Introduction: Don’t Just Sign—Negotiate
You’ve just been let go. You’re feeling stunned, maybe even relieved, and now you’re staring at a severance agreement on your desk. It promises a few weeks of pay if you sign—and quickly. But before you pick up that pen, stop.
What many workers don’t realize is that severance agreements are negotiable, and in New Jersey, they often come with strings attached—like waiving your right to sue. If your employer is offering severance, they’re protecting themselves. You should too.
In this article, we’ll walk you through how to negotiate a better severance package in NJ, what to look for, and how an employment attorney can help you get more. Because this might be your last paycheck from them—but it doesn’t have to be on their terms.
What Is Severance—and Is It Required in NJ?
Let’s get one thing straight: severance pay is not legally required in New Jersey. Employers aren’t obligated to offer you anything unless:
- It’s promised in your employment contract or company policy
- You’re part of a group layoff covered by the WARN Act
- The employer wants to avoid potential legal action
So if you’re being offered severance, ask yourself: Why now? What are they protecting?
When Severance Is Required vs. When It’s Voluntary
When Severance Is Required | When Severance Is Voluntary |
|---|---|
| ✍️ Written Employment Contract — Severance terms are outlined in your offer or contract | 💼 At Employer’s Discretion — Offered to soften the blow or protect company interests |
| 🏢 Company Policy or Handbook — Internal policy promises severance under specific conditions | 📣 To Avoid Bad Publicity — Especially in high-profile terminations or layoffs |
| 👥 Mass Layoffs under the WARN Act — Applies to large-scale layoffs at covered employers | ⚖️ To Limit Legal Exposure — Employer suspects potential wrongful termination claims |
| 🤝 Union or Collective Bargaining Agreements — Severance negotiated on behalf of employees | 🧾 Custom Agreements — Employer uses severance as part of a negotiated exit |
💡 Just because severance is offered doesn’t mean it’s fair—or final. You can and should negotiate the terms.
Should You Always Negotiate a Severance Package?
Yes. Always. Severance agreements are written by employers, for employers. And they usually include language to:
- Limit what you can say about the company
- Prevent you from working for competitors
- Waive your right to sue—even if you were wrongfully terminated
If you’re giving up your legal rights, you deserve more in return.
You Have Leverage If:
- You’ve been a high-performing or long-term employee
- You’re in a protected class (e.g., age, disability, pregnancy)
- You’ve recently filed or considered filing a complaint (harassment, retaliation, wage violations)
- The employer wants to avoid bad publicity or litigation
“Even if you’re not planning to sue, the possibility gives you power. That’s why they’re offering severance in the first place.”
— Justin Swidler, Esq., Partner, Swartz Swidler LLC
What to Look for in Your Severance Agreement
What to Look for in Your Severance Agreement
Before you sign anything, take a close look at what you’re agreeing to:
Key Clauses to Review:
- Severance Amount: How many weeks or months? Is it based on your tenure or role?
- Payment Structure: Will it be a lump sum or spread over time?
- Benefits: Are they continuing health coverage or contributing to COBRA?
- Unpaid PTO/Vacation: Are they including accrued leave in your payout?
- Release of Claims: Are you giving up your right to sue for wrongful termination, discrimination, etc.?
- Non-Disparagement & Confidentiality: Will you be silenced from discussing your experience?
- Non-Compete Agreements: Can you still work in your field?
- References: Will they provide a neutral job reference or confirm your employment dates?
