When you're presented with a severance agreement, it often comes during a stressful time—perhaps after an unexpected layoff or during a major career transition. While these agreements may seem like a generous gesture, they are legally binding contracts that often carry terms heavily favoring the employer. Before signing anything, it’s crucial to recognize the potential red flags and understand what you’re agreeing to.



At The Lovitz Law Firm, we assist individuals throughout Philadelphia in reviewing and negotiating severance agreements to ensure their rights and future opportunities are protected.

1. Overly Broad Non-Compete Clauses

One of the most common red flags is an overly restrictive non-compete clause. These provisions can prevent you from working in your industry, sometimes for years or within a large geographic area. Courts in Pennsylvania may not always enforce unreasonable non-competes, but signing one can still impact your job search and leverage in future employment.

What to watch for:

• Length of the restriction (6+ months may be excessive)
• Geographic scope (too broad or vague)
• Industry definition (make sure it’s specific, not all-encompassing)

2. Waiver of Legal Claims Without Adequate Compensation

Most severance agreements ask you to waive your right to sue the employer for any reason, including discrimination, wrongful termination, or unpaid wages. That’s a significant concession, and you should only agree to it if the severance package provides meaningful compensation in return.

What to watch for:

• A release of claims without any severance pay or with only minimal compensation
• Broad language that may include unknown claims
• Waiver of rights under state or federal employment laws

3. Confidentiality and Non-Disparagement Clauses

While it’s common for employers to request confidentiality, overly strict language can limit your ability to speak about your experience or seek support.

What to watch for:

• Blanket prohibitions on discussing the agreement with anyone, including future employers or close family
• Language that could be interpreted as waiving your right to participate in an investigation or report misconduct
• Non-disparagement clauses that prevent you from truthfully discussing the circumstances of your termination

4. Repayment or Clawback Provisions

Some severance agreements contain terms that require you to repay part or all of the severance if you violate any of the agreement’s terms—sometimes even unintentionally.

What to watch for:

• Vague or overly harsh repayment clauses
• Terms that allow the employer broad discretion to claim a breach
• No opportunity to cure an alleged breach before repayment is demanded

5. Pressure to Sign Quickly

Employers often give a short deadline to review and sign the agreement. However, under federal law (such as the Older Workers Benefit Protection Act), employees over 40 must be given at least 21 days to consider a severance offer if it involves a waiver of age discrimination claims.

What to watch for:

• Deadlines that do not align with legal requirements
• Pressure to sign immediately without time to consult an attorney
• Refusal to negotiate any terms

Legal Guidance for Philadelphia Workers

You don’t have to navigate this alone. At The Lovitz Law Firm, we’re committed to protecting workers’ rights in Philadelphia. If you’ve been offered a severance package, we can help you understand the fine print, identify potential risks, and negotiate more favorable terms.