What are the red flags in a severance agreement?

The ones that matter most are an overbroad or one-way release of claims, being pressured to sign too quickly, broad non-disparagement or confidentiality with no carve-outs, a claw-back, and prior non-competes that carry over. The payment is only half the deal — the release is the other half.

How long do I have to review a severance agreement?

It varies, but for older workers the law generally provides a period to consider the agreement and a window to revoke after signing, and you are generally not required to sign on the spot. Confirm the time you are given, and treat pressure to sign immediately as a flag.

Can I negotiate severance?

Severance terms are commonly negotiated — the amount, the reference language, the scope of the release, benefit continuation, and timing. Whether the employer will move depends on the situation, but the first offer is a starting position.

Should a severance agreement be reviewed by an attorney?

Because a release of claims is difficult to reverse, severance agreements are commonly reviewed by an employment lawyer before signing. A scan can surface the release scope and the ongoing obligations; the legal judgment about what to do is yours.

Severance Agreement Red Flags: What to Check Before You Sign

A severance agreement is a trade: the employer offers money, and in exchange you usually give up the right to sue and agree to ongoing obligations. It is typically presented at a stressful moment, with a deadline. Reading what you are giving up — not just the payment — is the whole point.

This is an observational walk through severance red flags. It is general information, not advice about your agreement. The legal judgment about what to do with what you find is yours.

1. The release of claims

The core of most severance agreements is a general release — you waive claims against the employer. Confirm how broad it is, whether it is mutual, and what (if anything) is carved out. Some claims generally cannot be waived, and what is waivable can vary, so understanding what you are releasing is the trade you are actually making.

2. The time to review and revoke

For older workers in particular, the law provides specific periods to consider a release and to revoke it after signing, and bars pressuring you to sign on the spot. Confirm the agreement gives you adequate time to review, that you are not being rushed, and whether you retain a right to revoke after signing. If you feel pressured to sign immediately, that itself is a flag.

3. Non-disparagement and confidentiality

Confirm whether you are agreeing not to disparage the employer, and whether that is mutual. Confirm any confidentiality obligation about the agreement or your employment, and note that some jurisdictions limit confidentiality and non-disparagement terms around certain kinds of claims.

4. Claw-backs, references, and ongoing obligations

Claw-back. Confirm whether severance must be repaid if you breach a term.
References. Confirm what the employer will say about you (neutral reference language is commonly negotiated).
Cooperation / non-compete carryover. Confirm any ongoing cooperation duty and whether prior restrictive covenants survive.

5. What is actually being paid

Confirm the amount, the timing, the form (lump sum vs continuation), and the treatment of benefits (health-coverage continuation, unused PTO, equity vesting). The payment number means less without these details.

How to use this

Weigh what you are being paid against what you are giving up — the release scope, the ongoing obligations, and any carryover restrictions. Mark every item you cannot answer, and note that severance agreements are commonly reviewed by an employment lawyer before signing, precisely because the release is hard to undo. Many terms (amount, references, release scope, timing) are commonly negotiated, and the time-to-review exists so you do not have to decide instantly. What you do with that information is your call.