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Severance Agreements

Our practice at Reilly Legal includes drafting, reviewing, and negotiating severance agreements for employees and executives. I have compiled some helpful tips here. 

This shouldn't be construed as legal advice, and I suggest you reach out to me or another attorney if you have specific needs or questions.

Severance Agreement

A severance agreement is a legal contract between an employer and an employee that outlines the terms and conditions of the employee's departure from the company. Severance agreements are usually offered to employees who have been terminated from their jobs, but they can also be offered to employees who have resigned or who are being laid off.

The key components of a severance agreement typically include:

  1. Severance pay: This is the amount of money that the employer agrees to pay the employee upon termination of their employment. The amount of severance pay can vary depending on a number of factors, including the employee's length of service with the company and the reason for the termination.

  2. Release of claims: In exchange for the severance pay, the employee is usually required to sign a release of claims against the employer. This means that the employee agrees not to sue the employer or file any other legal claims related to their employment, including claims of discrimination or wrongful termination.

  3. Confidentiality: The severance agreement may also include a confidentiality clause, which prohibits the employee from disclosing any confidential information about the company or their employment, including trade secrets or proprietary information.

  4. Non-disparagement: A non-disparagement clause is often included in a severance agreement, which prohibits the employee from making any negative statements about the company or its employees.

  5. Other terms: Depending on the specific circumstances of the termination, a severance agreement may include other terms, such as a non-compete clause or an agreement to provide a reference.

It is important to note that employees are not obligated to sign a severance agreement, and they have the right to consult with our severance agreement attorney in Barrington, Rhode Island before signing.


In some cases, an employer may offer a severance package as an incentive for the employee to sign the agreement quickly, but employees should take the time to review the terms carefully to ensure that they are in their best interests.


Negotiating a severance package can be a complex process, and it is important to approach it with a clear understanding of your rights and your employer's obligations.


Here are some general steps that may be involved in negotiating a severance package:

  1. Understand your rights: Before negotiating, it's important to understand your rights under your employment contract, any applicable laws and regulations, and your employer's severance policies.

  2. Review your situation: Assess your current situation, including your reasons for wanting to leave the company, your financial needs, and your goals for the future.

  3. Prepare a proposal: Based on your assessment, prepare a proposal that outlines the terms of the severance package you are seeking, including the length of the severance period, the amount of the severance payment, and any other benefits or compensation you are seeking.

  4. Communicate your proposal: Communicate your proposal to your employer in writing and be prepared to discuss it in a face-to-face meeting.

  5. Negotiate: Be prepared to negotiate the terms of the severance package, and be willing to compromise on certain points.

  6. Seek legal advice: If necessary, seek legal advice to understand your rights and to ensure that the severance package is legally binding and enforceable.

  7. Review and sign: Review the final terms of the severance package carefully and make sure you understand them before signing.

It's important to keep in mind that severance packages are subject to state and federal laws and regulations, and that some employees may be eligible to some unemployment benefits. Therefore, it's always recommended to consult with legal and financial professionals before signing any agreements.

Some Helpful Tips

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