Should I Sign a Severance Agreement Without a Lawyer Reviewing It?

Published by: Swartz Swidler LLC
Last updated: 06/12/2026
Jurisdiction note: This article is for employees in New Jersey, Pennsylvania, Philadelphia, and South Jersey. Severance agreement rights and deadlines can vary based on the agreement, the employee’s age, the employer, the reason for separation, and applicable federal, state, or local law. This article is for general informational purposes only and is not legal advice.

Direct Answer

You usually should not sign a severance agreement without understanding what rights you are giving up. A severance agreement is not just a payment offer. It is often a legal contract that may require you to waive claims against your employer, accept confidentiality restrictions, agree to non-disparagement language, limit future employment options, or give up leverage related to unpaid wages, discrimination, retaliation, harassment, leave violations, or wrongful termination.

Not every severance agreement is unfair. Some are reasonable. Some can be negotiated. Some may be the best practical option. But once you sign, your ability to challenge the termination or pursue certain claims may be limited.

If you were fired, laid off, pushed out, or asked to resign and then offered severance, it may be wise to have an employment lawyer review the agreement before signing.

Quick Summary: When You Should Be Careful Before Signing

You may want legal review before signing a severance agreement if:

• You believe you were wrongfully terminated.
• You reported harassment, discrimination, wage violations, safety issues, or illegal conduct before being fired.
• You were fired after requesting medical leave, FMLA leave, disability accommodations, or pregnancy accommodations.
• You are being asked to waive legal claims.
• You are over 40 and the agreement includes an age-discrimination release.
• You are being pressured to sign quickly.
• The severance amount seems low compared with your tenure, role, or potential claims.
• The agreement includes confidentiality, non-disparagement, non-compete, non-solicitation, or cooperation clauses.
• You are owed commissions, bonuses, PTO, expense reimbursements, overtime, or final wages.
• You do not understand what the agreement means.
• You want to negotiate better pay, benefits, references, timing, or language.

The key point is simple: severance pay is only one part of the agreement. The restrictions and rights you give up may matter just as much.

What Is a Severance Agreement?

A severance agreement is a contract between an employer and an employee, usually offered when employment ends. The employer may offer money, benefits, continued health coverage contributions, outplacement services, a neutral reference, or other terms. In exchange, the employee is often asked to release legal claims and agree to certain restrictions.

A severance agreement may be offered after:

• A layoff
• Job elimination
• Termination
• Resignation
• Reduction in force
• Performance-related separation
• Settlement of a workplace dispute
• Negotiated exit from the company

The agreement may look routine, but it can have serious legal consequences. Many employees focus only on the severance amount and overlook the legal release, confidentiality terms, repayment provisions, restrictive covenants, and deadlines.

If you are trying to understand severance basics, Swartz Swidler’s guide on severance agreements may be a useful companion resource.

Why Employers Offer Severance Agreements

Employers do not usually offer severance out of generosity alone. They often want certainty, finality, and protection from future claims.

A severance agreement may help an employer:

• Avoid potential lawsuits
• Resolve workplace disputes
• Reduce the risk of discrimination, retaliation, wage, or wrongful termination claims
• Protect confidential business information
• Control public statements about the separation
• Prevent former employees from soliciting clients or coworkers
• Secure cooperation after termination
• Create a clean end to the employment relationship

That does not mean the agreement is automatically bad. But employees should understand that the employer’s goal is not the same as the employee’s goal. Your goal is to protect your rights, understand the value of what you are signing away, and make an informed decision.

What Rights Might You Be Giving Up?

Most severance agreements include a release of claims. This means you agree not to sue the employer for certain claims related to your employment or separation.

Depending on the language, a release may cover claims involving:

• Wrongful termination
• Discrimination
• Sexual harassment
• Retaliation
• Disability accommodation issues
• Pregnancy discrimination
• Family or medical leave issues
• Wage and hour disputes
• Unpaid commissions or bonuses
• Contract claims
• Whistleblower-related claims
• Emotional distress claims
• Claims under federal, state, or local employment laws

Some claims may not be waivable in the same way, and some rights may be preserved by law even after signing. But employees should not assume that important rights survive the agreement. The language matters.

