What to Know Before Signing a Severance Agreement in New York

Losing your job can be stressful, even when you see it coming. If your employer offers you a severance agreement, you may be tempted to sign it and move on. Before you do, however, take time to understand what you’re agreeing to and whether the terms are fair.

A severance agreement can affect your finances and your ability to take legal action against your former employer. Here’s what New York employees should know before signing one.

What Is a Severance Agreement?

A severance agreement is a contract. It outlines the terms of your departure from your job and might include issues related to:

• Pay
• Benefits
• Other conditions your employer expects you to accept in exchange for the offered compensation

In some cases, agreements include a release of claims. This means that if and when you sign, you may give up your right to sue your employer over certain issues. This can include things that often lead to lawsuits, such as discrimination or unpaid wages.

New York employers generally do not have to offer severance pay unless an employment contract, company policy, or other applicable agreement requires it. When an offer is on the table, it’s important to understand what you’re receiving and what rights you may be giving up in return.

What Should You Review Before Signing?

Start by looking at the amount of severance pay and when you can expect to receive it. Compare the offer with your salary, length of employment, benefits, and any promises your employer previously made.

Pay close attention to the release of claims and any confidentiality, nondisparagement, or other restrictive provisions. These terms may affect what you can say about your former employer or what legal options remain available to you.

New York General Obligations Law 5-336 also limits confidentiality provisions in agreements resolving claims involving discrimination, harassment, or retaliation. Generally, an employer cannot require confidentiality about the underlying facts of such a claim unless confidentiality is the employee’s preference and the statutory requirements are followed.

If you are concerned that your termination involved discrimination, retaliation, or unpaid wages, consider speaking with an employment attorney before signing. Accepting compensation in exchange for releasing claims may have significant consequences.

Frequently Asked Questions

Can I negotiate a severance agreement in New York?

Yes. Depending on the circumstances, you may be able to negotiate additional compensation, benefits, the wording of a release, or other terms. You do not have to assume the first offer is final.

Do I have to sign a severance agreement?

Generally, no. However, declining an offer may mean giving up the compensation offered in exchange for signing. Review the agreement carefully so you can weigh the financial benefits against the rights you may be surrendering.

What if I already signed and now regret it?

Your options depend on the agreement’s terms and the circumstances surrounding your signature. Some agreements may be challenged under specific circumstances, but regretting the decision alone does not necessarily make an agreement invalid. An attorney can review the document and explain whether you may have grounds to challenge it.

Get Legal Advice Before You Decide

A severance agreement may offer helpful financial support during a career transition, but signing without understanding its terms can create problems later. Whether you’re reviewing an offer or second-guessing an agreement you’ve already signed, an employment attorney can help you understand your rights and options.

Borrelli & Associates, P.L.L.C. can review your situation and help you determine the next steps. Contact us to discuss your concerns before making a decision that could affect your future.