Here are nine common things we hear from clients who find themselves on the receiving end of a severance agreement, along with answers based upon decades of employment law experience.
1. Why shouldn’t I sign this agreement if it follows company policy?
Even if the agreement appears to follow company policy, you should never sign a severance agreement until you fully understand the consequences.
When you sign a severance agreement, you typically give up your right to sue the employer for claims related to your employment or termination. Even if you do not intend to file a lawsuit, signing immediately eliminates your bargaining leverage.
In many cases, severance agreements are negotiable. Reviewing the agreement carefully before signing may allow you to negotiate better terms.
2. I need time to think about this.
Taking time to evaluate a severance agreement is reasonable, but you should not delay your decision-making process.
Most severance agreements provide:
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21 calendar days to review the agreement
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45 days in certain circumstances, such as group layoffs
Waiting until the final days can limit your options and create unnecessary pressure. It is best to start reviewing the agreement and gathering information immediately.
3. I don’t have copies of my employment records.
One of the first things you should do is collect important employment records. These documents may include:
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Non-compete agreements
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Confidentiality agreements
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Non-solicitation agreements
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Employment contracts
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Pay records and bonus plans
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Documentation of unused vacation days
Many employees assume they have access to these documents but later discover they were stored only on the employer’s computer system, which they can no longer access after termination.
To avoid this issue, keep copies of important employment documents:
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In hard copy form
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Stored electronically in a secure location outside the company network
Having these records readily available can be critical when evaluating a severance agreement and protecting your financial future.
4. Why do I need an attorney if the agreement looks like a standard form?
Severance agreements often appear to be simple “standard forms,” but they are typically drafted by the company’s attorneys to protect the employer’s interests—not yours.
An employment attorney can help identify:
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Rights you may be waiving
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Potential legal claims
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Negotiation opportunities
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Unfair or overly restrictive provisions
Many employees do not realize the long-term consequences of certain clauses until it is too late. Professional legal guidance can help ensure that you fully understand what you are signing and what rights you are giving up.
5. If I hire an attorney, can the company revoke the severance offer?
In most cases, no.
For employees who are 40 years of age or older, federal law requires employers to inform you that you have the right to consult with an attorney before signing the agreement. Many employers extend this same right to employees of any age.
If an employer withdraws a severance offer simply because you consulted an attorney, they may be violating federal law.
6. Isn’t New Jersey an “employment at will” state where employers can fire me for any reason?
New Jersey is indeed an employment-at-will state, which generally allows employers to terminate employees without cause. However, there are many important exceptions.
New Jersey also has some of the strongest employee protection laws in the country, including protections related to:
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Discrimination
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Retaliation
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Whistleblower claims
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Wage and hour violations
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Wrongful termination
These laws can sometimes create significant leverage when negotiating severance terms. Before assuming you have no legal rights, it is wise to have your situation evaluated by an experienced employment attorney.
7. I’ll try negotiating with the company first and call an attorney if it doesn’t work.
Unfortunately, this strategy rarely works.
Once an employee attempts negotiations alone and the employer declines, it often becomes difficult for an attorney to reopen discussions. At that point, the only remaining option may be filing a lawsuit.
Seeking legal advice before attempting negotiations can significantly improve your chances of reaching a more favorable outcome.
8. I can revoke the agreement within a week after signing, so I’ll sign it now and negotiate later.
Many severance agreements allow employees seven days to revoke the agreement after signing. However, revocation is a legal safeguard—not a negotiation strategy.
In practice, once an agreement is signed, employers typically treat it as final. If you revoke it, you may simply lose the severance offer altogether.
It is far better to review and negotiate the agreement before signing rather than relying on revocation later.
9. I’ll sign the agreement, take the severance pay, and still sue later.
This is a common misunderstanding.
Severance agreements almost always contain a provision known as a “release” or “waiver.” This section is typically a lengthy legal clause stating that you agree not to sue the employer for any claims related to your employment.
Once you sign the agreement, that waiver generally becomes legally binding.
In most situations, you must choose one of two options:
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Accept the severance payment and waive your legal claims, or
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Decline the agreement and pursue legal action
You typically cannot do both.
Speak With an Employment Law Attorney
If you have been presented with a severance agreement, it is important to fully understand your rights and options before signing.
Contact Steinberg Law, LLC today to discuss your employment law issue. Our experienced legal team is here to help you evaluate your situation and protect your interests.
