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Introduction to Severance Packages

When you’re let go from a job, receiving a severance package can provide a temporary financial cushion. This package often includes continued salary and benefits for a period, giving you time to search for new employment or even take a break. However, it’s crucial to understand the terms and conditions attached to this package before signing any agreement.

The Importance of Reviewing Severance Agreements

Signing a severance agreement without fully understanding its terms can lead to unintended consequences. If you inadvertently violate the terms, not only could you lose the financial benefits, but you might also face legal issues. Severance agreements often contain clauses that, if overlooked, can create significant problems down the line.

Key Clauses in Severance Agreements

1. Noncompete Clauses

What are they?
Noncompete clauses are common in industries where there is a high risk of employees joining competitors. Such clauses restrict your ability to work for competing firms within a certain timeframe and geographical area after leaving your job.

Example: If you work for a tech company in Silicon Valley, your noncompete might prohibit you from working for another tech company in the same region for two years.

Negotiating Noncompetes
You can often negotiate these clauses. For instance, you might request a shorter period or a smaller geographical scope to reduce the impact on your future job prospects.

2. Proprietary Information

What is it?
This clause prevents you from using or sharing confidential information, like trade secrets or unique designs, which you were exposed to during your employment.

Example: If you were part of a team developing a new software product, you might be restricted from using any related information in your next job.

Seeking Amendments
You may request amendments if you contributed to the development of the proprietary information, ensuring that you can use your own innovations without infringement.

3. Integration Clauses

Why are they beneficial?
An integration clause ensures that all verbal or informal promises made by your employer are included in the severance agreement. Without this clause, such promises are not legally enforceable.

Example: If your employer promised a bonus in a meeting, but it’s not in the written agreement, an integration clause can ensure it’s legally recognized.

4. Release of Claims

What does it mean?
A release of claims clause means you agree not to sue your employer after you leave. This is standard but requires careful consideration.

Example: If you think you might have grounds for a lawsuit due to unfair treatment or unsafe work conditions, signing this clause would prevent you from pursuing legal action.

Consulting Legal Assistance

Given the complexities and potential implications of severance agreements, it’s advisable to consult with an attorney. A legal expert can review your agreement, point out any problematic clauses, and help negotiate terms that protect your interests.


Understanding each element of your severance package is vital. Take the time to read and comprehend each clause, and don’t hesitate to seek professional advice. This approach not only safeguards your rights but also ensures that you are making informed decisions about your professional future.

J. Horowitz
J. Horowitz

J. Horowitz leverages over two decades of experience as a seasoned employment law attorney in Arizona to offer insightful freelance writing on the same subject. After a successful career advocating for fairness and justice in the workplace, J. now dedicates his expertise to writing comprehensive articles, blog posts, and thought leadership pieces that illuminate the complexities of employment law.