What to Know Before Signing a Severance Agreement in New York City
July 30, 2025
What to Know Before Signing a Severance Agreement in New York City
When your employment ends, your employer may offer a severance agreement that includes compensation in exchange for waiving certain rights. While this might seem like a straightforward payout, it’s crucial to understand what you are agreeing to before signing anything. At LAWYERFORWORKERS, we assist New York City workers in reviewing and understanding severance agreements to ensure they’re not giving up more than they should.
A severance agreement is a legally binding contract between an employer and an employee that typically offers monetary compensation and sometimes other benefits—like extended health insurance or a positive reference—in exchange for the employee waiving certain legal claims. These claims can include wrongful termination, discrimination, wage disputes, and more.
Employers may frame the agreement as standard procedure, but its implications can be far-reaching. That’s why legal guidance is often necessary before signing.
Here are several important components commonly found in severance agreements:
New York employees are not legally required to accept a severance offer, and you are typically given time to review the agreement—especially if it includes a waiver of rights under laws like the Age Discrimination in Employment Act (ADEA), which mandates a 21-day consideration period.
Signing too quickly, without understanding what you are giving up, may limit your ability to bring valid legal claims or negotiate a better outcome.
You should consult with an attorney if:
At LAWYERFORWORKERS, we help New Yorkers understand the fine print, evaluate their rights, and negotiate fairer severance terms if needed.
 Understanding Severance Agreements
Key Elements to Look For
Here are several important components commonly found in severance agreements:
- Waiver of Claims: You may be asked to give up your right to sue your employer for anything that occurred during your employment.
- Non-Disparagement Clauses: These restrict you from making negative statements about your employer, which could affect your ability to share your experience honestly.
- Non-Compete or Non-Solicitation Provisions: These can limit your ability to work in the same industry or with former clients, potentially affecting future job opportunities.
- Confidentiality Agreements: You may be barred from disclosing details about your job or the severance terms.
Why You Shouldn’t Sign Right Away
When to Contact a Lawyer
You should consult with an attorney if:
- You believe you were wrongfully terminated or discriminated against.
- The agreement includes restrictive covenants like non-competes.
- The severance pay appears low compared to your tenure or role.
- You’re unsure about the legal language or your obligations under the agreement.
At LAWYERFORWORKERS, we help New Yorkers understand the fine print, evaluate their rights, and negotiate fairer severance terms if needed.
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