Can You Negotiate Your Severance? Yes. Almost Always.

Lawyers for your employer created the severance agreement you received. Shouldn’t you have a lawyer on your side review it too?

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You’ve Been Laid Off. Now What?

Your employer hands you an envelope or calls you into a meeting. “We’ve decided to let you go,” they say. And before you can even process what’s happening, they slide a document across the table: a severance agreement, also called a separation agreement.

Your mind is reeling. You’re worried about money, your health insurance, your next job. And now they want you to sign this agreement. The pressure feels immediate. The deadline feels urgent.

But here’s what you need to know: You don’t have to accept the first offer, and you absolutely can negotiate your severance.

Why Severance Agreements Are Negotiable

Your Employer Has Leverage—But So Do You

The severance agreement your employer handed you wasn’t written by chance. It was carefully drafted by their lawyers to protect the company and minimize their financial exposure. The terms, the amount, the conditions—all of it was strategically designed.

But here’s the thing: your employer would prefer you sign quickly and quietly. They want to avoid litigation, bad press, and uncertainty. That’s leverage you have.

Everything Is Up for Discussion

Nothing in a severance agreement is set in stone. Everything is negotiable:

Severance amount: How much money they’re offering
Duration of health insurance: COBRA coverage or extended benefits
Outplacement services: Job search assistance and coaching
Reference: What your employer will say about you to future employers
Non-disparagement clause: Whether you can speak negatively about the company
Non-compete agreement: Restrictions on working for competitors
Release of claims: What you’re giving up legally
Timeline: How long you have to consider and sign

The company’s opening offer is just that—an opening position. It’s not the final word.

What You’re Signing Away (And Why It Matters)

⚠️ Critical: By signing a severance agreement, you’re typically waiving your right to sue your employer for discrimination, wrongful termination, breach of contract, and other legal claims. This is why you need a lawyer to review it before you sign.

The “Release of Claims”

The most important part of any severance agreement is the “release of claims” section. This is where you’re agreeing not to sue your employer for various reasons, including:

Discrimination (race, gender, age, disability, religion, etc.)
Harassment or retaliation
Unpaid wages or overtime
Breach of employment contract
Wrongful termination
Violations of workplace laws

By signing this, you’re giving up potential legal claims that could be worth significantly more than the severance offer.

Non-Compete and Non-Disparagement Clauses

Some severance agreements include restrictive covenants that limit where you can work or what you can say about your former employer. These can seriously impact your career prospects and your ability to warn others about workplace problems.

How to Negotiate Your Severance (Step-by-Step)

Step 1: Don’t Sign Immediately

The employer will likely pressure you to sign quickly. Don’t. You have time. In most cases, you have at least a few days (sometimes weeks). Use that time wisely.

Pro Tip: Federal law (ADEA) requires at least 21 days to review severance if you’re over 40 and over. Use every day of that time.

Step 2: Hire an Employment Lawyer

This is the most important step. An employment attorney can:

Review the severance agreement for unfavorable terms
Identify what legal claims you might have
Determine if your severance package is fair
Negotiate with your employer on your behalf
Protect you from signing away valuable rights

The cost of hiring an attorney is almost always worth it when you’re being offered severance worth months of salary.

Step 3: Prepare Your Negotiation Strategy

With your lawyer, identify:

What terms are most important to you (money, health insurance, references, etc.)
What you’re willing to compromise on
What legal claims you might have (your leverage)
Your walk-away number (the minimum you’ll accept)

Step 4: Negotiate

Have your attorney reach out to the company’s legal counsel or HR department. Most employers are prepared for negotiation and expect it. Common negotiation points include:

Increasing severance: Adding weeks or months of additional pay
Extending health insurance: 6-12 months of COBRA or company-paid coverage
Adding outplacement services: Job coaching and career counseling
Modifying non-compete: Narrowing the scope, duration, or geographic area
Improving reference: Ensuring they’ll give you a positive reference
Removing non-disparagement: Or narrowing what you can’t say

Step 5: Get It in Writing

Once you’ve negotiated changes, make sure every change is documented in writing. Don’t rely on verbal promises. If it’s not in the agreement, it didn’t happen.

Red Flags in Severance Agreements

Watch out for these problematic provisions:

Overly Broad Non-Compete

A non-compete that prevents you from working in your industry for 2+ years, covers a huge geographic area, or has vague restrictions can seriously limit your career options. Negotiate to narrow it.

Indefinite Non-Disparagement

A clause that prevents you from ever saying anything negative about the company, even truthful statements, can be problematic. Limit this to a specific time period (e.g., 12 months).

Clawback Provisions

Some agreements say the company can take back the severance if you violate certain terms. Make sure you understand exactly what triggers a clawback.

Unclear Waiver Language

If the release of claims section is vague or overly broad, it might waive more rights than intended. Your lawyer should clarify exactly what you’re giving up.

Insufficient Severance Amount

If you were let go without cause (not for misconduct), severance is often negotiable. 1-2 weeks of pay per year of service is common, but you can push for more.

Special Situations: When Severance Is Especially Valuable

If You Were Over 40

If you’re 40 or older, you have additional protections under the Age Discrimination in Employment Act (ADEA). Your severance package might be worth more because you have a potential age discrimination claim.

If You Were a Protected Class Member

If you’re a woman, person of color, person with a disability, or member of any other protected class, and your layoff seems suspicious, you have potential discrimination claims. That increases your negotiating power.

If You Were Recently Terminated “For Cause”

If the company is claiming you were fired for misconduct but offering severance, they may be concerned about litigation. You likely have more negotiating power than you think.

If You Had a Long Tenure

The longer you worked for the company, the stronger your negotiating position. You’ve contributed significantly to their success and likely have deeper knowledge of internal operations.

What a “Fair” Severance Package Looks Like

There’s no universal standard for severance, but here are benchmarks to consider:

Severance Pay

Standard: 1-2 weeks per year of service
Generous: 3+ weeks per year of service
Minimum acceptable: Whatever your lawyer says is reasonable for your situation

Health Insurance

Standard: COBRA eligibility (you pay full premium)
Generous: Company-subsidized COBRA or extended coverage
Ideal: 6-12 months of company-paid health insurance

Additional Benefits

Outplacement services (job coaching, resume help, interview prep)
Positive reference from your former manager
Accrued vacation/PTO paid out
Continued 401(k) contributions during severance period

The Bottom Line: Don’t Leave Money on the Table

Your employer spent money on lawyers to protect themselves. The severance agreement they handed you was written by people whose job is to minimize the company’s exposure and maximize what you give up.

You deserve someone in your corner too. Hiring an employment lawyer to review and negotiate your severance isn’t an expense—it’s an investment that almost always pays for itself.

Your severance is negotiable. Almost always. Use that power.

Get Expert Guidance on Your Severance

If you’ve received a severance agreement and want to understand your options, Giordano Law Office can help. We’ve negotiated countless severance packages and know how to get our clients better terms.

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