How to Read a Severance Agreement in New York Before You Sign It
by Zachary A. WestenhoeferBeing offered a severance agreement can feel like a courtesy. You are losing your job, but at least the employer is offering something on the way out. That framing is comforting, and it is also misleading.
In New York, severance is usually not required by law. When it is offered, it is almost never free. Severance agreements are legal contracts designed to resolve risk for the employer, not gestures of goodwill. That does not make them unfair, but it does mean they should be read carefully and deliberately before you sign.
Start with the money, but do not stop there
Most people flip straight to the severance amount, how many weeks of pay, how it will be paid, and when. That instinct is understandable, but it is only the beginning. You should confirm whether the payment is a lump sum or payroll continuation, whether it is contingent on future conduct, and whether benefits like health insurance are actually being extended or merely referenced.
In New York City, severance agreements sometimes imply continued benefits while quietly shifting the cost of COBRA to the employee. That distinction matters.
The more important question is what the employer is asking for in exchange for that money.
Understand what you are releasing
Nearly every severance agreement includes a release of claims. In plain terms, you are agreeing not to sue the employer for conduct that occurred up to the date you sign. In New York, some claims can be waived, some cannot, and others can only be waived if strict legal requirements are met.
Age discrimination claims under federal law follow their own timing and disclosure rules. Certain wage claims under New York Labor Law are treated differently from contract disputes. A release can look broad and airtight on the page while still being partially unenforceable, or broader than the employee realizes.
Employees often assume that if they did nothing “wrong,” the release does not matter. In practice, releases matter most when problems are unclear, undocumented, or still developing.
Pay attention to non-monetary obligations
This is where severance agreements do the most quiet damage. Confidentiality and non-disparagement clauses are common, but their scope varies widely. Some prohibit only public statements. Others reach private conversations, social media, and even discussions with former coworkers.
In New York City's tight professional circles, that difference is not academic.
Cooperation clauses are another frequent trap. These provisions can require former employees to assist the employer in future litigation, sometimes indefinitely, and often without additional compensation.
Sometimes restrictive covenants appear in severance agreements even if none existed during employment. New York law places limits on non-competes, but that does not stop employers from attempting to impose them at the exit stage.
Deadlines deserve skepticism
Severance agreements almost always come with a deadline, and that deadline often looks urgent. Sometimes it matters legally. Sometimes it is pure pressure.
A New York timing reality many employees miss: In New York, severance deadlines frequently appear shorter than the law actually requires for certain types of releases. Employers, particularly in New York City, often use standardized separation templates designed to create closure quickly.
The point is not that deadlines can be ignored. It is that deadlines should be understood before they are obeyed. Whether a severance deadline is enforceable depends on what rights are being released, how the agreement is structured, and which laws apply.
Rushing to sign is rarely required. Rushing to reject is rarely strategic.
Deciding what to do next
A severance agreement generally presents three options: sign it, try to change it, or walk away. Which option makes sense depends on factors that are not visible on the page. Documentation, job responsibilities, how the separation occurred, potential legal exposure, and future employment plans all matter.
Two employees offered identical severance packages can reasonably make different decisions. The mistake is assuming there is a single “right” move, or that severance agreements are meant to be taken at face value.
A final word for New York employees
In New York City and Nassau County, employers tend to rely on polished, repeat-player severance templates. That polish is intentional. The agreements are designed to feel routine, inevitable, and non-negotiable.
They are none of those things.
A severance agreement is a legal risk-allocation document. Before you sign away rights, obligations, or future leverage, it is worth understanding what you are actually giving up, and why the employer is asking for it.
Frequently Asked Questions About Severance Agreements in New York
Do I have to accept a severance agreement in New York?
No. In most cases, severance is voluntary. An employer cannot force you to sign a severance agreement, but declining it may mean giving up the severance pay being offered.
Is severance pay required by law in New York?
Generally, no. New York law does not require employers to offer severance pay, except in limited circumstances such as certain mass layoffs or plant closings.
Can I negotiate a severance agreement in New York?
Sometimes. Whether changes are possible depends on the employer, the circumstances of your separation, and the legal risks involved. Not every severance agreement is negotiable, but many are not as fixed as they appear.
Should I sign a severance agreement without a lawyer?
A severance agreement is a binding legal contract. Once signed, it is difficult or impossible to undo. Reviewing the agreement before signing can help you understand what rights you are giving up and whether the terms make sense in your situation.