New York Severance Agreement Attorneys

Here's What You Need to Know About Severance Agreements

Losing your job is stressful enough. Then your employer hands you a multi-page document full of legal language and tells you it's a “standard severance agreement.” You're expected to sign and move on. But this isn't just routine paperwork. It’s a binding contract that can affect your income, benefits, and legal rights for years to come.

So, what exactly is a severance agreement? It’s a contract offered by your employer at the end of your job. In exchange for severance pay or extended benefits, you agree to certain conditions that often including a promise not to sue, talk about company matters, or compete with the company after you leave.

You’ll usually see these agreements pop up in situations like:

• Mass layoffs or downsizing.
• Role elimination due to restructuring.
• Terminations tied to performance or internal shifts.
• Early retirement or mutual separation plans.

Employers aren’t offering these out of kindness. Severance agreements protect them by limiting your ability to take legal action or share sensitive information. That’s why every word matters.

Before you sign anything, speak with an attorney. At Horn Wright, LLP, our business transaction lawyers help employees across New York understand what they’re agreeing to. We break down complicated legal language into real, understandable advice, and as one of the best law firms in America we fight to get you the best possible outcome.

What’s Really Hiding Inside Your Severance Agreement?

Severance agreements aren’t just about walking away with a paycheck. They’re loaded with clauses, some obvious, some buried, that can impact your career, your finances, and even your ability to speak freely. While it might look like a simple offer of money and benefits, what’s really hiding inside that agreement is a series of legally binding promises.

These documents are written by your employer’s lawyers, not yours. That means they’re built to protect the company first. Your job is to make sure your own interests are just as secure. Let’s break down the key parts of a severance agreement so you can spot what matters most and know where to push back.

Severance Pay

This is usually the headline item in a severance package, and often the first thing people focus on. The amount can vary widely. Some companies follow a set formula, such as one or two weeks of pay for every year of service. Others base it on seniority, job title, or whether the termination was voluntary or not. And yes, sometimes it’s completely arbitrary.

Here’s where you want to be especially alert. If the amount feels low, it probably is. If it seems generous, check what you're being asked to give up in return. Severance pay is almost always tied to a waiver of rights. That paycheck comes with strings attached.

Employers usually offer severance in one of two formats:

• Lump sum: A one-time payment, often appealing because you get everything upfront, but it could impact your taxes all at once.
• Installments: Spread out over time. This can offer temporary stability but might be tied to ongoing conditions, like your silence or continued compliance.

The structure matters. It affects taxes, unemployment benefits, and even your ability to take new work. That’s why we always recommend a legal review before you agree to how, when, and under what terms you get paid.

Continuation of Benefits

It’s easy to get caught up in the severance pay, but don’t overlook your benefits. Health insurance, retirement contributions, and other perks might suddenly shift (or disappear) once your job ends.

Thanks to COBRA, many employees have the right to continue their existing health insurance coverage for a limited time. But here’s the catch: you’ll usually have to cover the entire premium yourself. That includes both your share and what your employer used to cover. In New York, that can mean hundreds, even thousands, of dollars a month.

Your retirement savings could also be impacted. If you have a 401(k) or pension plan, you may need to decide quickly whether to roll the funds over, cash them out, or leave them where they are, as each option comes with tax and legal implications.

And don’t forget about life insurance, stock options, or tuition reimbursement programs. Employers rarely spell these out clearly in a severance agreement, so it’s up to you (or your lawyer) to ask the right questions and make sure you’re not leaving money or coverage on the table.

Non-Compete Clauses

Non-compete clauses are some of the most restrictive, and most overlooked, parts of a severance agreement. These terms are designed to prevent you from working for a competitor, starting your own business, or even taking on freelance work in the same industry. That could mean months of being legally barred from earning a living in your field.

In New York, courts don’t enforce non-competes blindly. They weigh several factors:

• Duration: How long are you restricted—30 days, six months, a year?
• Geographic scope: Are you banned from working just in NYC, all of New York, or nationwide?
• Scope of work: Are you prevented from taking any job in your field, or just specific roles?

Here’s the truth: many of these clauses are broader than they need to be. And that makes them open to challenge or negotiation. You might be able to shorten the time frame, narrow the location, or even eliminate the clause altogether.

Don’t assume the language is set in stone. And definitely don’t agree to restrictions you don’t fully understand. The impact on your future job opportunities could be huge.

