Your Employer Handed You a Severance Agreement. Here’s What They’re Not Telling You.
You’ve just been terminated. Your employer hands you a severance agreement and tells you to sign within a few days. Maybe they frame it as standard procedure. Maybe they make it sound like a favor.
It isn’t.
That document contains a clause designed to permanently eliminate your right to sue your employer for anything that happened during your employment—including discrimination, retaliation, unpaid wages, or harassment. Once you sign, that window closes.
Before you pick up a pen, here’s what you need to understand.
What a Severance Agreement Actually Is
A severance agreement is a contract between you and your employer that defines the terms of your departure. The EEOC describes it as a legal agreement specifying the terms of an employment termination—sometimes called a “separation agreement,” “termination agreement,” or “general release and covenant not to sue.”
That last phrase is the one that matters most.
Buried inside the standard severance package is a general release of claims—a legal waiver that surrenders your right to pursue any future lawsuit against your employer. Sign it, and your employer is legally protected from accountability for:
• Race, sex, age, or disability discrimination
• Sexual harassment or hostile work environment
• Retaliation for reporting violations
• Unpaid wages, bonuses, or stock options
• Pregnancy discrimination or medical leave interference
The rest of the agreement—severance pay, benefits continuation, non-competes, confidentiality clauses—is structured around that waiver. Your employer’s goal is to get you to sign it quickly, before you understand what you’re giving up.
Why “Just Reviewing It Yourself” Isn’t Enough
Severance agreements are deliberately complex. They’re written by employment defence lawyers whose job is to protect your employer’s interests, not yours. Here’s what gets missed without experienced legal review:
Your claims may be worth far more than the package offered.
Employers routinely offer severance that represents a fraction of what a discrimination or retaliation claim is actually worth. We’ve secured settlements for clients that far exceed what their employers initially offered in severance—after recovering evidence the client didn’t know existed. If you sign before speaking with an attorney, you’ll never know what you left on the table.
The financial terms may shortchange you.
Employers sometimes miscalculate severance amounts, structure payment schedules to exclude upcoming bonuses, or time agreements to cut off stock options on the verge of vesting. These aren’t accidents.
Non-compete and confidentiality clauses may be unenforceable—or illegal.
Standard non-competes can bar you from working in your own industry for a year or more. In Illinois, non-compete agreements are unenforceable for employees earning under $75,000. In Minnesota, non-competes for employees hired after January 1, 2023 are void and unenforceable. Signing a severance agreement that includes one doesn’t make it legally binding—but it can complicate your job search if you don’t know your rights.
Non-disparagement clauses cut both ways.
Most agreements prohibit you from making negative statements about the company. That protection should be mutual—and it often isn’t, unless you negotiate it. Without a mutual non-disparagement clause, your former employer can damage your professional reputation while you’re legally prevented from responding.
If You’re Over 40, Federal Law Gives You More Time—Make Sure Your Employer Honored It
The Older Workers Benefit Protection Act (OWBPA) requires employers to give employees over 40 a minimum of 21 days to review a severance agreement—and 45 days in the case of mass layoffs. After signing, you have 7 days to revoke you acceptance.
If your employer pressured you to sign immediately or gave you less time than the law requires, that’s a federal violation—and it may invalidate the release of claims entirely.
This isn’t a technicality. It’s a right. And it’s one employers regularly fail to honor.
What an Attorney Can Do That a Quick Read Can’t
An experienced employment attorney does more than check boxes. When Wanta Thome reviews a severance agreement, we evaluate:
Whether your termination was lawful.
If you were fired in circumstances that suggest discrimination, retaliation, or protected activity, the severance offer isn’t just a document—it’s leverage. Understanding the strength of your underlying claim is the starting point for any negotiation.
Whether the financial terms are accurate.
We calculate what you’re actually owed—severance, accrued PTO, unvested equity, bonus proration—and identify where your employer’s math falls short.
Whether the restrictive covenants are enforceable.
Non-competes, non-solicitation clauses, and confidentiality provisions are scrutinized against current Minnesota and Illinois law—and negotiated where they exceed what’s legally permissible.
What you should be asking for.
A neutral employment reference. Extended health coverage. A mutual non-disparagement agreement. Severance structured to protect unemployment eligibility. These aren’t afterthoughts—they’re negotiating points that protect your financial and professional future.
Our Wanta Thome Resolution Method applies the same strategic discipline to severance review that we bring to full employment litigation: early damages analysis, targeted pressure points, and systematic follow-through—compressed into the review window your employer gives you.
The Deadline Is Real. The Pressure Isn’t.
Employers set short signing windows because urgency works in their favor. It doesn’t have to work against you.
Most severance reviews can be completed quickly when you act immediately. What can’t be recovered is the time you lose waiting—or the claims you permanently sign away before understanding their value.