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Should You Sign That Severance Agreement? A 12-Point Review Before You Do

A severance agreement is usually a trade: money and terms in exchange for your legal claims. Know exactly what you are giving up and getting before you sign.

By Noël Tarquinii, SHRM-SCPFounder, Workplace Intelligence7 min readUpdated September 2026
The short answer

Not until you understand what you are releasing, what you are receiving beyond what you are already owed, and what you are agreeing not to do afterward. Review the release, payment terms, bonus and equity, benefits, restrictive covenants, confidentiality, reference, and deadlines. If you are 40 or older, you generally have 21 days to consider and 7 days to revoke.

Severance agreements are written by the company to protect the company. That is not a criticism; it is the purpose of the document. Your job is to understand the trade before you accept it. Use this review before you sign anything.

The 12-point review

  1. What claims am I releasing?Most agreements include a broad release of known and unknown claims. Some rights cannot be waived: agreements generally cannot stop you from filing a charge with the EEOC or participating in an agency investigation, and SEC rules bar companies from impeding whistleblower communications with the SEC.
  2. Am I getting more than I am already owed?Final pay, accrued vacation where state law requires it, vested retirement benefits, and vested equity are generally yours regardless. The severance should be something additional.
  3. How much time do I have?If you are 40 or older and the release covers age claims, federal law generally requires 21 days to consider (45 in a group program) and 7 days to revoke after signing. Check the dates in the document.
  4. When and how will I be paid?Lump sum or installments, the start date, and any conditions that could stop payments or require repayment.
  5. What happens to my bonus?Whether a current-year or earned bonus is paid, prorated, or forfeited.
  6. What happens to my equity?Unvested shares, any acceleration, and the deadline to exercise options. Missing an exercise window can cost more than the severance itself.
  7. Health coverage.Whether the company pays COBRA premiums, for how long, and what happens if you start a new job.
  8. Restrictive covenants.Non-compete, non-solicit, and no-hire terms: their scope, length, and geography. Enforceability varies by state, and the FTC's proposed nationwide non-compete ban never took effect.
  9. Confidentiality and non-disparagement.Whether they are mutual. Federal law limits pre-dispute nondisclosure and non-disparagement clauses in sexual harassment and sexual assault disputes.
  10. How the exit is described.Resignation or termination, the announcement language, and an agreed reference or neutral reference policy.
  11. Cooperation and return of property.Whether future cooperation is paid for your time, and what you may keep, such as your own compensation records and personal contacts.
  12. Protection that should survive.For officers and directors, confirmation that indemnification rights and D&O insurance coverage continue for past service.

When not to sign quickly

Slow down if you raised concerns about misconduct, safety, discrimination, or financial reporting before the decision; if you recently took medical or family leave or requested an accommodation; if you were treated differently from peers; or if the numbers are significant. In those situations the release may be worth considerably more to the company than the offer reflects, and legal review is essential.

Common questions

Do I have to sign a severance agreement?

No. If you do not sign, you usually do not receive the severance consideration, but you keep any claims you have and anything you are already owed, such as final pay and vested benefits.

How long do I have to sign a severance agreement?

It depends on the agreement and your age. If you are 40 or older and are releasing age claims, federal law generally requires 21 days to consider (45 in a group program) plus a 7-day revocation period. Otherwise, the deadline is whatever the agreement states, and extensions are often possible if you ask.

Can a severance agreement stop me from going to the EEOC?

No. A severance agreement cannot lawfully prevent you from filing a charge with the EEOC or participating in its investigation, although you may give up the right to recover money personally.

When to bring in counsel

Have an employment attorney review any severance agreement before you sign, and especially if you believe the separation is connected to a complaint, leave, age, or other protected activity. Workplace Intelligence helps you understand your position and negotiate strategically; it does not provide legal advice.

For executives and senior leaders

Your next move matters. Do not guess.

Private advisory with Noël Tarquinii for executives facing a separation, a performance plan, an investigation, or a board conflict. Confidential, strategic, and built on 30+ years in executive leadership, the C-suite, and Executive HR.

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