Non-Disclosure and Confidentiality Agreements

This section is all about keeping quiet. Non-disclosure and confidentiality clauses require you to stay silent about anything the employer considers proprietary or sensitive. That might include internal emails, marketing plans, client lists, pricing structures, or even the terms of the severance agreement itself.

Sounds simple enough, but these clauses can be dangerously vague. Some are written so broadly that they make you second-guess whether you can even talk about your time at the company in a job interview. And if you violate the terms, intentionally or not, you could face serious legal consequences in the form of a breach of contract lawsuit. 

Some employers also try to include indefinite timeframes, meaning you’re bound by silence forever. Others will penalize you financially by revoking severance payments if they believe you've breached confidentiality.

You have the right to ask for clarity or even a rewrite. Don’t assume you’re stuck with silence. If the terms are unclear, overly strict, or too broad, push back. You need to know exactly what you can and can’t say and for how long.

Non-Disparagement Clauses

Think you're free to vent about your former employer once you're out the door? Think again. Non-disparagement clauses are designed to shut that door tight. These terms stop you from saying anything negative about your old company, publicly or privately. In some cases, even vague social media posts can come back to bite you.

Sometimes the clause is mutual such as in potential future dissolution of a business, meaning the company agrees not to badmouth you either in the meantime. But don’t assume that's the case since many agreements only protect the company. If the clause isn’t mutual, you may be left holding your tongue while your employer isn’t bound at all.

Why does this matter? Because violating these terms can have real consequences. You might lose your severance pay or find yourself in legal trouble. Even something as simple as leaving a Glassdoor review could be considered a breach.

Before you sign, find out exactly what you’re agreeing to. Ask if the clause is mutual. Ask how long it lasts. Ask what counts as disparagement. If it feels one-sided, it probably is—and that’s something worth challenging.

Waiver of Claims

This is one of the most important (and most misunderstood) parts of any severance agreement. When you sign, you’re usually agreeing to give up your right to sue your employer for anything that happened during your time there. That could include wrongful termination, unpaid wages, harassment, or retaliation.

It’s called a “general release of claims,” and it’s not something to take lightly. Once signed, it can be incredibly difficult to undo.

But here’s the good news: not every claim can legally be waived. Federal and state laws carve out exceptions. For example, in many cases, you can still bring forward claims related to discrimination, whistleblower protections, or violations of the Family and Medical Leave Act (FMLA). Some rights are yours no matter what the agreement says.

The key is knowing which rights you’re giving up and which ones you’re allowed to keep. That’s where an attorney makes a huge difference. We can help you spot overly broad waivers and demand fairer, clearer terms that don’t leave you boxed in legally for years to come.

The Laws Have Your Back: Here’s How They Work for You

Just because you're out of a job doesn’t mean you’re out of options. Federal and state laws are there to protect employees, especially when it comes to severance agreements. Knowing your legal rights gives you leverage when everything else feels uncertain.

If you’re 40 or older, you have extra legal protection thanks to the Age Discrimination in Employment Act. That law ensures older workers aren’t pushed out unfairly. Then there’s the Older Workers Benefit Protection Act, which sets strict rules for how employers must handle severance for older employees.

Under OWBPA, your employer must:

• Give you at least 21 days to review the severance agreement.
• Offer a 7-day window to revoke your acceptance after signing.
• Clearly explain which rights you’re waiving, i.e., no fine print tricks.

In mass layoffs, those timelines can be even longer (up to 45 days) especially if multiple employees are affected.

New York State law takes things a step further. Under the New York Human Rights Law, you're protected from discrimination based on age, race, religion, gender identity, sexual orientation, and more: even during layoffs. If your severance agreement tries to strip away those rights, it could be invalid. At that point you’ll want to speak with an experienced commercial litigation attorney. 

And if you're part of a group termination, New York employers may be required to disclose:

• Who was let go and who was retained.
• The criteria used for those decisions.
• The age and job title of each affected person (in anonymous form).

Bottom line: you have more legal power than you might think. And understanding those rights can make all the difference when you're negotiating a better deal.

Severance Isn’t Set in Stone: Here’s How to Push Back

That severance agreement you got? It’s not a final offer. It’s a starting point. And if you think employers don’t expect you to push back, you need to think again. Most agreements leave room for negotiation because companies know you might spot issues they’d rather not fight over later.