This is one reason legal review can be important. An employment lawyer can help identify what claims may be waived, what rights may remain, and whether the severance offer fairly accounts for the risk the employer is asking you to release.

You May Want to Speak With an Employment Lawyer Before Signing If…

You may want to have a New Jersey or Pennsylvania employment lawyer review the severance agreement before signing if any of the following apply:

• You were fired shortly after reporting harassment, discrimination, wage issues, safety concerns, fraud, or other workplace misconduct.
• You requested medical leave, FMLA leave, pregnancy accommodations, disability accommodations, or religious accommodations before being terminated.
• You are being asked to waive claims you do not fully understand.
• You are over 40 and the agreement includes an age-discrimination release.
• The employer gave you a short deadline or pressured you to sign immediately.
• The agreement includes confidentiality, non-disparagement, non-compete, non-solicitation, no-rehire, cooperation, or repayment language.
• You believe you are owed wages, commissions, bonuses, PTO, reimbursements, or overtime.
• The severance amount seems low compared with your tenure, position, compensation, or potential claims.
• You want to negotiate better pay, benefits, reference language, or narrower restrictions.
• You are not sure whether signing will affect an EEOC, PHRC, NJDCR, wage, retaliation, or wrongful termination claim.

Legal review does not mean you have to reject the agreement. It helps you understand the tradeoff before you sign.

Is the Severance Amount Fair?

There is no universal formula that tells every employee whether a severance offer is fair. Some employers use a formula, such as one or two weeks of pay per year of service. Others offer a flat amount. Some offer very little unless the employee pushes back.

Factors that may affect whether severance is reasonable include:

• Length of employment
• Job title and compensation
• Company policy or past practice
• Whether the termination may have been unlawful
• Whether the employer followed its own procedures
• Whether you have unpaid wages, bonuses, commissions, or PTO
• Whether you are giving up strong legal claims
• Whether the agreement includes restrictive terms
• Whether you need continued health coverage
• Whether you can negotiate a neutral reference
• Whether the employer needs cooperation or transition help

The question is not only “How much money is being offered?” The better question is: What am I giving up in exchange for this amount?

Common Severance Agreement Terms Employees Should Review Carefully

Severance agreements can include many provisions that affect your future rights and options.

Release of Claims

This is often the most important part of the agreement. It may say you waive all known and unknown claims related to your employment or termination.

Before signing, ask:

• What claims am I releasing?
• Does this include discrimination or retaliation claims?
• Does this include wage claims?
• Does this include claims I do not yet know about?
• Does the release apply only to the employer or also related entities and individuals?

Confidentiality Clause

A confidentiality clause may limit what you can say about the agreement, the severance amount, the company, or the facts surrounding your separation.

Before signing, ask:

• Can I talk to my spouse, accountant, financial advisor, or lawyer?
• Can I cooperate with a government agency?
• Can I discuss workplace issues with former coworkers?
• Is the confidentiality language too broad?
• What happens if the employer claims I violated it?

Non-Disparagement Clause

A non-disparagement clause may restrict negative statements about the employer, managers, employees, products, or business practices.

Before signing, ask:

• Is the clause one-sided or mutual?
• What counts as disparagement?
• Can I respond truthfully if asked about my employment?
• Can I report illegal conduct or cooperate with an investigation?
• Does the agreement include penalties for alleged violations?

Non-Compete or Non-Solicitation Language

Some agreements may include restrictions on where you can work, who you can contact, or whether you can solicit clients, customers, vendors, or employees.

Before signing, ask:

• Will this affect my next job?
• Can I work for a competitor?
• Can I contact former clients or coworkers?
• Does the restriction apply geographically?
• How long does it last?
• Is it enforceable under the applicable law?

Cooperation Clause

A cooperation clause may require you to help the employer with future investigations, litigation, audits, or transitions.

