Receiving a severance agreement can be disorienting. One moment you are trying to process what just happened at work, and the next you are being asked to sign a legal document that may affect your finances, your reputation, and your future job options. Many people also feel pressure to sign quickly, especially when severance pay is tied to a deadline.
If you were offered a severance agreement in New Jersey, we want you to know something important: the language in that agreement often matters more than the headline number. Severance terms are sometimes negotiable, depending on the employer’s policies and the circumstances of your separation, and a careful review can help you avoid giving up rights you did not realize you had. Every situation is different, so the right approach depends on the wording of your agreement and the facts leading up to your separation.
If you are unsure what the agreement really means or what you may be waiving, call Zazzali, P.C. or reach out through our online contact form to request a consultation. We can help you understand what the employer is asking for, what you may be able to negotiate, and what your options look like before you sign.
Why a Severance Agreement Deserves Careful Review
A severance agreement is not just a polite exit. It is a contract, and it is often drafted with the employer’s interests in mind. In exchange for severance pay or benefits, the agreement may ask you to release legal claims, accept confidentiality obligations, limit what you can say, and restrict where you can work next.
In New Jersey, severance agreements can intersect with workplace protections, including claims involving workplace discrimination, retaliation, harassment, and other violations. Under New Jersey’s Law Against Discrimination, certain non-disclosure provisions in employment contracts and settlement agreements may be unenforceable if they have the purpose or effect of concealing details relating to those claims. This does not mean every confidentiality term is invalid, but it does mean the wording matters, especially when workplace misconduct is involved.
A review is not about creating conflict. It is about clarity. When you understand the contract, you can make an informed choice that supports your next step.
Three Practical Steps to Take Before You Start Marking Up Clauses
Before you dig into legal terms, take a breath and do three things that protect you immediately. These steps help you slow the process down and keep the details straight while you decide what to do next.
- Do not sign on the spot: If someone is pushing you to sign immediately, that pressure is information that’s worth paying attention to.
- Save a clean copy of the agreement and every message that came with it: Deadlines, threats to withdraw the offer, or promises made verbally can all matter later.
- Write down a short timeline of what led to the severance offer: Include performance reviews, complaints you raised, changes in treatment, and who said what during the termination meeting, since those details can help you spot whether the agreement may be trying to shut down potential claims.
Once you do that, you can move on to the nine clauses that most often determine what you are really agreeing to when you sign. If you would like help reviewing the language or understanding what you may be giving up, the employment and labor law attorneys at Zazzali, P.C. are ready to help you take the next step forward.
Clause 1: Release of Claims and Waiver Language
In the first clause, the goal is to understand what rights you are being asked to give up. A release of claims typically says you agree not to sue the employer, and it may cover a wide range of legal claims, including claims you have not filed yet.
Review whether the release is narrow or sweeping. Some releases cover only certain claims tied to your employment. Others try to cover “any and all” claims under federal, state, and local law, including claims against individuals, not just the company.
Key points to check include the scope, the timeframe covered, and who is being released. It can also help to check whether the release includes claims that are not obvious on first read, such as wage and hour issues, unpaid commissions, reimbursement disputes, or retaliation tied to complaints you made.
- Scope of claims: Which types of claims you are giving up, and whether the clause uses broad “any and all” language
- Who is released: Whether it covers only the company or also managers, supervisors, owners, and related entities
- Time period: Whether it covers claims up to the date you sign (typical) or uses unusually broad language
- Unknown claims: Whether you are waiving unknown claims based on events that have already happened
A release is often the employer’s main goal. If there is any chance your separation involved discrimination, retaliation, harassment, or wage issues, it may be worth understanding the release before you decide whether the severance amount is truly fair.
Clause 2: Time to Consider and Any Revocation Rights
In the second clause, timing matters because deadlines can affect whether you feel forced to sign without understanding what you are giving up. Many people assume there is always a mandatory review period for severance agreements. In reality, the most well-known mandatory timing rules apply in specific circumstances, especially when an employer seeks a waiver of age discrimination claims for employees age 40 and older.
If you are age 40 or older and the agreement asks you to waive federal age discrimination claims, the Older Workers Benefit Protection Act requires specific disclosures and minimum time periods.
These timing rules apply when the employer is seeking a waiver of rights under the federal Age Discrimination in Employment Act (ADEA), and OWBPA also requires other specific waiver language and disclosures.
In many situations, this includes a minimum period to consider the agreement and a 7-day revocation period after signing, and group exit programs may involve a longer consideration period.
In general, when OWBPA applies, employees must receive at least 21 days to consider the agreement (45 days in certain group termination programs) and a 7-day revocation period after signing.
