Severance agreement red flags: ten clauses to examine

Identify restricted work, customers, duration and geography. Enforceability depends on state law and circumstances. Illinois regulates covered covenants through the Freedom to Work Act; do not treat that statute as a nationwide rule.

Ask whether an older employment agreement is being reaffirmed and whether the new payment changes any restriction.

Check who is bound, what counts as a prohibited statement and any exceptions. Restrictions can raise different questions depending on worker status and applicable law.

Ask how truthful statements, agency communications and future references are treated. Mutual wording may be requested, but is not guaranteed.

The EEOC explains that waivers cannot cover discrimination claims based on future conduct. Wording about unknown existing claims is not necessarily the same as wording about events that have not occurred.

Ask an attorney to distinguish those concepts in the exact sentence rather than relying on an isolated phrase.

A voluntary-resignation description or benefit waiver may affect an application. Illinois law generally makes agreements waiving rights under its Unemployment Insurance Act void, subject to the Act.

This does not guarantee benefit eligibility. The agency determines eligibility under applicable rules and facts.

A release should not prevent filing an EEOC charge or participating in an EEOC proceeding. Distinguish those rights from questions about personal recovery.

Ask whether cooperation and reporting exceptions are clear, and whether any repayment language interferes with protected activity.

For covered ADEA waivers by people 40 or older, check the 21-day individual or 45-day group consideration period, 7-day revocation period and other required disclosures.

A short deadline is a reason to investigate, not proof that the employer used an unreviewed template or that the whole agreement is invalid.

Find the coverage end date, continuation notices and who pays premiums. COBRA eligibility depends on the plan and qualifying event.

Silence does not promise an employer subsidy. Ask for the actual coverage and cost terms.

Check final wages, commissions, bonus terms, expenses and payable leave separately. State wage law, plan terms and the facts can determine what is owed.

Ask whether the payment is additional consideration for the release or includes amounts already due.

An affiliate definition can extend a restriction beyond the company you worked for. Read the defined terms and consequences of applying for a future job.

Ask which entities are covered and whether exceptions are needed. Do not assume every no-rehire clause has the same legal effect.

Post-employment assistance may have no clear time limit or compensation term. A repayment clause can expose you to more than the unpaid balance of severance.

Ask about time limits, payment for your time, expenses, notice and the exact events triggering repayment.

These paired excerpts are hypothetical. Neither is a legal recommendation or a promise of enforceability; the contrast shows why the complete clause matters.

For each flagged clause, keep its section number, exact wording, exceptions, duration and remedy together. A reassuring exception elsewhere may narrow the obligation; a definition or repayment section may expand it.