Before signing, ask:

• How much time could this require?
• Will I be paid for future cooperation?
• Will expenses be reimbursed?
• Can cooperation interfere with my next job?
• Does the clause require me to support the employer’s position?

Return of Property and Confidential Information

These clauses may require you to return laptops, phones, documents, data, files, badges, keys, and company property.

Before signing, ask:

• What exactly must I return?
• By what deadline?
• Do I need confirmation that property was received?
• What happens if personal information is on a company device?
• Am I allowed to keep copies of employment records, pay stubs, or benefit documents?

No-Rehire Clause

Some agreements may say you cannot apply for future employment with the company or related entities.

Before signing, ask:

• Does this apply only to the employer or also affiliates?
• Could this affect future opportunities?
• Does it apply permanently?
• Is the company part of a larger corporate group?

Special Caution for Employees Over 40

If you are 40 or older and the severance agreement asks you to waive age discrimination claims, special federal rules may apply. These rules may require specific language, a meaningful period to consider the agreement, and a revocation period after signing.

Employees over 40 should be especially careful before signing because the agreement may involve age-discrimination waiver requirements that are not obvious at first glance.

Questions to ask include:

• Does the agreement release age discrimination claims?
• Does it tell me to consult a lawyer?
• How long do I have to consider the agreement?
• Do I have a revocation period after signing?
• Was I given required information in a group layoff or reduction in force?
• Is the release written clearly enough to understand?

If you are over 40 and part of a layoff or reduction in force, do not assume the agreement is valid just because the employer provided it. Legal review may help determine whether the agreement complies with applicable waiver requirements.

What If I Was Fired After Reporting Harassment or Discrimination?

If you were fired after reporting harassment or discrimination, a severance agreement deserves careful review.

A severance agreement may ask you to waive claims involving:

• Sexual harassment
• Race discrimination
• Disability discrimination
• Pregnancy discrimination
• Age discrimination
• Religious discrimination
• National origin discrimination
• Gender discrimination
• Sexual orientation or gender identity discrimination
• Retaliation after reporting misconduct

The timing matters. If you complained to HR, filed an internal report, participated in an investigation, or supported a coworker’s complaint shortly before termination, you may have potential retaliation concerns.

In that situation, the severance offer may not simply be a standard exit package. It may be the employer’s attempt to secure a broad release before you fully understand your rights.

Swartz Swidler has related guidance on workplace retaliation, sexual harassment, and employment attorneys in Pennsylvania.

What If I Was Fired After Requesting Medical Leave or an Accommodation?

A severance agreement may also require caution if you were terminated after requesting medical leave, FMLA leave, disability accommodations, pregnancy accommodations, or time off for a serious health condition.

Potential legal issues may include:

• FMLA interference
• FMLA retaliation
• Disability discrimination
• Failure to accommodate
• Pregnancy discrimination
• Retaliation for requesting protected leave
• Wrongful termination
• Related state-law claims

Before signing, ask whether the severance payment fairly accounts for any possible claims you may be releasing.

If leave or accommodation issues were part of your termination, Swartz Swidler’s FMLA FAQ and article on FMLA retaliation may help you understand related issues.

What If I Am Owed Wages, Commissions, Bonuses, PTO, or Overtime?

Severance agreements can become more complicated when the employer also owes you money.

Before signing, determine whether the severance amount is separate from money you may already be owed, such as:

• Final wages
• Unpaid overtime
• Earned commissions
• Bonuses
• Accrued PTO or vacation where payable
• Expense reimbursements
• Shift differentials
• Tips or service charges
• Promised incentive pay

An employer should not use severance language to confuse earned wages with extra severance consideration. If the agreement is unclear, a lawyer can help identify whether you are receiving new value or merely being paid money you were already owed.

For related wage issues, review Swartz Swidler’s guidance on unpaid wages, overtime cases, and salaried overtime concerns.

Should I Negotiate a Severance Agreement?

Many employees do not realize that severance agreements may be negotiable. Whether negotiation makes sense depends on the facts, the employer, the employee’s leverage, the claims being released, and the employee’s goals.

