If you were handed a severance agreement in Illinois, do not assume it is “standard” or that you must sign it immediately. In many cases, severance agreements are written to protect the employer—not you. A severance agreement may ask you to waive legal claims, stay silent about what happened, comply with restrictive covenants, or give up leverage you did not realize you had. Before signing, it is worth understanding what you are being asked to give up and whether the offer can be improved.
Below are answers to some of the most common questions employees in Chicago and throughout Illinois have when they receive a severance offer. If you believe your termination involved discrimination, retaliation, unpaid wages, disability issues, whistleblower activity, FMLA leave, or breach of contract, the agreement should be reviewed carefully before you sign anything.
1. I was just given a severance agreement. What should I do first?
Do not sign it on the spot. Ask for a copy, take it home, and read every page carefully. If HR or management is presenting the agreement as “routine,” remember that many severance agreements are anything but routine. The first thing you should do is preserve and gather documents, including your offer letter, employment agreement, handbook, bonus or commission plans, equity documents, recent paystubs, performance reviews, and any important emails or text messages related to your job or termination.
If you suspect you were terminated because of your age, race, sex, pregnancy, disability, medical leave, whistleblowing, complaints about harassment or discrimination, wage complaints, or some other protected reason, write down a timeline while events are still fresh in your mind and then call an attorney.
2. Do I have to sign a severance agreement?
No. In most Illinois employment situations, you are not legally required to sign a severance agreement unless you want the severance benefits being offered. Employers generally condition severance on your agreement to release claims and comply with other terms they want.
That means you are making a trade: you receive money or benefits, and in return the employer seeks legal protection. Whether that trade is worth it depends on the value of the severance, the rights you may be waiving, and whether the employer has exposure. The answer is not the same in every case.
3. Can I negotiate a severance agreement in Illinois?
Yes. Many severance agreements are negotiable, even when the employer says they are “standard” or “non-negotiable.” In reality, many employers expect some pushback—especially where there are legal issues, business risk, public-facing concerns, or concerns about how the termination was handled.
Common items that may be negotiable include:
- The amount of severance pay
- Bonus or commission treatment
- COBRA or health insurance contributions
- Non-disparagement language
- Reference language / neutral reference
A good severance negotiation is not just about asking for “more money.” It is about understanding the employer’s risk and using that risk to improve the overall package.
4. What legal claims might I be waiving if I sign?
Potentially a great deal. Most severance agreements include a broad release of claims. Depending on the wording, you may be waiving claims under federal, state, and local law, including claims you have not yet fully investigated.
In Illinois, that may include potential claims under laws such as:
- The Illinois Human Rights Act, 775 ILCS 5/1-101 et seq.
- The Illinois Whistleblower Act, 740 ILCS 174/1 et seq.
- The Illinois Wage Payment and Collection Act, 820 ILCS 115/1 et seq.
- The Illinois Minimum Wage Law, 820 ILCS 105/1 et seq.
- The One Day Rest in Seven Act, 820 ILCS 140/1 et seq.
- The Illinois Victims’ Economic Security and Safety Act, 820 ILCS 180/1 et seq.
- The Illinois Equal Pay Act, 820 ILCS 112/1 et seq.
You may also be asked to release federal claims, including under Title VII, the ADA, the ADEA, the FMLA, the FLSA, and other statutes. Before signing, it is important to understand not only what claims you may have, but also whether the severance offered is anywhere near enough to justify releasing them.
5. Can I still bring a discrimination or retaliation claim if I sign?
Usually not for claims that are validly released. That is why you should not sign before understanding whether there may be viable discrimination, retaliation, harassment, disability, leave, or whistleblower claims.
For example, if you were terminated shortly after:
- requesting an accommodation,
- taking or requesting medical leave,
- complaining about discrimination or harassment,
- reporting legal or ethical concerns,
- objecting to wage issues,
- or disclosing protected concerns,
then your severance agreement may be far more significant than HR is suggesting. Severance is often offered in exactly the kinds of cases where the employer sees potential legal risk.
6. If I sign, can I still file with the EEOC or IDHR?
Yes—but there is an important distinction. Many severance agreements cannot legally stop you from filing a charge with the EEOC or the Illinois Department of Human Rights (IDHR), or from participating in a government investigation. However, the agreement may still seek to waive your right to recover personal damages based on released claims.
That distinction matters. Just because an agreement says you can still “cooperate with government agencies” does not mean signing has no legal consequence. It often means the employer is trying to preserve compliance with agency rules while still protecting itself from your private recovery.
7. What if I am over 40? Are there special rules?
Yes. If you are age 40 or older and the agreement asks you to waive age discrimination claims, the severance agreement may need to comply with the Older Workers Benefit Protection Act (OWBPA), 29 U.S.C. § 626(f). Among other things, the agreement may need to:
- be written in a manner calculated to be understood,
- specifically reference rights under the Age Discrimination in Employment Act,
- advise you in writing to consult an attorney,
- give you a required review period in certain situations, and
- provide a revocation period after signing.
