Losing your job is never easy. Whether it’s due to downsizing, restructuring, or a sudden termination, the emotional and financial toll can be overwhelming. In the midst of this upheaval, your employer may present you with a severance agreement, often with a deadline and a sense of urgency to sign quickly.
Severance agreements are contracts between an employer and an employee signed upon termination, and they can significantly impact your financial and professional future. But signing a severance agreement without first consulting an experienced Employment Law Attorney could lead to missed benefits and perhaps even a violation of your rights.
In this post, we’ll break down what severance agreements are, why they matter, and how a lawyer can help you protect your rights and negotiate better terms.
What Is a Severance Agreement?
A severance agreement is a contract between an employer and an employee that outlines the terms of separation. It typically includes:
- Severance pay
- Continuation of healthcare known as Consolidated Omnibus Budget Reconciliation Act (COBRA)
- Non-disclosure agreements (NDAs)
- Non-disparagement clauses
- Waivers of legal claims
- Return of company property
- Outplacement services or job search assistance
While these agreements may seem like a generous gesture, they are primarily designed to protect the employer, not the employee. In exchange for severance pay or benefits, you may be asked to give up your right to sue for wrongful termination, discrimination, retaliation, or other workplace violations.
Are Employers Required to Offer Severance Pay?
In Washington state, employers are not legally required to offer severance pay unless it’s promised in an employment contract, company manual, or union contract. That means severance is typically offered at the employer’s discretion.
However, if your employer has a history of offering severance packages or has made verbal or written promises, you may have a legal claim if they fail to follow through. An attorney can help you determine whether you’re entitled to more than what’s being offered.
Signing Without Legal Advice Could Be Risky
Severance agreements are drafted by lawyers for the employer’s benefit. They are often filled with legal jargon and clauses that can be difficult to interpret without legal training. Signing without fully understanding the implications can lead to serious consequences, including:
1. Waiving Your Right to Sue
Most severance agreements include a release of claims, which means you agree not to pursue legal action against your employer for any reason related to your employment or termination. This could include:
- Wrongful termination
- Discrimination
- Harassment
- Retaliation for whistleblowing or reporting misconduct
- Wage and hour violations
Once you sign, you may lose the ability to seek justice, even if your employer broke the law.
2. Unenforceable or Illegal Clauses
Some agreements include overly broad or illegal provisions. For example, Washington’s Silenced No More Act prohibits employers from using NDAs to prevent employees from speaking out about illegal acts such as discrimination, harassment, or wage theft. If your agreement includes such clauses, they may be unenforceable, but you need a lawyer to identify them.
3. Inadequate Compensation
Employers often offer the bare minimum in severance packages. Without legal representation, you may miss the opportunity to negotiate for:
- More severance pay
- Extended healthcare benefits
- A positive reference or neutral language in your personnel file
- Continued access to company resources (e.g., email, LinkedIn, or job search tools)
An attorney can assess the fairness of the offer and push for better terms.
How a Severance Pay Attorney Can Help
Consulting with an employment attorney before signing a severance agreement is one of the smartest moves you can make. Here’s how they can help:
1. Review the Agreement Thoroughly
An attorney will examine every clause in the agreement to ensure it complies with State and federal laws. They’ll flag any red flags, such as:
- Overly broad non-compete clauses
- Illegal NDAs
- Unfair waivers of rights
- Ambiguous or one-sided language
2. Negotiate Better Terms
You don’t have to accept the first offer. A lawyer can negotiate on your behalf to potentially secure:
- Higher severance pay
- Longer COBRA coverage
- Outplacement services
- A more favorable termination narrative
3. Protect Your Legal Rights
If you’ve been wrongfully terminated or subjected to illegal treatment at work, your attorney can help you explore legal options before you waive your rights. In some cases, pursuing a legal claim may be more beneficial than accepting a severance package.
4. Provide Peace of Mind
Knowing that a legal expert has reviewed your agreement can give you confidence and clarity during a difficult time. You’ll be able to move forward with your career without worrying about hidden consequences.
Why Choose Emery | Reddy?
At Emery | Reddy, PLLC, our team of employment attorneys and L&I experts has helped thousands of clients review, negotiate, and improve their severance agreements.
Our firm offers:
- Document reviews
- Deep knowledge of Washington State Employment Law
- A proven track record of results
Whether you’re facing a layoff, termination, or forced resignation, we’re here to help you protect your future.