Possible negotiation points include:

• More severance pay
• Longer benefit continuation
• Neutral reference language
• Mutual non-disparagement
• Narrower confidentiality terms
• Payment of commissions, bonuses, PTO, or reimbursements
• Removal or narrowing of restrictive covenants
• More time to consider the agreement
• Better tax allocation language
• Outplacement support
• Confirmation of job title and dates of employment
• Non-admission language
• Clarification of unemployment-related language

Negotiation does not always mean threatening a lawsuit. Sometimes it means identifying problems in the agreement and asking for more balanced terms.

If you want to understand what may be negotiable, Swartz Swidler’s article on severance negotiation tips may be helpful.

What Should I Do Before Signing a Severance Agreement?

Before signing, consider these steps:

1. Read the entire agreement slowly.
   Do not focus only on the payment amount.
2. Identify the deadline.
   Note when the agreement must be signed and whether there is a revocation period.
3. List what you are giving up.
   Look for release, confidentiality, non-disparagement, non-compete, non-solicitation, cooperation, and no-rehire clauses.
4. Gather your employment documents.
   Save the offer letter, employment agreement, handbook, pay stubs, termination notice, performance reviews, emails, complaints, leave paperwork, and any severance documents.
5. Write a short timeline.
   Include key events leading up to termination, such as complaints, leave requests, discipline, performance reviews, or wage disputes.
6. Check for unpaid compensation.
   Review whether you are owed wages, commissions, bonuses, PTO, reimbursements, or overtime.
7. Do not assume the offer is final.
   Some terms may be negotiable.
8. Avoid signing under pressure.
   If you do not understand the agreement, ask for time to review it.
9. Speak with an employment lawyer before signing if legal claims may exist.
   This is especially important if you were fired after reporting misconduct, requesting leave, asking for accommodations, or raising wage concerns.

What Documents Should You Send to a Lawyer for Severance Review?

A lawyer can usually review the agreement more effectively if you provide context.

Helpful documents may include:

• The severance agreement
• Termination letter
• Offer letter
• Employment contract
• Employee handbook
• Pay stubs
• Commission or bonus plan
• PTO or vacation policy
• Recent performance reviews
• Disciplinary notices
• HR complaints
• Emails or texts related to termination
• Leave or accommodation paperwork
• Restrictive covenant agreements
• Non-compete or non-solicitation agreements
• A timeline of key events
• Your main goals or concerns

You do not need to have every document before asking for help. But the more context you provide, the more meaningful the review may be.

What Are Signs You Should Not Sign Yet?

You may want to pause before signing if:

• You do not understand the release language.
• You believe the termination was unlawful.
• You were fired shortly after reporting harassment, discrimination, wage issues, or safety concerns.
• You were fired after requesting medical leave or an accommodation.
• The agreement includes broad confidentiality or non-disparagement language.
• The agreement restricts your next job.
• You are owed wages, commissions, bonuses, PTO, or overtime.
• You are over 40 and do not understand your age-discrimination waiver rights.
• The employer is pressuring you to sign immediately.
• The agreement includes penalties if you violate unclear terms.
• You want to negotiate but are unsure what to ask for.

A short delay for legal review can be worthwhile if the agreement affects your claims, income, future job options, reputation, or ability to speak about what happened.

Can I Still File an EEOC, PHRC, or NJDCR Charge After Signing?

Some severance agreements may try to limit what an employee can do after signing. However, employees often retain certain rights to communicate with government agencies, file charges, participate in investigations, or provide truthful information to regulators.

That does not always mean you can recover money after signing a release, and the details can be complicated. But an agreement should not be read casually when it discusses agency charges, cooperation, reporting rights, or waivers of recovery.

If you have already filed a charge, are considering filing one, or believe your employer is trying to stop you from reporting unlawful conduct, legal review is especially important.

Is a Severance Agreement the Same as a Settlement?

Not always.

