Getting fired is stressful. Receiving a severance agreement on the spot adds even more pressure—but you should never sign a severance agreement the same day you receive it. Pause, step back, and talk to a lawyer before you give up important rights.
Here’s what every employee should know before signing.
Don’t Let Anyone Pressure You to Sign Immediately
Employers often rush employees into signing. You have the right to take time—and you should use it—to review the agreement, understand the consequences, and consult an attorney. Do not let anyone bully you into signing something you have not fully evaluated.
Understand Your Leverage
Severance amounts rarely increase unless the employee has leverage, such as:
- Discrimination
- Sexual harassment
- Retaliation
- Whistleblower activity
- Wage violations
- Wrongful termination
When leverage exists, a lawyer can often negotiate a significantly better severance package than the employer originally offered.
Key Questions to Ask Before You Sign
Before you sign anything, ask yourself:
Severance Pay: Is the amount fair based on your tenure and the circumstances of your departure?
Benefits: How long will your health insurance or other benefits continue?
Unemployment: Will signing affect your eligibility?
Legal Rights: Which claims are you giving up, and could they be worth more than the severance payment?
Non-Compete / Non-Solicitation: Will the agreement limit your ability to work in your field?
Use these questions to decide whether negotiation—or declining the severance—serves your best interests.
Signing Usually Means You Give Up Your Right to Sue
Almost all severance agreements include a release of claims that blocks you from later pursuing:
- Discrimination or harassment claims
- Retaliation or whistleblower claims
- Wrongful termination claims
- Unpaid wage, commission, or vacation claims
This release holds enormous value for the employer—which makes it critical for you to understand exactly what you are giving up.
Employers Do Not Have to Offer Severance
Unless an employment contract guarantees severance, companies usually offer it to:
- Maintain goodwill
- Avoid litigation
- Protect themselves from future claims
Because severance remains optional for employers, they draft agreements to protect the company—not you.
Watch Out for Non-Compete and Non-Solicitation Clauses
These restrictive covenants can:
- Prevent you from working for a competitor
- Limit your ability to earn a living
- Block you from starting your own business
- Disrupt your career for months or years
Even in states with restrictions, such as Illinois, employers still include these clauses. Review them carefully before you sign.
Never Sign an Agreement That References Documents You Haven’t Reviewed
Severance agreements often refer to:
- Earlier non-compete agreements
- Stock award documents
- Confidentiality agreements
- Employee handbooks
If the employer has not provided these documents, request them. Never sign an agreement that incorporates terms you have not reviewed.
Beware of Unclear or Ambiguous Language
Unclear terms can:
- Limit future job opportunities
- Affect unemployment eligibility
- Create ongoing legal obligations
- Lead to unintended consequences
Ask for clarification. When language feels vague, the employer likely drafted it that way to protect itself.
Common Components of Severance Agreements
Most severance agreements include:
- Severance pay
- Continued health benefits
- Confidentiality and non-disclosure provisions
- Non-compete or non-solicitation clauses
- Non-disparagement requirements
- Return-of-property rules
- Releases of claims
- A deadline to sign
The key takeaway: employers design these agreements primarily to protect themselves—not employees.
Final Thought
If you were just fired and offered a severance agreement:
Stop. Do not sign. Talk to a lawyer who can evaluate your claims, negotiate on your behalf, and help you secure the compensation you deserve.
1818 Is Here to Help
If you are experiencing retaliation or considering making a report, we can help you:
- Understand your rights
- Protect your job
- Document retaliation effectively
- File and pursue a whistleblower claim
Your consultation is confidential. Contact 1818 today.
