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SEVERANCE & PAPERWORK
New to this? Explain it like I'm 5 The whole deal in five sentences.
A severance deal is a trade: they pay you something, you give up your right to sue them over the layoff.
The money: usually some weeks of pay, often tied to how long you worked there. A lump sum and spread-out checks can be taxed differently.
What you sign away: mainly your right to sue. Sometimes you also agree not to bad-mouth them (ask if that goes both ways) or not to join a competitor (a non-compete, which many states barely enforce).
The clock: you usually do not have to sign today. If you're 40 or older, federal law typically gives you 21 days to decide and 7 days to change your mind after signing.
What to do: read it, see what's negotiable (more weeks, COBRA help, a reference in writing), and for anything big get a quick flat-fee attorney review before you sign.
That's the gist. The full guide below walks through each section and what's negotiable.

Severance agreements, decoded

This is general information, not legal advice. A severance agreement is a legal contract, and the right move depends on your situation, your state, and the exact wording. Before you sign, have an employment attorney review your specific agreement. Many offer flat-fee severance reviews.
A severance agreement is a trade: the company gives you something (usually pay, sometimes benefits) in exchange for you giving something up (usually your right to sue them). Here's what's typically inside, section by section, so it reads less like a wall of legalese.

Release of claims

This is the heart of almost every severance agreement. In exchange for the money, you agree not to sue the company over your employment or the layoff.
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It usually covers claims you might not even know you have.
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A few things generally can't be waived, like filing for unemployment, workers' comp, or certain agency complaints.
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Watch for: how broad it is, and whether it reaches further than feels fair for the amount offered.

Severance pay

How much, and how it's paid out.
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Often tied to tenure (say, a week or two per year of service), but there's no legal default amount. It's whatever was offered or negotiated.
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A lump sum vs. installments (salary continuation) changes the tax timing.
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Watch for: whether installments stop the moment you start a new job.

Benefits & COBRA

What happens to your health coverage and other benefits.
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The agreement may or may not contribute toward your COBRA premiums.
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Check the exact date your active coverage ends. (See the Health Coverage guide for the two 60-day windows.)

Non-compete, non-disparagement & confidentiality

The restrictions you'd agree to going forward.
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Non-compete: limits where you can work next. Enforceability varies a lot by state; some barely enforce them.
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Non-disparagement: you agree not to bad-mouth the company. Ask whether it's mutual.
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Confidentiality: you agree to keep the agreement (and sometimes the circumstances) private.
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Watch for: one-sided clauses and non-competes broad enough to block your whole field.

The signing clock

If you're 40 or older, federal law (the ADEA/OWBPA) usually gives you 21 days to consider the agreement and 7 days to revoke after signing. For group layoffs it's often 45 days. No one can legally make you sign on the spot. Don't let urgency rush a permanent decision.
Source: [EEOC, waivers in severance agreements](https://www.eeoc.gov/laws/guidance/understanding-waivers-discrimination-claims-employee-severance-agreements).

What's often negotiable

More than most people assume. Politely, and in writing, you can often ask about:
A common ask
Severance amount
More weeks, especially with long tenure
Timeline
More time to decide, or to land your next role
COBRA
The employer covering a few months of premiums
References
A neutral or positive reference, in writing
Non-disparagement
Making it mutual
Equity / vesting
Extending the window to exercise options

Red flags

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Pressure to sign immediately ("today only").
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A release far broader than the severance is worth.
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A non-compete that would block your entire field.
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Anything that contradicts what you were told out loud.

Questions to ask before you sign

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Is the severance amount or the timeline negotiable?
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Will you cover any COBRA premiums, and through when?
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Can I get a reference commitment in writing?
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Is the non-disparagement clause mutual?
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What exactly am I releasing, and does any of it waive something I'd want to keep?
General information only. Have an employment attorney review your specific agreement before signing.
YOUR NEXT STEP
Score your actual offer
The severance scorer reads your offer's numbers and terms, then tells you what's standard, what's thin, and what to push on. Free example output inside.
Try the severance scorer →
Worth a lawyer's eyes if…
You're 40 or older. Federal law (the OWBPA) gives you 21 days to consider it (45 in a group layoff), plus 7 days to revoke after you sign. If the paperwork doesn't reflect that, that's a flag.
It includes a non-compete, a non-solicit, or a sweeping non-disparagement clause.
The release waives “all claims” and you think you might actually have one (see below).
The amount is large, or the payout is tied to conditions you don't fully follow.
You're being pushed to sign today. There's almost never a real reason to.
HOW TO FIND ONE, AFFORDABLY
You may need a lawyer less often, and more affordably, than you think. Many employment lawyers give a free first consultation, and wage and discrimination cases are often taken on contingency, meaning you pay nothing up front.
Find an employee-side employment lawyer (NELA)
Your state bar's lawyer referral service
Free or low-cost legal aid (income-based)
Facing discrimination? Start with the EEOC
See all the lawyer flags
This isn't legal advice. It's a nudge to get a professional's read when the stakes are real.
Last reviewed June 2026. Laws and figures change. Verify anything time-sensitive against the official sources linked above.