Severance — Plain-English Summary
Severance agreements pay you in exchange for a release of claims, and often for ongoing non-disparagement and cooperation. The release is usually the most valuable thing you're giving up. Paste a severance below and get a plain-English summary of the five most common red flags, the clauses typically expected on a standard version, and notes on where state law often changes the picture — in about 30 seconds. Informational only — for anything binding, consult a licensed attorney in your state.
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Five red flags we see most often in a severance
None of these are automatically deal-breakers — context and negotiating leverage matter. But if you see one on a draft, it's worth pushing back or escalating to counsel.
- 1General release of all claims — including claims you can't yet know about — in exchange for a small payment.
- 2Non-disparagement clauses with liquidated damages or clawback of severance if breached.
- 3Cooperation clauses that obligate you to assist in future litigation without compensation.
- 4ADEA (age discrimination) waivers without the required 21/45-day consideration and 7-day revocation windows.
- 5Confidentiality clauses that purport to prevent disclosure of unlawful workplace conduct.
Three clauses you should expect on a fair severance
If any of these are missing or written vaguely, that alone is worth asking about.
- 1A defined severance payment and benefits continuation.
- 2A release of claims tied to employment.
- 3Return of company property and confidentiality obligations.
State-specific variation on a severance
State laws around NDA carve-outs for unlawful conduct (California's STAND Act, similar statutes in NY, NJ and others) may invalidate portions of the agreement even after you sign.
BeforeSigning is not legal advice and does not create an attorney-client relationship. For anything binding, consult a licensed attorney in your state.
Terms to know before you read a severance
Three terms that come up repeatedly in severance drafts. Knowing these is the difference between skimming past a real issue and catching it.
- Non-Disclosure Agreement →
A non-disclosure agreement (NDA) is a contract requiring one or both parties to keep specified information confidential.
- Indemnification →
An indemnification clause shifts liability — one party agrees to cover losses, damages, or legal fees the other party incurs from specified events.
- Severability →
A severability clause says that if one part of a contract is found unenforceable, the rest of the contract still stands.