For departing employees
Before you sign on your way out: the release of claims, non-disparagement and confidentiality, restrictive covenants, the payment terms, references, and your time to consider, in plain English.
Updated June 28, 2026 · 5 min read
A severance agreement is signed at a stressful moment, on your way out of a job, and that pressure is exactly why its terms deserve a careful read. In exchange for a payment, you are usually giving up legal rights, and sometimes agreeing to restrictions that follow you to your next role.
This guide covers the clauses that most often matter in a severance or separation agreement: the release of claims you are signing away, non-disparagement and confidentiality, restrictive covenants, how and when you are paid, references, and the time you are given to consider and revoke.
It is general information, not legal advice. Severance agreements waive real legal rights; for anything significant, having an employment lawyer review it before you sign is well worth it.
The core of most severance deals is that you release the employer from legal claims in exchange for payment. The risk is a release so broad it waives claims you do not know you have, or rights that have value. Once signed, those claims are usually gone for good.
Ask for: Ask to understand exactly what claims you are releasing, and confirm the payment is genuinely more than you are already owed, you should get something real for the release.
Non-disparagement clauses often bar you from saying anything negative about the employer while leaving them free to speak about you. A one-way clause, or one so broad it chills an honest reference or a lawful complaint, is unbalanced.
Ask for: Ask to make non-disparagement mutual, and to carve out truthful statements to regulators, in legal proceedings, or as otherwise protected by law.
Watch for non-compete, non-solicit, or new confidentiality obligations introduced (or extended) in the severance document. Agreeing to them on the way out can limit your next job, sometimes for terms you never accepted while employed.
Ask for: Ask to remove or narrow any new or extended restrictions, and check whether they are even enforceable where you live before you accept them.
Check how and when severance is paid (lump sum vs instalments), what triggers it, and what happens to benefits, health cover, equity, and any bonus you have earned. Instalments tied to ongoing conditions can be cut off; earned compensation should not be bargained away.
Ask for: Ask for a clear payment schedule, confirmation that earned wages, bonus, and vested equity are paid regardless, and clarity on benefit continuation.
Some agreements control what the employer will say if a future employer calls, and whether you can be rehired. A vague or unfavourable reference clause can quietly hurt your next search.
Ask for: Ask for an agreed neutral or positive reference, and clarity on who handles reference calls and what they will confirm.
You should not be rushed. In many places, certain severance releases require a minimum consideration period and a revocation window, and a deal that pressures you to sign on the spot is a warning sign.
Ask for: Ask for adequate time to review (and to take legal advice), and confirm any consideration and revocation periods the law entitles you to.
The heart of a severance agreement is an exchange: money for a release of your legal claims. That makes the key question not just 'is the payment fair?' but 'what am I giving up, and is it worth it?' Some claims, around discrimination, unpaid wages, or retaliation, can be worth far more than the severance offered.
Before you sign, understand the scope of the release and whether you might have claims worth preserving. This is the single biggest reason to have an employment lawyer look at a severance deal, especially if the circumstances of your exit were not clean.
Employers sometimes present severance with a tight deadline and an air of 'take it or leave it'. Real pressure is understandable, but signing away legal rights under time pressure is exactly how people give up more than they meant to.
Use whatever consideration period you are entitled to, get the document reviewed, and negotiate the terms that matter, severance agreements are more negotiable than they look, particularly on references, restrictions, and the payment.
Paste the text, upload a PDF or DOCX, or transcribe a voice note. You get a plain-English risk report: an overall score, the specific clauses that matter with the exact contract text cited, and the key dates you need to track. ClauseShift does not keep the document you upload, only the report is saved to your account, and it trains no AI of its own on your contracts.
Start a free reviewRarely. You are usually waiving legal rights, so use any consideration period you are entitled to, and have it reviewed before signing. Urgency is a reason to slow down, not speed up.
Yes. It surfaces new or extended restrictive covenants and the scope of the release, quoting the exact clause so you can weigh it.
Often more than people think, especially references, restrictions, and the payment. The report helps you see which terms are worth pushing on.
No. A release waives real legal rights; use the report to get informed, then have an employment lawyer review anything significant.
ClauseShift does not keep the document you upload, only the report is stored to your account, and it trains no AI of its own on your contracts.
Last reviewed June 28, 2026. ClauseShift Review provides informational risk summaries and is not a substitute for legal advice.