Even if those exact rules do not apply to you, the practical lesson still does: time is a negotiating point. You can ask for more time, and you should understand whether the agreement claims to become binding immediately or only after any revocation window closes.
After you identify the timing terms, pause and assess whether the deadline is reasonable based on what the agreement is asking you to waive.
Clause 3: Severance Pay Details and Payment Conditions
In the third clause, focus on how the money is actually delivered and what could jeopardize it. The severance number is only the start. You should confirm how it is paid, when it is paid, and what conditions could allow the employer to withhold or stop payment.
Some agreements pay a lump sum. Others pay in installments. Installments can create risk because the employer may try to stop payments if it claims you violated a clause later.
- Payment structure: Whether the severance is a lump sum or paid over time
- Payment timing: When the payment is due, and whether there are clear dates
- Withholding and deductions: Whether taxes are withheld and whether any deductions are listed
- Payment triggers: Whether the employer can stop or reclaim severance based on alleged noncompliance
If the agreement is vague on timing or conditions, that is a problem you can often fix through negotiation. Clear payment language reduces the chance of future disputes.
Clause 4: Benefits, Health Coverage, PTO, and Other Money Still Owed
In the fourth clause, look beyond severance pay to the other financial pieces that can affect your stability. Severance agreements often address more than severance pay. They may also cover benefits, reimbursement, bonuses, commissions, and paid time off.
Employers often provide COBRA information when employment ends, and some severance packages include partial payment of COBRA premiums for a set period. If the agreement includes COBRA terms, confirm exactly what the employer is paying and for how long.
Also, review whether you are owed additional compensation that is not truly “severance,” such as earned commissions or expense reimbursements. If the agreement tries to roll those amounts into the severance number, that is worth flagging.
- Health coverage: Whether COBRA is offered, and whether the employer pays any portion of premiums
- Paid time off: Whether unused PTO is paid out, and whether the amount is specified
- Bonuses and commissions: Whether earned amounts are addressed clearly and paid separately from severance
- Reimbursements: Whether business expenses are paid and whether a deadline is set
Even when severance looks generous, benefits and unpaid compensation can be where employees lose meaningful value. A careful review helps you spot what should be clarified or added.
Clause 5: Confidentiality and Non-Disclosure Terms
In the fifth clause, the question is what you are being required to keep private and how broadly the restriction is written. Confidentiality clauses can range from reasonable to overbroad. Some are limited to trade secrets and proprietary company information. Others attempt to prevent you from discussing the circumstances of your separation, the existence of the agreement, or the workplace events that led to it.
New Jersey law limits certain “non-disclosure” provisions in employment contracts or settlement agreements when they have the purpose or effect of concealing details relating to unlawful workplace conduct or protected claims. This does not mean confidentiality provisions are invalid across the board. Employers may still protect trade secrets and certain proprietary information, but broad “silencing” language should be reviewed carefully, especially where workplace misconduct is alleged.
Additional note for many private-sector employees: For many non-supervisory private-sector employees, overly broad confidentiality or non-disparagement language may raise issues under the NLRA, especially if it could chill discussing wages or workplace conditions.
That also does not mean every confidentiality clause is enforceable as written. It means you should read carefully, especially if you believe unlawful conduct occurred, and you should not assume the clause is “standard” or harmless.
- What is confidential: Whether the clause is limited to business information or expands to your separation and the agreement itself
- Who you may tell: Whether you can speak with your spouse, therapist, tax adviser, or legal counsel
- Reporting rights: Whether the clause recognizes your ability to cooperate with government agencies
- Penalty language: Whether the employer claims a right to seek damages if it alleges a breach
After reviewing confidentiality terms, consider how the restrictions would affect your real life. If the language is so broad that it chills normal communication, that is often a sign the clause needs narrowing.
Clause 6: Non-Disparagement Language and One-Sided Restrictions
In the sixth clause, look closely at what the agreement says about your speech after you leave. Non-disparagement clauses try to limit what you can say about the employer. The problem is that some clauses are written so broadly that they can be used to intimidate employees, even when the employee is telling the truth or simply describing their experience.
In New Jersey, the Supreme Court has held that non-disparagement provisions are unenforceable when they function to conceal details of discrimination, retaliation, or harassment claims, even if they are not labeled as confidentiality clauses. Whether a particular clause crosses that line is fact-specific, so the exact wording and context matter.
- Mutuality: Whether the employer also agrees not to disparage you
- Definition: How disparagement is defined and whether it is overly broad
- Practical impact: Whether it interferes with job references, networking, or truthful statements
- Enforcement terms: What remedy the employer can claim if it alleges a violation
If you are concerned about how the clause could be used against you, that is often a strong reason to have the agreement reviewed before signing.