You don’t have to sign the first version of a severance agreement you receive. And you shouldn’t. The first thing you should do is sit down with an employment compensation attorney to get a top to bottom overview of what your rights are.

Negotiation is your chance to improve the terms. That could mean asking for more money, more time on your health coverage, or less restrictive non-compete language. In fact, many employers hope you’ll just sign and move on. But the truth is, they often leave room for discussion especially if they want to avoid a drawn-out legal situation or bad press.

Here are a few smart negotiation tips:

• Ask for everything in writing.
• Focus on specific goals, e.g., more pay, longer benefits, etc.
• Use calm, professional language when making requests.

Avoid these common mistakes that we see all too often:

• Rushing under pressure: Take the time you're allowed. Ask for more if you need it.
• Skipping the fine print: Every clause matters. Don't skim.
• Assuming nothing can change: Severance agreements are just offers, until you sign them.

Don’t Sign Blind: When You Absolutely Need a Lawyer

Signing a severance agreement without legal guidance is like walking into a high-stakes negotiation blindfolded. The truth is, employers are relying on you not to ask questions, not to consult an attorney, and not to realize how much you could be giving up.

You don’t need to wait until something goes wrong to talk to a lawyer. In fact, the best time to get legal advice is before you sign anything—before you've unknowingly waived key rights or locked yourself into clauses that could hurt your future.

Here’s what a lawyer can do for you:

• Spot unfair terms or vague language before they cost you.
• Identify what rights you’re giving up.
• Push for better terms during negotiations.

Even if the offer looks generous, there could be hidden clauses that sabotage your next opportunity or leave you vulnerable to a lawsuit. A lawyer doesn’t just read the contract—they decode it, flag risks, and protect your future.

The Most Costly Mistakes We See and How You Can Avoid Them

We’ve seen it all before—and we hate seeing people walk away with less than they deserve. When emotions are high and jobs are lost, it’s easy to sign something just to move on. But those few rushed minutes can cost you months—or even years—of financial or professional freedom.

Here are a few of the most avoidable mistakes:

• Accepting the first offer: Many employers expect some back-and-forth.
• Overlooking restrictive covenants: These could block you from future jobs.
• Not understanding tax implications: Severance pay is taxable income and could bump you into a higher bracket.

Also, beware of slippery language. Words like “reasonable,” “appropriate,” or “to the company’s satisfaction” sound harmless, but they’re legal gray areas. These vague terms can leave you vulnerable to one-sided interpretations—almost always in your employer’s favor. Always ask for specifics in plain English, and don’t be afraid to challenge ambiguity.

Quickfire Answers to Your Burning Severance Questions

We hear a lot of the same questions from clients, and they’re all valid. When you’re facing a life change like this, there’s no such thing as a silly question. Here are some of the most common ones we get, answered clearly and directly:

Can I refuse a severance agreement?

Yes, absolutely. You’re under no legal obligation to sign. But keep in mind that refusing means walking away from any benefits tied to it, including pay and continued health coverage. That’s why it’s critical to weigh the pros and cons carefully and speak with a severance employment lawyer first.

Is severance pay taxable?

Yes, it is. Severance counts as regular income, which means it’s subject to both federal and New York state taxes. If you’re getting a lump sum, it could push you into a higher tax bracket. You may want to consult a tax professional to plan ahead.

Can I sue my employer after accepting a severance package?

Usually, no. Once you sign, you’re typically waiving your right to bring legal claims against the company. But there are exceptions. If the agreement was signed under pressure or if your employer violated specific laws (like those protecting against discrimination) you may still have options.

How long do I have to review a severance agreement?

If you're 40 or older, federal law gives you 21 days to consider the agreement and 7 days to revoke it after signing. If you’re under 40, employers can offer shorter timelines, but that doesn’t mean you have to accept them. Always ask for more time if you need it.

Why Horn Wright, LLP, is the Legal Muscle You Want on Your Side

When your job ends, the stakes couldn’t be higher. Your finances, your reputation, and your future opportunities are all on the line. That’s where we come in.

At Horn Wright, LLP, we’ve spent years going toe-to-toe with major employers throughout New York. We know the games companies play, and we know how to beat them. Our attorneys understand not just the law—but the pressure you're under. We've helped executives, mid-level professionals, and entry-level employees walk away with severance packages that actually respect their value.

We don’t just review paperwork. We protect people. Contact our office today for a FREE consultation to learn about your rights.