If the employer is doing a group layoff or reduction in force, there may be additional disclosure obligations. These issues can matter significantly when evaluating whether a release is enforceable.
8. Can a severance agreement waive wage claims in Illinois?
Sometimes yes, but that does not mean it should be accepted without scrutiny. If you are owed unpaid wages, bonuses, commissions, PTO/vacation, or other earned compensation, those issues should be separately evaluated.
Under the Illinois Wage Payment and Collection Act, 820 ILCS 115/5, employers must generally pay final compensation no later than the next regularly scheduled payday. “Final compensation” can include earned wages, earned bonuses if vested under the applicable plan, and earned but unused vacation if the employer’s policy or contract provides for payout. See also 820 ILCS 115/2.
If you are being offered severance while there are unresolved wage issues, that is a major point to review. You do not want to sign away wage claims without understanding what you may already be owed as a matter of law.
9. Do I get paid for unused vacation or PTO in Illinois?
Often yes, but the answer depends on the employer’s policy and how the time is classified. In Illinois, earned vacation is generally treated as final compensation and must typically be paid out upon separation. See 820 ILCS 115/5 and the Illinois Administrative Code, 56 Ill. Admin. Code § 300.520.
Employers sometimes blur the line between “vacation,” “PTO,” “sick leave,” and other categories of leave. If your employer is trying to deny payout, that issue should be reviewed carefully. Vacation payout disputes often get buried in severance discussions even though they may be legally distinct from severance itself.
10. Can a severance agreement affect my unemployment benefits?
Potentially, yes. The impact may depend on whether the severance is paid as a lump sum, salary continuation, or under some other structure. The language used in the agreement can matter. In some cases, severance can delay or complicate unemployment benefits; in other cases, it may not have the same effect.
This is another reason why employees should not assume the employer’s form agreement is harmless. The structure of the deal matters, not just the headline number.
11. Should I be worried about a non-compete or non-solicit in the severance agreement?
Absolutely. Some severance agreements include restrictive covenants, and others attempt to expand restrictions that were originally signed at hire. Those provisions can materially affect your next job, your ability to contact clients, or your ability to work in your field.
Illinois has placed limits on restrictive covenants through the Illinois Freedom to Work Act, 820 ILCS 90/1 et seq., including notice and attorney-review provisions in certain circumstances. That does not mean every restriction is unenforceable—but it does mean these provisions should be reviewed carefully. Employers often use the severance process to try to lock in stronger restrictions than they could easily enforce otherwise.
12. What should I look for in confidentiality and non-disparagement clauses?
These clauses are often broader than people realize. A confidentiality clause may attempt to prevent you from discussing the agreement, the underlying events, or even your own workplace experience. A non-disparagement clause may be written vaguely enough to create risk if you speak honestly to future employers, colleagues, or others.
These provisions should be reviewed for fairness, mutuality, and compliance with current law. They should also be reviewed to ensure they do not improperly interfere with your ability to:
- communicate with government agencies,
- cooperate in investigations,
- discuss unlawful workplace conduct,
- or otherwise exercise protected rights.
13. What if the employer says the offer is “standard” and “final”?
“Standard” often just means this is the version they are proposing, there is no such thing as standard. Employers regularly make that representation even when there is room to improve the deal.
In practice, the real question is this: what is the employer trying to buy from you? If the employer is seeking a broad release, confidentiality, non-disparagement, cooperation, and post-employment restrictions, then the package should be evaluated accordingly. If there are legal claims or meaningful factual issues, the employer may have more incentive to negotiate than they are admitting.
14. What documents should I gather before talking to a lawyer?
Try to gather:
- the severance agreement,
- your offer letter,
- employment contract or executive agreement,
- bonus/commission plans,
- equity documents,
- handbook and policies,
- recent paystubs,
- PTO/vacation records,
- performance reviews,
- disciplinary notices,
- termination communications,
- and any important emails or texts.
If there were comments or events that felt discriminatory, retaliatory, or suspicious, write down who said what and when. A simple timeline can be extremely valuable when evaluating leverage.
15. When should I speak to an employment lawyer about severance?
As early as possible—ideally before you sign anything and before you respond substantively to HR. In many cases, a quick review can identify issues that materially change the value of the severance agreement or your legal position.
A severance agreement can affect your pay, benefits, legal claims, future job opportunities, reputation, and negotiating leverage. Once you sign, it may be difficult or impossible to undo the consequences. That is why the best time to review a severance agreement is before you sign it—not after.
Need Help Reviewing a Severance Agreement in Chicago or Illinois?
If you were offered severance in Chicago or anywhere in Illinois, it may be worth having the agreement reviewed before you sign. A severance agreement can affect your compensation, benefits, legal claims, future employment, and negotiating leverage. A review now may help you avoid giving up valuable rights for far less than your case or leverage is worth.
1818 represents employees in Chicago and throughout Illinois in severance negotiations, employment disputes, retaliation matters, discrimination claims, whistleblower cases, and wage disputes. If you have been handed a severance agreement and are not sure whether to sign, it may be worth getting a legal review before making a final decision.