Employer Clauses vs. What You Can Negotiate
| Common Employer Clauses | What You Can Negotiate |
|---|---|
| 📄 Release of Claims — Waives your right to sue for wrongful termination | 💰 More Severance Pay — Especially if you have legal leverage or long tenure |
| 🚫 Non-Compete Agreement — Limits your ability to work in your industry | 🛑 Narrow or Remove Non-Compete — Reduce time, geography, or eliminate entirely |
| 🤐 Confidentiality/Non-Disparagement — Silences you from discussing terms | 📣 Mutual Non-Disparagement — Protects your reputation as well |
| 💼 No Job Reference Guarantee — May say nothing or give minimal details | 📜 Neutral Reference — Confirms dates/title, no negative remarks |
| 💸 No COBRA Contribution — You shoulder full healthcare costs | 🏥 COBRA Support — Ask employer to cover premiums for 1–3 months |
| 🕒 Lump-Sum Payout Only — Could impact unemployment eligibility | 📆 Installment Payout — May extend benefits and reduce tax impact |
Tip: Always review your agreement with an employment attorney before signing—many of these terms are negotiable with the right strategy.
10 Severance Negotiation Tips Every NJ Worker Should Know
1. Don’t Sign on the Spot
It’s common to feel pressure—but you’re legally entitled to time. Ask for at least 7–21 days to review.
2. Consult a Lawyer
A severance attorney can identify red flags and often negotiate significantly better terms.
3. Understand What You’re Giving Up
If there’s a general release of claims, you may be waiving your right to sue—even if you were wrongfully fired.
4. Push for More Money
Use your leverage—your performance, potential claims, or even just tenure—to ask for more severance.
5. Negotiate the Payout Timing
A lump sum could affect unemployment eligibility, while installment payments might help extend benefits.
6. Ask for COBRA Contributions
Healthcare is expensive. Employers often agree to pay part or all of your premiums for a set period.
7. Request a Neutral Reference
Make sure your exit won’t cost you future opportunities. A simple confirmation of employment dates can make a big difference.
8. Limit Restrictive Clauses
Push back on non-competes, non-disparagement clauses, and broad confidentiality agreements.
9. Get It All in Writing
Verbal promises are meaningless unless they’re in the final, signed agreement.
10. Stay Calm and Professional
Negotiation is a business transaction, not a personal attack. Be assertive but respectful.
How a Lawyer Can Help You Negotiate a Better Deal
Working with an experienced employment attorney can dramatically increase the value and fairness of your severance agreement.
Here’s What We Do at Swartz Swidler:
- Review the agreement for hidden clauses and legal traps
- Assess potential legal claims you may be waiving
- Negotiate stronger terms, including pay, benefits, and references
- Represent you if things escalate or turn contentious
“I almost signed my severance offer without a second thought. Swartz Swidler found language that would’ve blocked me from working in my field. They negotiated a better deal and gave me peace of mind.”
— Former Client, Camden, NJ
Severance and Legal Claims: What You Might Be Waiving
One of the most important reasons to consult a lawyer is that severance agreements often include a general release of claims. That means you give up the right to sue for:
- Discrimination or harassment (e.g., age, race, disability)
- Retaliation for reporting misconduct
- Wage and hour violations (e.g., unpaid overtime, misclassification)
- Wrongful termination
FAQs: Severance Agreements in New Jersey
- Is severance required in NJ?
- No—unless it’s part of a contract, policy, or triggered by a mass layoff.
- Can I collect unemployment if I get severance?
- Usually yes, after the severance period ends. Lump-sum payments may affect the timing.
- What if I don’t sign?
- You won’t get the severance pay—but you’ll keep your right to sue.
- Can I be forced to sign a non-compete?
- Not forced—but it may be a condition of receiving severance. A lawyer can help you negotiate it.
How long do I have to decide?
Most employers give at least 7–21 days, especially for workers over 40 (required under the Older Workers Benefit Protection Act).
Additional Resources
- Swartz Swidler – Severance Agreements
- NJ Department of Labor – Unemployment Benefits
- EEOC – Employee Rights
- Contact Swartz Swidler
Conclusion: Don’t Leave Money—or Rights—on the Table
Your severance package might be your last paycheck from your employer—but it doesn’t have to be a raw deal. Whether you were laid off, pushed out, or blindsided, you have options. You have rights.
At Swartz Swidler, we’ve helped hundreds of New Jersey workers secure stronger severance agreements, protect their reputations, and move forward with confidence.
📞 Call (856) 685-7420 or request your free consultation online today.
