How to Negotiate a Severance Package That Actually Works for You

Losing your job is personal. It affects your income, your future, and your sense of stability. Whether the news was expected or not, it still leaves you with questions - some you weren’t prepared to answer right away.

One of the first things your employer might hand you is a severance agreement. And while it may look official, you don’t have to accept it as-is. You have options. You have negotiating power.

Our business transaction lawyers at Horn Wright, LLP, have helped people across New York handle this exact situation. From Wall Street to SoHo, our team understands how to review these agreements and fight for better terms. The goal? To make sure what you're offered reflects what you've contributed and sets you up for what comes next.

When Should You Start Negotiating Severance?

Timing can shape how successful your negotiation will be. Acting too soon might limit your leverage. Waiting too long can make your employer less flexible. Getting the moment right gives you the space to ask for more and get it.

• As soon as you receive your severance agreement, but only after reading it carefully. You don’t need to respond right away, no matter how quickly they want an answer. Take time to understand what’s being offered and what’s missing. Employers often expect a brief negotiation, even if they don’t say so outright.
• During your exit interview or HR follow-up, especially if no one has addressed specific terms. These meetings can feel procedural, but they’re also opportunities to ask for clarity or express concerns. Bring up any parts of the agreement that feel vague, one-sided, or incomplete. You’re not just signing paperwork. You’re protecting your future.
• If you know layoffs are coming, get a head start before the process even begins. Quietly collect performance reviews, client feedback, or internal success metrics. These materials will be your proof when it's time to show why you’ve earned a stronger package. Preparation can help you stay calm and confident when the conversation becomes real.

How to Secure a Better Severance Package

Negotiating doesn’t mean being confrontational. It means knowing what to ask for and presenting your case clearly. Here’s how to approach it:

1. Reference your time and contributions.

Employers often calculate severance using tenure-based formulas, typically one or two weeks of pay per year of service. If your offer falls short of that, or if you’ve made significant contributions to growth or revenue, mention it. It shows you’ve earned more than the baseline.

2. Highlight specific accomplishments.

Whether you improved processes, secured clients, or exceeded performance metrics, now is the time to point that out. Be concise but provide real numbers or examples when you can. This adds credibility to your request and reinforces your value to the company.

3. Use peer benchmarks.

Look at what similar roles in your industry receive. It’s fair to ask for alignment with standard severance practices if your package is below market expectations. Having even one or two comparison points can shift the conversation in your favor.

4. Be candid about your transition.

You can emphasize how an additional month of severance would give you time to make a smoother, more stable move into your next role. Framing your ask around a reasonable need often gets better results. Employers may be more flexible when they understand the personal impact.

5. Keep the tone constructive.

Focus on mutual respect and fairness. Most companies want to avoid conflict and maintain their reputation, especially in tightly connected industries. A cooperative tone often leads to better terms.

Key Severance Terms You Should Always Review

Severance pay is only part of the story. The fine print often contains clauses that can limit your options or affect your next job. That’s why it’s important to review every section of the agreement, not just the payout. These are the most important terms you should focus on before signing anything.

• Final pay and unpaid bonuses Always check if your final paycheck includes any accrued but unused vacation or paid time off. If you earned a performance-based bonus or commission prior to your termination, you may be entitled to at least a partial payout. Some employers leave this out unless you ask directly. Don’t assume they’ll bring it up. Put it on the table yourself.
• Non-compete clauses. These provisions can prevent you from working for a competitor or starting your own venture in the same field. Some non-competes are so broad they effectively sideline you for months or longer. If it limits your earning potential or doesn’t reflect the type of role you held, push back. Courts in New York are selective about enforcing them, especially if the restrictions are excessive.
• Confidentiality and non-disparagement clauses. These terms often prohibit you from speaking publicly about the company or sharing any internal documents or experiences. That’s typical, but you want to be sure the company agrees to the same. Ask for mutual language, so they also can’t disparage you or share your departure details with others. Protecting your professional reputation should go both ways.
• Consolidated Omnibus Reconciliation Act of 1986 (COBRA) and health insurance coverage. You’re likely eligible to continue health coverage for up to 18 months, but you’ll pay the full cost out of pocket. That amount can be surprisingly high, especially for family coverage. Some companies will agree to cover a portion of those premiums for a few months. If your role included health benefits, it's fair to ask that they help carry you through your transition.
• Stock, equity, and retirement. If you’re close to a vesting date for stock options, 401(k) contributions, or deferred compensation, bring it up during the negotiation. Sometimes employers are willing to accelerate vesting as part of a separation agreement. This is especially true if you’ve been involved in high-level work or long-term projects. Don’t leave equity on the table just because you’re leaving the job.
• Job transition support. Some employers offer career coaching, résumé assistance, or job placement services. If these aren’t mentioned in your agreement, you can ask for a budget or reimbursement to cover them on your own. Not all support needs to be financial - access to a professional network or alumni program can be equally helpful. Anything that makes your next move easier is worth discussing.

If your departure involves broader business activity, our team may work in parallel with mergers and acquisitions lawyers in New York to ensure your agreement lines up with company-wide decisions or equity events.

What to Avoid During Severance Negotiations

Missteps during severance talks can cost you not only financially, but also in terms of future opportunity. Here are five things to steer clear of:

1. Signing too quickly

Even if your employer gives you a deadline, you're legally allowed time to review. If you’re over 40, federal law gives you 21 days to consider the offer and 7 days to revoke after signing. Take that time. Rushing into a bad agreement can lead to regrets later.

2. Skipping legal review

What looks “standard” on the surface may include clauses that limit your options. It’s always smart to have a local employment law attorney review the agreement before you sign. They can catch vague language, missing protections, or unfair conditions.

3. Focusing only on money

Financial terms matter, but other clauses , like non-solicitation or cooperation obligations, can impact your professional freedom. Look at the agreement as a whole. A strong severance is about the complete picture, not just a number on a check.

4. Letting emotions take over

Stay focused. Expressing frustration might feel justified, but a clear and calm conversation usually leads to better outcomes. Being professional, no matter how frustrated you feel, keeps the door open for better terms.

5. Accepting vague language

Phrases like “reasonable effort” or “ongoing cooperation” should be clarified. Otherwise, you could be on the hook for undefined responsibilities long after you’ve left. Ask for specific timeframes and expectations and get everything in writing.

Our New York Severance Lawyers Can Support You Through It

Our business attorneys at Horn Wright, LLP, represent professionals across New York City - from those leaving leadership roles at major firms to those exiting rapidly growing startups. 

We collaborate closely with our commercial contract attorneys and corporate governance legal advice  teams to make sure your severance terms reflect your position, your contributions, and your future goals.

If your departure is tied to a broader transaction or leadership change, we can coordinate with business sale and purchase agreements professionals to close out all the moving parts. That’s part of what sets us apart - and why we’ve been named among the country's leading law firms.

You're stepping into a new chapter. We'll help you make sure it's on your terms. Contact our office today to schedule your FREE, no-obligation initial consultation.