Should I sign the severance agreement my employer offered?
I was laid off yesterday and handed a severance agreement offering eight weeks’ pay if I sign within 21 days. It includes a release of claims and a non-disparagement clause. Is this a good deal?
1 lawyer answer
A severance agreement is usually a trade: the employer pays something you may not otherwise be entitled to, and in return you give up the right to bring certain legal claims. Whether it is a good deal depends on what you would be giving up and whether you have any potential claims.
Points worth checking:
- Which claims are released, and whether any are excluded
- Non-compete, non-solicitation, confidentiality and non-disparagement terms
- How payment is made, and the effect on benefits such as health coverage
- Whether you get a reference or an agreed explanation for your departure
Review periods (like 21 days) often exist because of specific legal requirements, especially for older workers. Use the time — it is common to negotiate severance, particularly if there are concerns about the reasons for the termination.
This is general information, not legal advice — speak to a licensed lawyer about your situation.
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