Should You Sign a Severance Agreement? What You Give Up First (2026)

A severance offer usually arrives at the worst possible moment: the same meeting where you learn you are losing your job. The paper in front of you is more than a payment. It is a contract, and in most cases the price of the check is your signature on a release, a promise not to sue your employer over anything that happened before you signed.

Sometimes that is a fair trade. Sometimes the claim you would be giving up is worth far more than the check. This guide explains what you give up, what the law lets you keep, the deadlines that keep running while you decide, and what it costs to have a lawyer look before you sign.

The short answer

• Severance is a deal, not a right. Federal wage law does not require it. The U.S. Department of Labor says severance pay "is a matter of agreement between an employer and an employee (or the employee's representative)."
• The money buys a release. Signing usually ends your right to sue over the job and the firing, including discrimination and retaliation claims.
• Some rights cannot be signed away. You can still file a charge with the EEOC, and if you are 40 or older, federal law gives you time to decide and time to change your mind.
• A review can cost little next to what may be at stake. Lawyers often review a severance agreement for a flat fee of $500 to $2,000, and if you may have a claim, most employment claims are screened at no cost.

What you give up when you sign

The core of most severance agreements is the release. In exchange for the payment, you agree not to bring claims against the company over anything up to the day you sign. Releases are usually written as broadly as possible and commonly cover:

• Discrimination claims based on age, race, sex, pregnancy, religion, national origin or disability
• Retaliation claims, for example after you complained about harassment, pay or safety
• Wrongful termination and breach of contract claims
• Claims about leave, benefits and pay, to the extent the law allows them to be released

Many agreements add other promises: keeping the agreement confidential, not saying negative things about the company, returning property, helping with future legal matters, or agreeing not to reapply. Each one is part of what you are trading, so read them as carefully as the dollar figure.

One rule works in your favor. The money has to be something extra. The EEOC explains that what you receive for a release must be "something of value in addition to any of the employee's existing entitlements." Pay you have already earned, such as your final wages, is not the price of your signature.

Signs the offer may be covering a legal claim

Many layoffs are lawful, and in those cases severance is simply a cushion. The offer deserves a closer look if any of these fit your situation:

• You were let go soon after complaining about discrimination, harassment, unpaid wages or a safety problem, or after reporting something to a government agency.
• The decision came soon after you took medical or family leave, asked for an accommodation, announced a pregnancy or filed a workers' compensation claim.
• You are 40 or older and were replaced by someone much younger, or older workers were hit hardest in the layoff.
• A manager made comments about your age, race, sex, religion, disability or national origin.
• You were pressured to resign, or the agreement calls your exit a resignation when you did not choose to leave.
• You are owed commissions, bonuses or overtime that the agreement treats as settled.

Company size matters for some of these claims. According to the EEOC, the federal laws against discrimination based on race, color, religion, sex, national origin, disability and genetic information cover employers with 15 or more employees for at least 20 calendar weeks in this year or last, and the federal age discrimination law applies the same test at 20 or more employees. An employer too small for the federal laws may still be covered by a state or local law, so working for a small company does not by itself rule out a claim.

If one of these signs fits, the release may be asking you to give up a claim worth more than the offer. Before you sign, you can ask an employment lawyer to screen your situation; most employment claims are screened at no cost. Our guides to when you can sue your employer and wrongful termination settlements go further.

The time rules that protect you

If you are 40 or older

Federal law adds protections when an agreement asks you to give up age discrimination claims. According to the EEOC, the agreement must, among other things:

• Give you at least 21 days to consider it, or at least 45 days if you were let go as part of a group layoff or exit program
• Give you 7 days to revoke your signature after you sign
• Advise you in writing to consult an attorney
• Leave out claims that arise after you sign

An agreement that skips these steps may not validly give up your age claims. You can choose to sign sooner, but your employer cannot pressure you into giving up the full 21 or 45 days, and the 7-day revocation period cannot be shortened.

If you are under 40

Federal law sets no minimum review period for younger workers, and only some states add their own rules, so the deadline is usually whatever the company writes in. Ask in writing for more time if you need it. It is usually wise not to sign in the meeting where the offer is handed to you.

Your legal deadlines keep running

While you think about the offer or negotiate it, the clock on a discrimination claim keeps moving. In general you have 180 calendar days from the day the discrimination took place to file a charge with the EEOC, extended to 300 days where a state or local agency enforces a law against the same kind of discrimination (for age claims, only a state law enforced by a state agency counts). The EEOC warns that these time limits "generally will not be extended while you attempt to resolve a dispute" through another route such as an internal grievance, arbitration or mediation, so do not count on severance talks to buy you extra time.

