Severance Agreements and Negotiation: What Ohio Employees Need to Know

When an employer offers a severance package, most employees assume the number on the page is the number they will receive. It is not. Severance agreements are almost always negotiable, and the initial offer is rarely the employer's best offer. Understanding what is in a severance agreement, what you are giving up by signing it, and where there is room to negotiate can mean the difference between leaving on your employer's terms and leaving on your own.

What a Severance Agreement Is

A severance agreement is a contract between you and your employer. In exchange for severance pay and other benefits, you agree to release your employer from legal claims. The release is the most significant part of the agreement from the employer's perspective, and understanding what you are releasing is the most important thing you can do before signing.

A standard severance agreement releases the employer from all claims you have or might have arising from your employment, including discrimination claims, retaliation claims, wage and hour claims, and wrongful termination claims. Once you sign and the revocation period passes, those claims are gone. You cannot later decide that the amount was not enough and pursue legal action.

You Are Not Required to Sign

Employers present severance agreements as standard paperwork, and many employees feel pressure to sign quickly. You are not required to sign. You are not required to sign within the employer's suggested timeframe in most cases. And you are not required to accept the first offer.

For employees 40 and older, the Older Workers Benefit Protection Act requires that you be given at least 21 days to consider the agreement and at least 7 days to revoke it after signing. These are legal minimums that your employer cannot waive. If you are over 40 and your employer is pressuring you to sign within a day or two, that pressure is improper and worth noting.

What to Look For Before Signing

Before considering whether to negotiate, understand exactly what you are signing. Key provisions to review carefully include:

The release of claims

What specific claims are you releasing? A well-drafted release covers everything. But some releases attempt to include claims that cannot be waived, such as the right to file a charge with the EEOC. Knowing what you are and are not giving up matters.

Non-disparagement clause

Many severance agreements prohibit you from saying anything negative about the employer, its products, or its employees. These clauses can be broad and can restrict what you say to future employers, on social media, or in professional settings. Check whether the clause is mutual, meaning whether the employer is equally prohibited from disparaging you.

Non-compete and non-solicitation clauses

Some severance agreements include or reinforce non-compete or non-solicitation obligations. In Ohio, non-competes must be reasonable in scope, duration, and geographic reach to be enforceable. A severance agreement is not an opportunity for an employer to impose new restrictive covenants that were not in your original employment agreement without additional consideration.

Cooperation clause

Many agreements require you to cooperate with the employer in future litigation or investigations. Understand what this requires and whether it is limited to matters arising from your employment or broader.

Confidentiality

Nearly every severance agreement requires you to keep the terms confidential. Know what you can and cannot say about the agreement and to whom.

What Is Negotiable

The short answer is: more than you think. Here is where employees most commonly have room to push:

The amount

The severance amount is almost always negotiable. The baseline negotiating position is that the employer is asking you to release legal claims that have real value. If you have a strong discrimination or retaliation claim, the value of those claims is leverage. Even if you do not have an obvious legal claim, the employer wants a clean separation and that is worth something.

Continuation of benefits

Health insurance continuation, vesting of stock or retirement benefits, and outplacement services are all negotiable. Employers sometimes extend COBRA coverage or continue benefits for a defined period as part of a negotiated severance package.

The non-disparagement clause

Push for mutuality. If you cannot say negative things about the employer, the employer should not be able to say negative things about you. This matters for references and future employment.

Reference language

A severance agreement is an opportunity to nail down what your employer will say when future employers call. A specific agreed reference letter or a confirmed neutral reference policy is worth including.

The scope of the release

In some cases there are claims you may want to preserve. Workers' compensation claims, vested pension benefits, and EEOC charge rights generally cannot be waived. But there may be other claims worth discussing with an attorney before agreeing to a broad release.

When Legal Claims Increase Your Leverage

If your separation involved conduct that gives rise to a legal claim, your leverage in severance negotiations is significantly greater. An employer offering severance after a discriminatory termination, a retaliation-driven layoff, or a hostile work environment situation is paying to extinguish claims that could be worth substantially more than the offered amount.

This is the most important reason to consult an employment attorney before signing a severance agreement. An attorney can evaluate whether you have viable legal claims, what those claims might be worth, and whether the severance offer reflects the value of what you are giving up. In many cases a single consultation changes the negotiation entirely.

The Bottom Line

A severance agreement is a legal contract that permanently extinguishes your rights. It deserves careful review and, in most cases, an attempt to negotiate better terms. The employer wants your signature. That gives you more leverage than you probably realize. An employment attorney can help you understand what you are giving up, evaluate whether you have legal claims that increase your leverage, and negotiate a better outcome.