When Your Severance Agreement Meets a Wrongful Termination Lawyer in New York
Losing your job feels devastating enough without wondering if you’re signing away your legal rights for a few months of pay. If your employer hands you a severance agreement after what feels like an unfair or discriminatory termination, you face a difficult choice: take the money now or preserve your right to fight back in court. The harsh reality is that yes, accepting a severance package typically does prevent you from filing a wrongful termination lawsuit—but the details matter immensely. Understanding exactly what you’re giving up and whether the trade-off makes sense requires careful consideration of your specific situation, the terms of the agreement, and what evidence you have of wrongful termination.
💡 Pro Tip: Never sign a severance agreement on the spot. Take it home, read every word, and consider having an attorney review it—especially if you suspect discrimination or retaliation led to your termination.
When faced with the difficult decision of accepting a severance package or exploring your legal rights, navigating this complex situation can feel overwhelming. Reach out to Kessler Matura P.C. for guidance that aligns with your best interests. Give us a call at 631-499-9100 or contact us today to ensure you’re making informed choices.
Your Legal Rights When Severance Meets Wrongful Termination
When an employer offers severance pay, they almost always require you to sign a release that frees them from all potential liability, including discrimination claims and wrongful termination lawsuits. This isn’t just corporate policy—it’s the entire point of offering severance in many cases. A wrongful termination lawyer in New York sees this scenario regularly: companies use severance packages as insurance policies against future lawsuits. The release you sign typically covers claims under federal laws like Title VII (which prohibits discrimination based on race, color, religion, sex, or national origin), the Americans with Disabilities Act, and the Equal Pay Act, as well as state and local anti-discrimination laws.
However, certain rights cannot be waived even with a signed severance agreement. You retain the right to file a discrimination charge with the Equal Employment Opportunity Commission (EEOC), and the agreement cannot restrict your right to testify, assist, or participate in any EEOC investigation, hearing, or proceeding. Additionally, employers cannot require you to waive rights that will arise in the future—meaning if they discriminate against you after you sign the agreement, you can still take legal action for those new incidents.
💡 Pro Tip: Even if you’ve already signed a severance agreement, you can still file an EEOC charge. While you may not be able to collect monetary damages due to the waiver, filing helps establish a record and can lead to systemic changes at your former workplace.
Critical Deadlines: How Long Do You Have to Decide?
The timeline for reviewing and signing a severance agreement depends significantly on your age and circumstances. If you’re under 40, there’s no federally mandated review period—your employer can pressure you to sign immediately, though many provide a few days as a courtesy. However, employees aged 40 and over receive substantial protections under the Age Discrimination in Employment Act (ADEA) and the Older Workers Benefit Protection Act (OWBPA).
- Individual termination (over 40): You must be given at least 21 days to consider the agreement before signing
- Group layoff affecting anyone over 40: All laid-off employees get 45 days to review, regardless of their individual ages
- Revocation period: After signing, employees over 40 have 7 days to change their minds and revoke the agreement
- Consideration period starts when you receive the final agreement—any material changes restart the clock
- Employers must provide specific information about the ages and job titles of all employees selected and not selected for layoff in group terminations
💡 Pro Tip: Mark your calendar with these deadlines immediately upon receiving a severance offer. Missing a deadline could mean losing both your severance pay and your right to sue—the worst of both worlds.
Strategic Options: How Kessler Matura P.C. Helps You Navigate This Crossroads
When facing a severance agreement after potential wrongful termination, you have more options than simply accepting or rejecting the offer. A wrongful termination lawyer in New York can evaluate the strength of your discrimination or retaliation claims against the value of the severance package, often negotiating better terms that reflect the true value of the claims you’re waiving. At Kessler Matura P.C., attorneys analyze whether your severance amount adequately compensates you for giving up potentially valuable legal claims, especially when evidence suggests discriminatory termination.
Sometimes the smartest move involves negotiating modifications to the severance agreement rather than pursuing litigation. This might include increasing the monetary amount, extending health benefits, improving the reference your employer will provide, or removing non-compete clauses that could hamper your job search. Employers often prefer to pay more severance rather than face the uncertainty, expense, and publicity of a wrongful termination lawsuit, giving skilled negotiators leverage to improve your package significantly.
💡 Pro Tip: Calculate the real value of your severance by considering not just the lump sum but also continued benefits, the tax implications, and what you might recover in a successful lawsuit—then negotiate from an informed position.
Severance Agreement Red Flags That Scream ‘Get Legal Help’
Not all severance agreements are created equal, and some contain provisions that should make you pause before signing. A wrongful termination lawyer in New York regularly identifies problematic clauses that go beyond standard releases. Watch for agreements that require you to pay back the severance if you later challenge the waiver, contain overly broad confidentiality provisions that could prevent you from discussing workplace discrimination, or include non-disparagement clauses so restrictive they could interfere with providing honest job references to potential employers.
