Think That Severance Is Safe? It Might Be Silencing You.

A severance agreement can feel like a resolution, but it can also raise red flags. Especially when you're handed legal language you didn’t draft and told to sign on the spot.

In New York, it's not uncommon for companies to include clauses that limit what former employees can say. Some even attempt to shut down future reporting altogether. These agreements are often written by legal teams with the employer’s interests front and center, but that doesn’t mean you’re powerless.

Our business transaction lawyers at Horn Wright, LLP, work with professionals who’ve been pressured to sign away their voice. If you’ve been given a document that doesn’t sit right with you, it’s worth taking a closer look before you commit to silence.

What Hides Inside Severance Agreements Matters More Than You Think

These agreements can carry real consequences, especially when they’re loaded with language that crosses ethical or legal lines.

Some common examples to review carefully:

Confidentiality Clauses That Reach Too Far

You might expect a confidentiality clause to cover internal projects or client data. But in some agreements, they’re written so broadly they could discourage you from speaking with regulators. The Securities and Exchange Commission (SEC) has flagged this issue in enforcement actions.

Non-Disparagement Provisions That Prevent Honesty

These clauses sometimes attempt to bar any negative statements, even if they involve illegal conduct. The National Labor Relations Board (NLRB) has taken action against overly restrictive terms that infringe on protected speech.

Language That Implies You’re Waiving Legal Protections

Some agreements quietly suggest that by signing, you’re forfeiting the right to file complaints. That implication is both misleading and unenforceable. Federal guidance affirms your rights, no matter what your contract says.

If you’ve worked with commercial contract attorneys in New York, you already know. Every word has weight. And when those words are aimed at keeping you quiet, they deserve scrutiny.

Recognize the Signs of Employer Retaliation

When employers worry that you might speak out, they often shift to damage control. That’s when subtle tactics become clear warning signs.

Here’s what to look out for:

• Forced Acknowledgments of “No Wrongdoing.” You may be asked to sign a statement claiming you’re not aware of any issues. That’s not just a checkbox. It’s a method to protect the company from future claims. If you’re aware of misconduct, don’t let this language erase your ability to come forward later.
• Threats That Tie Payment to Silence. Any clause that suggests your severance will be withheld if you report misconduct should be carefully examined. These provisions are often worded vaguely, which makes them feel legally binding when they may not be at all.
• Approval Requirements for Contacting Authorities. If you’re being told to notify your former employer before speaking to a government agency, that’s a red flag. Federal protections are clear: no one can restrict your ability to report violations. Watch for terms like “must inform employer prior to disclosure”—they're designed to deter, not to inform.

These types of terms often appear after roles involving business formation legal services, high-level compliance, or internal operations. If you had access to sensitive information, there’s a higher chance you’ll be handed a severance with restrictive conditions.

You’re Protected by State and Federal Law. Here’s What That Means.

You don’t need to be a whistleblower to have rights. But if you are, those rights are firmly backed by the law.

• Federal Safeguards for Employees. Under Sarbanes-Oxley and Dodd-Frank, employees are protected against retaliation when they report financial fraud or regulatory violations. A recent Supreme Court ruling makes it easier to prove retaliation happened even if it wasn’t intentional.
• Section 740 of the New York Labor Law This statute protects employees who disclose violations that threaten public health or safety. If your employer takes adverse action against you for raising concerns, they may be held accountable under state law.

Even professionals working with mergers and acquisitions lawyers or corporate boards aren’t immune to pressure. If you’re aware of internal wrongdoing, it’s worth reviewing your options before you sign anything.

Want to Report Misconduct? Do It Safely and Strategically

You can take a stand without putting your livelihood on the line. Here’s how:

1. Go Through the Agreement in Detail

 Scan every section for language that limits your ability to speak freely. This includes terms about “cooperation,” “non-disparagement,” or “confidentiality.”

If you're unsure about the meaning of a clause, highlight it and bring it to a legal professional for a second opinion before signing.

1. Work with an Attorney Who Handles Employment Law

Not all severance clauses are enforceable but that’s not always obvious. An experienced lawyer can give you a straightforward assessment.

Ideally, find someone familiar with whistleblower protections so you’re getting advice tailored to your specific risk and rights.

1. Choose the Right Agency to Report To

Different types of violations belong with different agencies. The Securities and Exchange Commission (SEC), Occupational Safety and Health Administration (OSHA), and Equal Employment Opportunity Commission (EEOC) all have their own domains. 

Use the correct path so your report reaches the people who can act. Submitting your complaint through the agency’s official online portal can help ensure it’s logged and tracked properly.

1. Keep a Thorough Record of Your Experience

Save communications, agreements, emails - anything that outlines the situation or backs up your claims. Organized documentation can make a real difference.

Also keep notes of verbal conversations, including dates, times, who was present, and what was said. These can support your account later.

If you’ve worked in compliance or corporate governance legal advice in New York, you already understand the importance of precision. This is where it matters most.

Signing a Severance Doesn’t Cancel Your Legal Protections

Just because you signed a document doesn’t mean every term holds up in court.

• Unlawful Clauses Can Be Challenged. New York courts don’t uphold terms that contradict state or federal law. If the agreement tries to limit your protected rights, it’s vulnerable to review.
• You Have the Right to Report. No Permission Needed. Employers can’t prevent or delay your communication with federal or state agencies. If they’ve suggested otherwise, you’re not obligated to comply.
• You May Be Eligible for Compensation If You’ve Been Targeted. Retaliation carries legal consequences. If you lost your job or benefits for speaking out, you may have grounds to recover damages.

If any of this started while negotiating business sale and purchase agreements, or you were part of internal discussions involving risk, don’t assume you’re bound to silence.

Horn Wright, LLP, Helps Professionals Protect Their Voice

You don’t need to go along with a severance agreement that compromises your rights. At Horn Wright, LLP, our business transaction lawyers helped professionals from across New York stand up to restrictive contracts and retaliation tactics. 

Whether you’re facing pressure after leaving a high-level position or dealing with a complex agreement, one of the country’s top law firms is ready to provide real answers and a path forward. 

Contact our office today to schedule your complimentary case review.