The release is the engine of a severance agreement: the clause where, in exchange for the payment, you waive "any and all claims, known or unknown, arising out of your employment or its termination." Everything else in the document orbits that trade. Before signing, many people run a specific checklist against the release itself — whether the money is genuinely extra rather than amounts already owed, which claims the release covers and which it legally cannot touch, whether the OWBPA timing rules apply (21 or 45 days to consider, plus 7 to revoke, for workers 40 and older), how far the non-disparagement and confidentiality clauses actually reach, what the employer will say to reference checks, and how COBRA and unvested equity are handled. None of this requires a law degree to spot, though many people still have the final draft professionally reviewed. What each item means for you depends on your situation, and the rules below can change.
Is the payment real consideration?
A release generally needs consideration — something of value you were not already entitled to — so the first question is how much of the offered amount is genuinely new. Final wages and accrued PTO are the usual place people look, because several states generally require those to be paid regardless of any agreement, and an offer that folds them into "severance" may be repackaging money already owed. Earned bonus or commission amounts often sit in the same category, depending on the plan language. Contractual severance under an offer letter, executive plan, or change-of-control agreement can mean the headline number promises little that is new. Vested equity and 401(k) balances are generally yours already, so an agreement that appears to condition them on signing is worth a close look. What each of these means depends on your documents. What people commonly check the offer against:
- Final wages and accrued PTO. Several states generally require these to be paid regardless of any agreement; an offer that bundles them into "severance" may be repackaging money you already had a right to.
- Earned bonus or commissions. Amounts earned under a plan's terms are often owed independently of the release; whether yours are depends on the plan language.
- Contractual severance. An offer letter, executive severance plan, or change-of-control agreement may already promise severance. A release that pays only what the contract promised is trading your claims for little that is new.
- Vested equity and 401(k) balances. These are generally yours already; an agreement that conditions them on signing is worth a close look.
A question many people ask before anything else: what am I receiving that I would not receive anyway? That difference — not the headline number — is what the release is actually buying.
Which claims does the release cover?
The release typically sweeps broadly — discrimination and harassment claims, retaliation, breach of contract, wrongful termination, and most tort claims — usually phrased as "any and all claims, known or unknown, arising out of your employment or its termination." That wording is doing a lot of work: "unknown" is intended to reach claims you have not yet identified, and "arising out of your employment" reaches back across the whole relationship rather than just the ending. Reading the list of statutes the agreement names by title, such as Title VII, the ADEA, the ADA, and state civil rights acts, gives a clearer sense of the intended scope than the general language does. It often helps to sit with one question: might I have a claim on any of these? If the answer is plausibly yes, the release may be worth considerably more than the offer reflects. What that is worth depends on your situation.
Which claims can never be released?
Some rights generally survive any release, no matter how the agreement is worded. Unemployment eligibility is determined by the state rather than by contract, so an agreement generally cannot waive it. Workers' compensation claims typically require agency or board approval to settle and are not released through a standard severance agreement. The EEOC treats the right to file a charge and participate in an investigation as non-waivable — an agreement can generally waive your personal monetary recovery from an EEOC lawsuit, but not the filing itself, and the same principle applies to the NLRB, SEC, and OSHA. ERISA-vested retirement benefits are generally outside the release. Unpaid-wage claims under the FLSA typically require DOL or court approval to release. And a release generally covers only conduct through the signing date, so claims arising afterward are typically not waivable in advance. The rights that generally survive:
- Unemployment benefits. Eligibility is determined by the state, not by contract; an agreement generally cannot waive it.
- Workers' compensation claims. These typically require agency or board approval to settle and cannot be released through a standard severance agreement.
- Filing a charge with the EEOC (or NLRB, SEC, OSHA, or similar agencies). The EEOC treats the right to file a charge and participate in an investigation as non-waivable — an agreement can generally waive your personal monetary recovery from an EEOC lawsuit, but not the filing itself.
- Vested benefits. ERISA-vested retirement benefits are generally outside the release.
- FLSA wage claims. In many circumstances, unpaid-wage claims typically require DOL or court approval to release.
- Future claims. A release generally covers only conduct through the signing date; claims arising after signing are typically not waivable in advance.
Many people look for an explicit carve-out paragraph confirming these. A script people sometimes send when it is missing:
"Please confirm in writing that nothing in this agreement limits my right to file a charge with, or participate in an investigation by, the EEOC, NLRB, SEC, or any other government agency, or waives my rights to unemployment benefits, workers' compensation, or vested benefits."
An agreement that purports to block agency charges is typically unenforceable on that point — but the presence of such language is often treated as a signal to slow down.
What timing rules apply if you are 40 or older?
For workers 40 and older, the EEOC explains that a release of age-discrimination claims under the Older Workers Benefit Protection Act generally has to meet specific timing and notice requirements before it is valid. The core of it is time: at least 21 days to consider an individual agreement, or 45 days where the release is part of a group layoff or exit program, plus 7 days after signing during which the agreement can be revoked in writing. The agreement generally is not effective until that revocation window closes. It also generally has to advise you in writing to consult an attorney, and in a group layoff it generally has to include disclosures listing the job titles and ages of those selected and not selected in the decisional unit. The EEOC treats releases that skip these steps as generally unenforceable as to ADEA claims. What the OWBPA generally requires:
- Give at least 21 days to consider the agreement — or 45 days in a group layoff or exit program
- Give 7 days to revoke after signing, in writing; the agreement is generally not effective until that window closes
- Advise you in writing to consult an attorney before signing
- In a group layoff, include disclosures listing the job titles and ages of those selected and not selected in the decisional unit
The EEOC treats releases that skip these steps as generally unenforceable as to ADEA claims. Many people confirm the dates in writing:
"I received the agreement on [date]. Please confirm that my consideration period runs through [date] and that the offer remains open until then."
