Understanding Your Severance Agreement

When an employee’s employment is “at will”, this means that an employee can either quit or be fired at any point during their employment. Which means that in the case of either of these scenarios, an employee may not receive compensation once employment has been severed.

However, many employers will use a severance agreement in order to let the employee go without any potential issues.

Understanding Your Rights

It is critical, however, that employees know their rights and what they may possibly be giving up when signing a severance agreement.

Here are a few reasons why it is always best to consult with an employment attorney before signing your severance agreement:

Severance Pay

When it comes to receiving severance pay, many employees believe that they are required to sign a severance agreement. While in most cases this is true, there are some employees out there that are entitled to severance pay either through their contract or according to company policy. For this reason, it is important to consult with an attorney to ensure you are not signing an agreement that is not necessary.

Owed Money

When an employee is terminated, he or she may be required to pay back unearned paid time off, such as vacation or sick pay. It is imperative to ensure that in the event you owe your employer upon termination that this information is included in your severance agreement, including the amount to be paid back and the date by which it must be paid.

Employee Benefits

Severance agreements should fully explain what employee benefits will continue, including healthcare and COBRA options.


Most severance agreements will cover things, such as the employer’s policies, with disparagement and providing references. However, by hiring an employment attorney to review your severance agreement, you can negotiate how your references will be handled in the future, as well as what information will be shared with potential employers.

The employment attorneys at Maduff & Maduff are here to protect your rights, contact us to ensure you are receiving what is rightfully yours upon separation from employment.