What Am I Waiving If I Sign a Severance Agreement?

By: Alex Meier

Last updated: May 2026

Signing a severance agreement is a major decision. If you sign a severance agreement, you may be giving up more than you think. While employees often focus on monetary benefits, a severance agreement can impose significant obligations while eliminating an employee’s ability to file a lawsuit against a former employer. The specific considerations will vary with the terms of the agreement, but it is often a good idea to have an attorney review the agreement.

What are common terms in a severance agreement

Severance agreements offered as part of a reduction in force or termination can vary from agreement to agreement, but these agreements normally contain the following terms:

• A provision that sets your final day of employment and the characterization of your separation.
• Payment of some amount of severance to you.
• A release of claims, meaning that you cannot sue your former employer for anything that happened before you sign the agreement.
• A provision that you agree that the company is not obligated to rehire you.
• Representations that you have been paid all owed wages and have reported any compliance concerns.
• A confidentiality provision that prohibits you from disclosing the terms of the agreement except in specific circumstances.
• A non-disparagement provision that prohibits you from making disparaging or unfavorable statements about the employer or people who work there.
• A return of property provision that obligates you to return any company property, such as computers, key cards, or information.

The severance agreement may also include post-employment restrictive covenants, like a non-compete, customer non-solicit, or confidentiality provision.

What claims are released by a severance agreement

Normally, a severance agreement will require you to release any claim that you have against the company or people affiliated with the company that can be released.

If I change my mind, how hard is it to get around a separation agreement

It is exceptionally difficult to invalidate a separation agreement, and courts will normally enforce a separation agreement absent extreme misconduct by an employer.

Why employers offer severance

• The employer is contractually obligated to offer severance.
• To obtain a release of claims and reduce litigation risk.
• To obtain confidentiality or a quiet resolution.

Frequently Asked Questions

Does signing a severance agreement usually mean I cannot sue later?

Yes, while the scope of the release determines its scope, a release in a severance agreement normally covers all waivable claims occurring before the date the agreement is signed.

Does the release usually cover future claims too?

No, severance agreements cannot waive claims based on things that happen after the agreement is signed, but a severance agreement’s release very likely covers past claims that you only learn exist after signing the release.

Should I review severance even if I am not sure I have a claim?

Yes, you should review any contract before signing it. You may also want to retain a lawyer to evaluate whether you can improve the terms of a severance offer and whether you have viable claims against your former employer.

Is it a problem if my employer promised things that are not mentioned in the severance agreement?

This could be a problem. Normally, severance agreements include a provision that the agreement is limited to what is written in the severance agreement, so if the employer told you something, you could not rely on that statement in a lawsuit later. If this occurs, you may want to retain an attorney to advise you about how to proceed.