Signing early is generally permitted but rarely necessary; the revocation window still runs from the signing date.
How far do the non-disparagement and confidentiality clauses reach?
These clauses often reach further than their labels suggest, which is why they are worth reading closely rather than skimming. Direction is the first thing people check: a one-way clause binds you while leaving the employer free to characterize your departure however it likes, and asking for mutuality is a common request. Scope is the second — broad drafting can sweep in candid statements to future employers, to regulators, or even private conversations, and the NLRB has indicated that clauses which substantially interfere with protected concerted activity may be unenforceable. Subject matter is the third: confidentiality about the severance amount is common and unremarkable, but clauses restricting discussion of the underlying facts are a different matter, and several states generally prohibit provisions that prevent disclosure of harassment or discrimination facts. Carve-outs are the last. What people commonly check:
- Who is bound. One-way clauses bind you but leave the employer free to characterize your departure however it likes. Asking for mutuality is common.
- What counts as disparagement. Broad drafting can sweep in candid statements to future employers, regulators, or even private conversations. The NLRB has indicated that clauses which substantially interfere with protected concerted activity may be unenforceable (McLaren Macomb, 2023).
- What must stay confidential. Confidentiality of the severance amount is common; clauses restricting discussion of underlying facts are a different matter — several states, including California and New York, generally prohibit provisions that prevent disclosure of harassment or discrimination facts.
- Carve-outs. Speaking with a spouse, attorney, tax adviser, and government agencies is a carve-out many people confirm is present.
What should the references clause say?
A references clause is most useful when it names a person, a script, and a record. A vague promise of "neutral references" often means nothing in practice, because it does not say who will answer the call, what they will confirm, or how the departure is recorded internally. The specifics people commonly ask for are the contact point future employers should reach, exactly what that person will confirm — dates of employment, title, and, where wanted, an agreed statement about the departure — and whether the departure will be coded as a layoff rather than a termination in whatever HR system holds the record. The common ask is to get that agreed language into the agreement itself rather than leaving it to a side conversation, since a side conversation generally does not survive a change of staff. What this looks like in practice depends on the employer.
How are COBRA and equity treated?
COBRA and equity are both governed mostly outside the severance agreement, which is why people read them against the underlying documents rather than the summary. Continuation coverage is generally available regardless of the agreement, typically for up to 18 months at your own cost; what the agreement can add is an employer-paid subsidy, which is a common negotiated term. The things worth confirming there are when employer-paid coverage ends and when the election window starts. Equity works similarly: the agreement generally cannot rewrite the equity plan, but it can confirm — or quietly obscure — what happens to unvested grants, how long the post-termination exercise window for options runs, and whether any acceleration applies. Many people check the agreement against the actual grant documents rather than taking the summary at face value. Your plan terms control. How each is commonly handled:
- COBRA. Continuation coverage is generally available regardless of the agreement, typically for up to 18 months at your own cost. What the agreement can add is an employer-paid subsidy — a common negotiated term. Many people check when employer-paid coverage ends and when the COBRA election window starts.
- Equity. The agreement generally cannot rewrite the equity plan, but it can confirm — or obscure — what happens to unvested grants, the post-termination exercise window for options, and any acceleration. Many people check the agreement against the actual grant documents rather than taking the summary at face value.
What should you document?
The records worth keeping are the ones that show what you were offered, when, and what you gave up for it. The full agreement and every draft, each with the date you received it, is the core of that, because the dates are what establish whether the consideration and revocation periods were honored. Your offer letter, equity grant documents, bonus or commission plan, and any severance plan sit alongside it, since those are the documents that determine whether the payment was genuinely new money or amounts you already held. Written confirmation of the consideration and revocation deadlines is worth having separately from the agreement text. Negotiation emails show how the terms moved. And after signing, the final signed copy plus records of each payment received under it close the file. What people commonly keep:
- The full agreement, every draft, and the date you received each
- Your offer letter, equity grant documents, bonus or commission plan, and any severance plan
- Written confirmation of the consideration and revocation deadlines
- All negotiation emails
- The final signed copy and records of each payment received under it
When should you have the release reviewed?
Many people have an employment attorney review the release before signing when the amount is significant, when they are 40 or older, when they suspect a discrimination, retaliation, or whistleblower claim the release would extinguish, when equity or deferred compensation is materially affected, or when the restrictive covenants are broader than their actual role. A flat-fee review is common, and on a release of any size it tends to cost far less than an unnoticed clause can. The review generally happens inside whatever window you were given to consider the offer rather than after signing — that window is the chance to have the release read before it takes effect, and for workers 40 and older the 7 days to revoke after signing is a second one. Whether review changes the outcome depends on your situation — but it reliably changes what you know you are trading.
Official sources
- U.S. Equal Employment Opportunity Commission — Q&A: Understanding Waivers of Discrimination Claims in Employee Severance Agreements
- U.S. Department of Labor — Severance Pay
- U.S. Department of Labor — Continuation of Health Coverage (COBRA)
- National Labor Relations Board — Board Rules that Employers May Not Offer Severance Agreements Requiring Employees to Broadly Waive Labor Law Rights (McLaren Macomb)