Many employees have the same concerns when given a severance agreement to review and sign after being let go. Understanding these concerns early can help a terminated employee understand the implications of the severance package being offered and help the parties make good decisions when coming to an agreement.
This article outlines the top concerns employees have about severance agreements, based on real project data on ContractsCounsel, when connecting with an experienced employment lawyer to review and negotiate their severance.
Note: this analysis is based on anonymized data from thousands of severance agreement reviews posted on ContractsCounsel.
| Concern | Why It Matters | How Lawyers Help |
| Payment & Duration | Employees want fair pay and length of severance. | Lawyers compare terms and negotiate better payouts. |
| Release of Claims | Broad waivers can remove key rights. | Lawyers narrow language and protect employee rights. |
| Non-compete & Confidentiality | Restrictions can limit future work or speech. | Lawyers ensure terms are fair and enforceable. |
| Waiver of Benefits | Some deals ask workers to give up legal benefits. | Lawyers flag and remove unlawful waivers. |
| Timing & Bonuses | Unclear timing or bonus terms cause confusion. | Lawyers confirm when and how pay and equity are handled. |
| One-sided Language | Dense terms can hide unfair provisions. | Lawyers simplify and negotiate balanced terms. |
Payment Amounts and Severance Duration
Concern 1: The top concern among employees is related to the payment amount and how long the severance payments will last. Employees want to make sure the offered amount is fair for their tenure, position, and circumstances around their termination.
How lawyers help: An employment lawyer will compare the financial terms to industry standards and confirm whether the benefits offered match the contractual or legal rights. They can also help negotiate higher pay or longer duration, if possible.
Release of Claims Clauses
Concern 2: The release of claims clause requires the employee to waive any legal claims against their employer. Employees have concerns about how broad these waivers are, especially if their termination was contentious.
How lawyers help: Lawyers will review the language in the release clause to make sure it isn’t overly broad. They will also explain what rights the employee is waiving and can adjust language to create carveouts, where needed.
Non-compete, Confidentiality, and Non-disparagement Clauses
Concern 3: Employees often show concerns about any restrictions that may be in place after leaving the company. Non-competes can limit future employment. Confidentiality clauses may restrict their professional use of knowledge they gained during employment. Non-disparagement clauses can impact their ability to make statements about their previous employer. All of these terms have implications, so making sure they are fair is important.
How lawyers help: An employment attorney will review the language related to any post-work restrictions to make sure they aren’t overly broad and in line with industry standards. They will also make sure they are legal.
Waiver of Benefits and Ongoing Claims
Concern 4: Some severance packages attempt to make employees waive their rights to unemployment benefits, worker’s comp claims, and other rights. Employees are often concerned about these terms since they may be signing away protections.
How lawyers help: Lawyers will flag any clauses attempting to waive these rights. They will also explain the risks and help negotiate the removal of these provisions.
Timing of Payments and Inclusion of Bonuses or Stock
Concern 5: Employees are often concerned whether they will receive a lump sum or be paid in installments. If employees were on variable compensation plans (i.e., bonuses, commissions) or had equity (i.e., stock options ), they also are concerned what happens to those when terminated.
How lawyers help: Lawyers can review and confirm the timing of payments, as well as what happens to any accrued bonuses or commissions. If stock options or equity are involved, they can confirm what happens to them. Lawyers can also help negotiate to secure amounts that may be owed legally to the employee.
Complex or One-Sided Language
Concern 6: Severance agreements are often full of heavy legal language. A common concern employees have is that they may not fully understand the agreement and worry that it is one-sided in favor of the employer.
How lawyers help: Employment attorneys can explain the agreement in simple language and make sure any provisions that are extremely one-sided are negotiated to be made more fair.
Key Takeaways
- Employees are most concerned about the amount of severance pay, how long they will last, and their continuation of benefits.
- Employees often show concern about clauses that may restrict their rights to future employment or their ability to file claims against their employer.
- Waivers of unemployment or ongoing claims should be carefully reviewed.
- A lawyer ensures payments are fair, language is balanced, and enforceability is clear before signing.
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