If it was a mass layoff

Under the federal WARN Act, employers with 100 or more employees, not counting part-time workers, generally must give 60 days' written notice before a covered plant closing or mass layoff. If they do not, affected workers can recover back pay and benefits for each day of the violation, up to 60 days and no more than half the days they worked there, less certain payments the employer already made. Some states have their own notice laws. A severance agreement may ask you to release a notice claim too, so check whether the notice you received came in time.

Confidentiality and non-disparagement clauses

Even a strict confidentiality clause cannot stop you from filing an EEOC charge or taking part in an EEOC investigation. The EEOC says any provision that tries to waive those rights "is invalid and unenforceable." Separately, federal labor law protects most non-supervisory workers' right to talk about their pay and working conditions, and in 2023 the National Labor Relations Board limited how far severance gag clauses can reach. That rule has faced calls to be reversed, so ask a lawyer whether a clause in your agreement goes too far.

What a lawyer review costs, and what it can change

When there is no claim behind the agreement, a review is usually a flat fee, often $500 to $2,000. For that, a lawyer can explain every clause, flag terms that may not be enforceable, and tell you whether the offer looks reasonable for your situation.

If the review turns up a real claim, the math changes. Employment lawyers usually take discrimination, retaliation and wrongful termination cases on contingency, so there is nothing to pay upfront and the fee comes out of any recovery. Our breakdowns of what an employment lawyer costs and what a discrimination lawyer costs walk through the percentages.

With a claim on the table, a lawyer may be able to negotiate a larger payment or better terms before you sign. No one can promise a result, but the leverage comes from the claim the company is asking you to release.

Before you sign: a checklist

• Write down the date you were told you were being let go. Many deadlines run from that day.
• Do not sign at the meeting. Ask in writing how long you have, and keep the answer.
• If you are 40 or older, confirm the agreement gives you 21 or 45 days to consider it and 7 days to revoke.
• Separate what you are already owed, such as final pay and earned commissions, from the severance itself.
• Save what you can lawfully keep: your offer letter, reviews, pay records and the emails or texts about the decision. Do not take confidential company data.
• Check how severance affects unemployment benefits in your state before you sign. The rules vary by state.
• Get the agreement reviewed, or get screened for a claim, before the deadline in the agreement.

Frequently Asked Questions

Do I have to sign a severance agreement?

No. It is an offer. If you do not sign, you usually do not receive the severance payment, but you keep your right to bring legal claims. Pay you have already earned is owed either way.

Can I negotiate a severance offer?

Yes. Severance is a matter of agreement, so the amount and the terms can be negotiated. The company does not have to agree, but a real legal claim can be a good reason for it to improve an offer.

If I sign, can I still file an EEOC charge?

Yes. No agreement can stop you from filing a charge or taking part in an EEOC investigation. Filing the charge is protected, but a valid release can still bar you from recovering money for yourself, so ask a lawyer before you count on it.

How long do I have to decide?

If you are 40 or older and the agreement covers age claims, at least 21 days, or 45 days in a group layoff, plus 7 days to revoke after signing. Otherwise the agreement usually sets the deadline. Either way, your deadline to file a discrimination charge keeps running.

Is it worth paying a lawyer to review severance?

A flat-fee review typically costs $500 to $2,000. Weigh that against the size of the offer and against any claim you might be releasing. If you think you were let go illegally, a screening is a sensible first step, and most employment claims are screened at no cost.

Think you have a case? Start here. If you were offered severance and something about the firing feels wrong, get matched free with an employment lawyer before you sign. Answer a few quick questions, and an employment lawyer near you can reach out to screen your situation. It takes about two minutes, there is no obligation, and most employment claims are screened at no cost. Attorney availability and fee terms vary.

Sources

• U.S. Department of Labor, Severance Pay
• U.S. Equal Employment Opportunity Commission, Q&A: Understanding Waivers of Discrimination Claims in Employee Severance Agreements
• U.S. Equal Employment Opportunity Commission, Time Limits for Filing a Charge
• U.S. Equal Employment Opportunity Commission, Coverage: Business and Private Employers
• Worker Adjustment and Retraining Notification Act, 29 U.S.C. 2101, 2102 and 2104
• Code of Federal Regulations, 29 CFR 1625.22, waivers of rights and claims under the ADEA
• National Labor Relations Board, McLaren Macomb, 372 NLRB No. 58 (2023)

This content is for general informational purposes only, is not legal advice, and does not create an attorney-client relationship. Readers should consult a qualified attorney licensed in their jurisdiction. AttorneyReview works with a network of law firms across the United States. If you need help with your case, get matched free with a qualified attorney.