiver "you can still file a charge with the EEOC if you believe you were discriminated against", and that you cannot be "required to return your severance pay — or other consideration — before filing a charge". A clause saying otherwise does not change this. What the release does take away is your ability to collect money for yourself from that claim, which is a real loss, but the right to report and to participate in an investigation stays with you.
Wages you already earned are not part of the bargain either. Your final pay for hours worked, and in many states accrued unused vacation, are owed to you under state law regardless of whether you sign anything. An employer who makes your last paycheck conditional on signing has it backwards, and in several states that is itself unlawful.
Money already vested in your retirement account remains yours, your right to continue health coverage under COBRA is not something severance buys, and unemployment benefits are decided by your state agency rather than by your employer. Severance can change the timing of those benefits depending on where you live and how the payment is structured, so apply and let the agency work it out instead of assuming you are disqualified.
Reading the rest of the document
After the release, a handful of clauses do most of the work. They tend to appear in roughly this order.
| Clause | What to look for |
|---|---|
| Payment terms | Lump sum or instalments, and the date. Instalments that run for months give the employer leverage if a dispute comes up later, and they stop if the company fails. |
| Confidentiality | Whether you are barred from telling anyone the terms, and whether that extends to the circumstances of your departure. Check it does not stop you talking to a lawyer, a tax adviser, or your spouse. |
| Non-disparagement | Usually one-way. Ask for it to be mutual, and ask what the company will say to anyone who calls for a reference. |
| Non-compete and non-solicit | Often carried over from your original contract, sometimes widened here. Enforceability varies enormously by state, and a clause nobody would enforce still deters employers from hiring you. |
| References | Many agreements say nothing. Getting a named contact and an agreed form of words costs the company nothing and is worth asking for. |
| Cooperation | A promise to help with future litigation or audits. Reasonable in principle; ask whether your time will be paid and whether there is a cap on it. |
One point on the gag clauses. In 2023 the National Labor Relations Board held in McLaren Macomb that confidentiality and non-disparagement terms drawn broadly enough to stop employees discussing working conditions can violate federal labour law for most non-supervisory private sector staff. That decision was still standing when this was written, though the Board’s current General Counsel has asked it to be overturned and it may not survive. Treat it as a reason to question a sweeping gag clause, not as a guarantee that one is unenforceable.
Asking for changes
Severance terms are negotiated far more often than people assume, and asking does not withdraw the offer. HR departments expect a certain number of responses and have usually been given room to move before the first number is sent.
The requests that tend to succeed cost the company little. An agreed reference. An extra month of health coverage. Removing a non-compete the company has no real interest in enforcing. Making non-disparagement mutual. Converting instalments into a lump sum. Keeping a laptop. Moving the termination date to the far side of a vesting cliff or an insurance renewal.
Raising the number works best when you can point at something specific: a bonus that was about to be paid, a promise made in writing when you were hired, a commission already earned. Simply asking for more because the offer feels low rarely moves anyone.
Send it in writing, keep it short and unemotional, and ask for everything at once rather than returning three times. A reply along the lines of I am reviewing this and would like to discuss the reference language and the health coverage end date before I sign starts a normal conversation.
When not to sign
Some situations call for advice before a signature, because signing closes a door that may be worth more than the payment.
- →You were let go shortly after reporting something — harassment, safety, fraud, accounting irregularities — or after taking protected leave, or after disclosing a disability or a pregnancy. The timing is the issue, and a release ends any claim built on it.
- →The severance is unusually generous for your tenure. Employers sometimes pay above the formula because they know something you have not thought about yet.
- →You are being asked to sign the same day, or the deadline is shorter than the law allows for your age.
- →The agreement asks you to confirm facts that are not true: that you have reported all injuries, that you have no outstanding wage claims, that you were not discriminated against.
- →You were injured at work, or there is a workers' compensation claim open or possible.
- →You have a written employment contract with its own severance formula, and the offer is lower than the formula.
None of these means refuse. They mean the document is worth an hour of a lawyer’s time before it becomes final.
What happens if you do not sign
You do not get the severance. In most cases that is the whole of it: your employment has already ended, the payment was conditional on the release, and declining leaves you where you would have been without the offer. You keep your earned wages, your vested retirement money, your COBRA rights and your ability to apply for unemployment, and you keep every legal claim you have.
Whether that is a good trade depends on whether those claims are worth anything. For most people who were simply caught in a restructuring, they are not, and the severance is straightforwardly better than nothing. For someone with a genuine discrimination or retaliation claim, the calculation is different, and that is the calculation a lawyer can do quickly.
Deadlines do pass, and employers are entitled to withdraw an offer that has expired. If you need longer, ask before the date rather than after it.
When a lawyer is worth the money
Employment lawyers commonly review a severance agreement for a flat fee, often somewhere between a few hundred and a thousand dollars depending on the market and the length of the document. Many offer a short initial call at no charge, which is enough to establish whether there is anything here beyond a routine layoff.
It is worth paying when the amount is large enough that a percentage improvement exceeds the fee, when any of the situations above applies, when a non-compete could affect your next role, or when the agreement is long and unusual rather than the two pages most companies use. Your agreement already tells you to do this, incidentally, because for workers over 40 the law requires that advice to be printed in it.
If you want to understand the wording first, our contract clause analyzer takes a single provision and explains in plain English what it does and who it favours, and the document summarizer will go through the whole agreement and pull out the dates and obligations. Neither tells you whether to sign, and neither knows what happened in your workplace.
The practical version is short. Find the deadline and count the days you actually have. Read the release and work out what you are selling. Check the reference, the health coverage and the non-compete, because those affect next year rather than next month. Ask for the two or three things that cost the company least. Then decide, with time left on the clock rather than on the final afternoon.
General legal information, not legal advice. This describes US federal rules and common practice. State law adds materially to it — final pay deadlines, non-compete enforceability and the treatment of severance for unemployment purposes all vary — and an agreement that looks standard can turn on a single sentence. The EEOC guidance quoted here is published at eeoc.gov.
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