The Benefits of Consulting a Lawyer Before Signing a Severance Agreement

Would you sign a contract before reading it?

Probably not. But that’s essentially what you do when you sign your severance agreement without talking to a lawyer. You might be rushing to collect your severance check, but severance agreements are full of sneaky clauses, restrictions, and legal jargon that can harm you down the line.

Fortunately, spending 30 minutes talking to a lawyer could preserve your rights and help you improve your deal. Whether you have employment law questions, financial concerns, or want to know how bankruptcy laws can help you, WH Law Offices can provide the right legal guidance before signing any type of agreement.

Here’s why…

What you’ll learn:

• Why severance agreements aren’t as straightforward as they seem
• The sneaky clauses that can harm you later
• How to improve your severance package by speaking with a lawyer
• What happens when you sign your severance agreement without talking to an attorney

Your Severance Agreement Isn’t as Straightforward as You Might Think

Employment lawyers draft and review severance agreements every day. To most employees, they seem straightforward. But there’s a lot going on under the hood.

In short, a severance agreement is a contract between your employer and yourself. It outlines severance pay you’re entitled to during your employment and any restrictions on what you can and cannot do after your employment ends.

The issue?

Most employees just sign their severance agreement without realizing everything they’re agreeing to. Many severance agreements ask employees to waive their rights to sue the employer. That includes claims for wrongful termination, harassment, discrimination, and other violations of employment laws.

Waiving your rights to sue your employer is a huge deal. Not only that, but severance agreements can include restrictive non-compete clauses, non-solicitation agreements, and confidentiality provisions. Without legal expertise, it can be difficult to understand every clause of a severance agreement.

Chances are… you don’t know what you’re missing.

A recent benchmark study found that 89% of organisations offer severance packages to employees. The problem is, very few of those employees actually read their severance agreement or consult with a lawyer.

Sneaky Severance Clauses That Can Harm You Later

Employment lawyers know severance agreements inside and out. That’s because employers and their lawyers draft these agreements.

In other words, severance agreements are NOT drafted with your best interest in mind.

If you didn’t know that already…

Here are some sneaky clauses you should look out for.

• Non-compete clauses. These clauses prevent you from working in your industry for a set period. In some cases, non-compete agreements make it difficult or impossible to earn a living.
• Non-disparagement clauses. Some severance agreements prohibit employees from saying anything negative about the company. Posting on social media can violate your severance agreement.
• Overly broad releases of claims. You may be required to waive your rights to sue your employer. But some releases extend to claims you don’t know about yet.
• Clawback provisions. Severance agreements sometimes include provisions that allow your employer to take back severance if you violate restrictions.

Let’s be honest…

Unless you have a law degree yourself, chances are these clauses flew over your head. Once you sign a severance agreement, it’s nearly impossible to undo.

That’s why it’s so important to consult with a lawyer before signing your agreement.

How to Improve Your Severance Deal by Consulting with a Lawyer

Lawyers are the professional negotiators.

Employment lawyers negotiate severance agreements all day long. Not only will they know if your severance package is fair, but they have experience improving severance packages for their clients.

If you hire a lawyer, here’s how they can help.

Get your agreement reviewed. Does your employer owe you more severance pay than they’re offering? According to Challenger, Gray & Christmas, average severance increased to 19.3 weeks in 2024. If you don’t think your employer’s offer is up to par, your lawyer can push back.

Ask for more. Many employees don’t realize that severance agreements are negotiable. If your employer won’t budge on severance pay, a lawyer may be able to ask for more vacation time, extended health benefits, outplacement services, or release restricting clauses.

Spot potential red flags. Employment lawyers know problematic clauses to look out for. Some non-compete agreements are unfairly long. Other separation agreements include vague language about confidentiality. Your lawyer will spot these red flags.

Ensure you aren’t waiving important legal rights. Were you terminated without cause? Do you over 40 and believe you were discriminated against? A lawyer can ensure you don’t give away your right to sue your employer.

Employees over the age of 40 are protected by a federal law called the Older Workers Benefit Protection Act. Essentially, employees over 40 must be given 21 days to review a severance agreement.

Furthermore, employees are given 7 days to revoke their signature should they change their mind after signing the agreement.

If your employer didn’t provide these timelines, you may be able to negotiate more money out of them.

What Happens if You Sign Your Severance Agreement Without Talking to a Lawyer?

Listen, there’s no doubt about it. Signing your severance agreement without consulting a lawyer is like playing legal roulette.

Here’s what could happen.

You could be unknowingly waiving your right to sue your employer. If you were wrongfully terminated, discriminated against, or laid off without cause you should consult with a lawyer before signing your severance agreement. You don’t know what legal claims you may have down the road.

You could be restricting your future career prospects. Non-compete and non-solicitation clauses are tricky. Some prevent you from doing similar work for competitors or contacting clients you’ve worked with in the past.

You could be leaving money on the table. Your lawyer can ensure you’re receiving fair severance pay based on industry standards. Employers love to lowball employees into accepting the first severance offer. Don’t fall for it.

Once you sign the agreement, it’s too late to ask.

Here’s the thing. Hiring a lawyer doesn’t have to cost you much money at all. Many employment lawyers offer flat-fee consultations so you know what you’re paying upfront.

And if you think you have a strong legal claim against your employer, some lawyers will take your case on contingency.

Wrapping Things Up

Don’t sign your severance agreement until you’ve consulted with a lawyer.

Your severance agreement impacts your finances, your ability to earn an income, and your legal rights. Make sure you understand every clause in the agreement before it’s too late.

A good employment lawyer will review your entire agreement, negotiate on your behalf, and protect your legal rights so you don’t waive any claims you shouldn’t.