Clause 7: Non-Compete and Non-Solicitation Restrictions
In the seventh clause, focus on whether the agreement restricts your next job or your ability to keep professional relationships. Some severance agreements introduce or expand restrictive covenants, even if you never signed one before. Non-compete clauses can restrict where you work. Non-solicitation clauses can restrict who you contact, including clients, customers, vendors, or even coworkers.
In New Jersey, restrictive covenants are evaluated for reasonableness, and enforceability often depends on how narrowly the restriction is written and what interest the employer claims it is protecting. That is why you should review the scope carefully, since a clause that sounds ordinary may be drafted so broadly that it effectively blocks you from your industry.
- Duration: How long the restriction lasts
- Geography: Where you are restricted from working, if geography is included
- Competitive definition: How the agreement defines a competitor or competitive work
- Restricted relationships: Who you are barred from contacting, including clients and coworkers
If the restriction feels broader than necessary, it may be negotiable. New Jersey courts generally look at whether the restriction protects a legitimate business interest, is no broader than necessary, and does not impose undue hardship. It is better to address it now than to discover the impact when you are interviewing for a new role.
Clause 8: References, Employment Verification, and Public Statements
In the eighth clause, consider how the agreement affects your transition to a new job. When you are moving on, what the employer says about you can matter almost as much as what you say about the employer. Some severance agreements include a neutral reference clause that limits verification to dates of employment and job title. Others are silent, which leaves you exposed to inconsistent messaging.
If your departure was tense or abrupt, reference language can be a practical safeguard. A written neutral reference provision can reduce uncertainty during your job search.
- Neutral reference: Whether verification is limited to title and dates, and whether that is stated clearly
- Point of contact: Whether a specific person or department is designated to respond to inquiries
- Public messaging: Whether the agreement controls what either side may say externally
- Consistency: Whether the agreement prevents informal negative commentary by leadership
After you review this clause, think about your industry and how hiring happens. If references and informal reputation matter, this section is worth strengthening.
Clause 9: Post-Employment Obligations, Including No-Rehire and Cooperation Terms
In the ninth clause, review what the agreement requires after your employment ends. Many severance agreements include obligations that can linger for months or years. These can include a no-rehire provision, return of property requirements, confidentiality reminders, and cooperation demands for internal investigations or litigation.
No-rehire clauses can be broader than they sound, particularly when a company has affiliates or related entities. Cooperation clauses can also become burdensome if they are not limited in time and scope.
- No rehire: Whether you are barred from applying again, and whether related entities are included
- Return of property: What must be returned, how quickly, and whether there is a certification requirement
- Cooperation: Whether future cooperation is required, and whether time is compensated
- Ongoing duties: Whether obligations continue indefinitely or have clear limits
A fair agreement should not create open-ended responsibilities that interfere with your ability to move forward. If the employer wants ongoing cooperation, it is reasonable to seek clear limits and fair terms.
What Negotiation Can Look Like in Real Life
Severance negotiation does not have to be confrontational. Often, it is about narrowing overbroad language, clarifying payment terms, and aligning restrictions with what is actually reasonable. When there is potential legal exposure, negotiation can also involve improving compensation and adjusting the release terms.
Common improvements we may pursue include increased severance pay, better benefits support, mutual non-disparagement, clearer reference language, narrower confidentiality provisions, and more workable restrictive covenant terms. The right approach depends on your goals and the facts of your situation.
Even if you ultimately decide to sign, signing from a position of understanding is very different from signing under pressure.
What to Gather Before You Sign a Severance Agreement in NJ
Before you sign, it can help to gather a few documents in one place, including the severance agreement, your offer letter or employment contract, any non-compete or confidentiality agreement you previously signed, recent performance reviews, and any written complaints or HR communications that relate to the issues you raised. Having those materials ready allows a faster, clearer review of what you are being asked to give up and what can realistically be negotiated.
Contact Zazzali, P.C. Today for a Consultation About Your Severance Agreement
If you have been offered a severance agreement in New Jersey, it may be worth speaking with counsel before you sign. These agreements often contain release language and restrictive terms that can affect your legal rights, your career options, and your financial security. We can review the document with you, explain what each clause means in plain language, and help you decide whether negotiation makes sense based on your circumstances.
To speak with our team, call Zazzali, P.C. or contact us through our online contact form to schedule a consultation. We are ready to listen, help you understand your options, and support you in moving forward with clarity and confidence.
Disclaimer: The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. Outcomes depend on the facts, your employer’s policies, and the language in the agreement. If you are seeking legal advice, please contact our law firm directly