A severance agreement is often offered at the end of employment even when no formal legal claim has been filed. A settlement agreement usually resolves an existing dispute, claim, charge, demand, lawsuit, or threatened legal action.

That said, severance agreements can operate like settlements because they often require a broad release of claims. Even if you have not filed anything, you may be giving up claims that could have legal value.

This is why context matters. A severance offer after a routine layoff may be very different from a severance offer after you reported harassment, requested medical leave, complained about unpaid wages, or raised discrimination concerns.

Should I Sign if I Need the Money?

Many employees feel pressure to sign because they need income after losing a job. That pressure is real. Legal review does not mean you cannot accept the severance. It means you should understand the tradeoff before making a decision.

A lawyer may help you evaluate:

• Whether the agreement is reasonably fair
• Whether you have potential claims
• Whether the offer can be improved
• Whether the agreement contains risky terms
• Whether signing will affect future options
• Whether deadlines apply
• Whether negotiation is practical

Sometimes signing is the right decision. Sometimes negotiating is better. Sometimes the agreement raises serious concerns. The point is to make the decision with your eyes open.

Bottom Line

You should be careful before signing a severance agreement without a lawyer reviewing it. Severance agreements often ask employees to give up legal claims and accept restrictions that may affect future employment, speech, compensation, benefits, and legal options.

Before signing, ask:

• What claims am I releasing?
• What money am I receiving?
• Am I owed wages, commissions, PTO, bonuses, or overtime separately?
• Was my termination connected to discrimination, harassment, retaliation, medical leave, disability, pregnancy, whistleblowing, or wage complaints?
• Am I over 40 and releasing age discrimination claims?
• Does the agreement limit what I can say or where I can work?
• Can I negotiate better terms?
• What happens if I sign and later regret it?

If you were offered a severance agreement in New Jersey, Pennsylvania, Philadelphia, or South Jersey, Swartz Swidler LLC can help you understand what the agreement means, what rights may be affected, and whether the terms deserve negotiation before you sign. Getting guidance before signing may help you avoid giving up important rights without understanding their value.

To discuss a severance agreement, contact Swartz Swidler LLC before the signing deadline if possible.

Frequently Asked Questions

Should I sign a severance agreement without a lawyer?

It is usually safer to have a lawyer review a severance agreement before signing, especially if you are waiving legal claims, were recently fired, believe the termination was unfair, or do not understand the restrictions.

Can a severance agreement take away my right to sue?

A severance agreement may require you to release certain legal claims against your employer. The exact effect depends on the language of the agreement and the type of claim involved.

Is severance pay required by law?

Severance pay is not always required by law. It often depends on an employer policy, employment agreement, union agreement, severance plan, or negotiated contract.

Can I negotiate a severance agreement?

Yes, some severance agreements can be negotiated. Potential negotiation points include more pay, benefits, neutral reference language, confidentiality terms, non-disparagement language, restrictive covenants, and payment of earned compensation.

What if I was fired after reporting harassment or discrimination?

If you were fired after reporting harassment or discrimination, the severance agreement may require you to waive retaliation or discrimination claims. You should consider legal review before signing.

What if I am over 40?

Employees over 40 may have special rights when asked to waive age discrimination claims. The agreement may need to meet specific requirements, including time to consider the agreement and a revocation period.

Can I still file a government agency charge after signing?

Some rights to communicate with government agencies or participate in investigations may remain even after signing. However, the agreement may affect whether you can recover certain money or pursue certain claims, so legal review is important.

What documents should I give a lawyer for severance review?

Provide the severance agreement, termination letter, offer letter, employee handbook, pay records, performance reviews, HR complaints, leave paperwork, and a short timeline of key events.

What if the employer gave me only a few days to sign?

Do not assume you must sign immediately. Depending on the circumstances, you may be able to ask for more time. If you are over 40 or part of a group layoff, special timing rules may apply to certain waivers.

What if I already signed the severance agreement?

If you already signed, speak with an employment lawyer promptly. There may be a revocation period in some agreements, and a lawyer can help you understand what rights may remain.