Hidden Traps in the Fine Print
We’ve seen severance agreements that try to make employees responsible for the company’s legal fees if they file any claims—even EEOC charges they’re legally entitled to file. Others attempt to waive rights under laws that explicitly prohibit such waivers. Some agreements even try to classify the severance payment as something other than wages to avoid tax withholding requirements, potentially leaving you with a surprise tax bill. These overreaching provisions might make the entire agreement voidable, but you need legal guidance to identify and challenge them effectively.
💡 Pro Tip: If your severance agreement is more than a few pages long or includes numerous "whereas" clauses and legal jargon, that’s a sign it contains more than standard provisions and deserves professional review.
When Severance Becomes Taxable: Financial Realities You Must Consider
Many employees forget that severance pay is considered taxable income, potentially pushing you into a higher tax bracket for the year you receive it. This tax impact can significantly reduce the actual value of your severance package. Unlike regular paychecks where taxes are withheld gradually, lump-sum severance payments often trigger higher withholding rates. A wrongful termination lawyer in New York works with financial advisors to help clients understand these implications before accepting an offer.
Maximizing Your Severance Value
Strategic negotiation can address tax concerns and increase your net recovery. Consider requesting that severance be paid over time rather than in a lump sum to spread the tax burden across multiple years. You might also negotiate for the employer to continue contributions to your 401(k) or to pay COBRA premiums directly rather than giving you taxable cash. Some employers will agree to structure portions of the payment as reimbursement for job search expenses or professional development, which may have different tax treatment. Near the Walt Whitman Shops in Melville, we’ve helped numerous clients restructure severance packages to minimize tax impact while maximizing total value.
💡 Pro Tip: Ask your employer to "gross up" the severance payment to cover the additional taxes you’ll owe—some companies will agree to this, especially if they’re eager to obtain your release of claims.
Frequently Asked Questions
Common Concerns About Severance and Wrongful Termination
Employees facing severance offers while suspecting wrongful termination often share similar worries about their rights, options, and the long-term consequences of their decisions.
💡 Pro Tip: Write down all your questions before meeting with an attorney—the stress of job loss can make it easy to forget important concerns during consultations.
Next Steps and Legal Process
Understanding what happens after you sign or refuse a severance agreement helps you make informed decisions about your future.
💡 Pro Tip: Keep copies of all employment-related documents in a secure location outside your workplace—you may lose access to important evidence once your termination is final.
1. Can I negotiate my severance package even if I don’t have a wrongful termination claim?
Yes, severance packages are often negotiable regardless of whether you have legal claims. Employers may increase offers to ensure smooth transitions, maintain goodwill, or avoid even the possibility of litigation. However, having potential legal claims provides significant additional leverage in negotiations.
2. What if I already signed a severance agreement but now have evidence of discrimination?
While signed agreements are generally binding, certain circumstances might invalidate them. If you signed under duress, lacked the legally required review period, or discovered evidence of fraudulent concealment by your employer, you may be able to challenge the agreement. Consult with a wrongful termination lawyer in New York immediately to assess your options.
3. Does my employer have to offer me severance pay when they fire me?
No, there is no federal requirement under the Fair Labor Standards Act (FLSA) for severance pay. Severance is a matter of agreement between employer and employee. However, if your employee handbook, employment contract, or company practice establishes an expectation of severance, you may have a claim for those benefits.
4. How do I know if my termination was actually "wrongful" under the law?
Wrongful termination occurs when firing violates federal, state, or local laws—such as discrimination based on protected characteristics, retaliation for whistleblowing, or breach of employment contract. Simply being fired unfairly or without good cause isn’t necessarily illegal unless it violates specific legal protections.
5. Can my employer require me to keep the severance agreement confidential?
Yes, employers can include confidentiality provisions in severance agreements, but these cannot prevent you from filing EEOC charges or participating in government investigations. Be wary of overly broad confidentiality clauses that might interfere with your ability to seek new employment or discuss workplace conditions that affect public safety.
Work with a Trusted Wrongful Termination Lawyer
Facing job loss while juggling severance negotiations and potential legal claims demands experienced legal guidance. The decision to accept a severance package or pursue wrongful termination claims has lasting financial and professional consequences. Working with knowledgeable attorneys ensures you understand all options, maximize your recovery, and protect your future career prospects. Whether your employer is a small business in Melville or a major corporation, having skilled representation levels the playing field during this challenging time.
Don’t let confusion about severance packages keep you from protecting your rights. Reach out to Kessler Matura P.C. for insightful advice tailored to your situation. Call us at 631-499-9100 or contact us today to navigate your options with clarity.
