Most severance agreements are negotiable. Most people don't negotiate them.
The pattern is consistent: someone gets terminated, HR hands them a 12-page severance agreement with a one-week deadline (or three-week deadline if they're 40 or over and ADEA applies), and they sign it. The reasons are understandable — shock, financial pressure, the desire to move on, the assumption that the offer is "what's standard" and not subject to discussion.
That assumption is almost always wrong. Severance terms are negotiable, often substantially. We've seen executives walk away with two extra months of salary, full vesting acceleration, and removal of restrictive covenants by spending a few hours with an attorney before signing. We've seen mid-level employees recover several thousand dollars and retain unvested equity that would otherwise have been forfeited.
This article is a five-step framework for figuring out what's standard, what's not, and where the leverage to push back lives.
Step 1: Read the agreement carefully — twice
Severance agreements are dense. Most people skim them and focus on the dollar amount. The dollar amount is one of the least negotiable terms; everything else is more negotiable, and several of the other terms matter more financially over time.
What to look for on the first read:
- Severance amount — weeks of pay, lump sum or installments
- Continued benefits — health insurance (COBRA subsidy?), other benefits
- Equity treatment — what happens to vested options, unvested options, RSUs, restricted stock
- Bonus — earned bonus payable, prorated bonus, full annual bonus
- Restrictive covenants — non-compete, non-solicit, non-disparagement
- Release of claims — what you're giving up by signing
- Reference language — what the company will say if asked
- Confidentiality — what you can and can't say about the agreement or the circumstances
On the second read, look for what's missing. The standard playbook is to include the items above and to leave out things that benefit you. Common omissions: vesting acceleration, COBRA subsidy, agreed reference language, mutual non-disparagement.
Step 2: Calculate the actual value of what's offered (and what's missing)
Don't compare offers in weeks of pay. Compare them in dollars across all categories.
Category 1: Cash
Base salary × weeks offered = cash component. Easiest to calculate. Typically the largest single component for non-executive employees.
Category 2: Benefits continuation
Health insurance is the big one. If the company is offering 6 months of subsidized COBRA, that's worth roughly $500–$1,500/month for an individual or $1,500–$4,000/month for a family — so the COBRA subsidy can be worth $3,000 to $24,000 depending on coverage. If they're not offering it, ask. It's often easier for the company to add than additional cash.
Category 3: Equity
Often the largest financial item, especially in tech and at companies with rising valuations. Three things to know:
- Vested equity — typically yours regardless. Confirm the post-termination exercise window for stock options (usually 90 days, sometimes longer).
- Unvested equity — typically forfeited unless the agreement provides otherwise. This is where vesting acceleration matters most.
- Vesting acceleration — additional vesting credit beyond what you'd otherwise have. Common forms: a few months of additional vesting, "single-trigger" full acceleration on certain events, "double-trigger" acceleration on involuntary termination after a change of control.
For senior employees, equity treatment can dwarf the cash component. A 6-month vesting acceleration on a $400,000 unvested equity stake is worth $50,000+. It's worth real negotiation.
Category 4: Bonus
If you've earned the year's bonus but it hasn't been paid yet, you should get it. If you're terminated mid-year, the question is whether you get a prorated bonus or zero. Most agreements say zero by default; many will negotiate to a prorated amount.
Category 5: Restrictive covenants — the hidden cost
This is where most people give up real value without realizing it. A 12-month non-compete severely limits your earning power for a year. A broad non-solicit restricts who you can work with. The "value" of restrictive covenants is hard to quantify directly but is often the largest negotiable item — both because they're often not enforceable as written, and because the employer has reason to soften them in exchange for clean separation.
Recent legal changes have made non-competes less enforceable in many jurisdictions. The FTC issued a rule attempting to ban most of them (currently being litigated). California, Minnesota, North Dakota, and Oklahoma already bar most non-competes. New York has limited them for certain workers. Even where non-competes remain enforceable, courts often refuse to enforce them as written if the scope, geography, or duration is excessive. Your attorney can give you a clearer read on whether the non-compete in your agreement is likely to bind you, which directly affects your willingness to negotiate it out vs. simply ignore it.
Step 3: Identify your leverage
Negotiating severance requires knowing what you have to negotiate with. Common forms of leverage:
Potential legal claims
If your termination involved any of the following, you may have legal claims that the severance agreement is asking you to release:
- Discrimination based on age, sex, race, disability, religion, sexual orientation, gender identity, pregnancy, or family status
- Retaliation for whistleblowing, complaining about discrimination or harassment, taking legally protected leave, or other protected activity
- Wage and hour violations (unpaid overtime, misclassification)
- Breach of contract or implied contract
- Wrongful termination in violation of public policy
- Defamation
You don't need to sue to use this as leverage. The mere existence of a plausible claim — and the company's awareness that you have an attorney — often shifts the negotiation. The company would rather pay an additional $20,000 in severance than pay $200,000 in litigation costs to defend a claim, even one they'd ultimately win.
Inside information
If you have inside knowledge that's valuable to the company — confidential information, key client relationships, technical expertise — your separation creates risk for them. They want clean separation. Clean separation is worth paying for.
Timing
If your termination is part of a layoff, the company is often working under HR and PR pressure to close the situation cleanly. Pushing back gracefully but firmly often produces movement. Conversely, if you're being terminated for individual performance reasons, leverage is lower.
Reference and reputation
How the company describes your departure to future employers, regulators (in regulated industries), or the press matters. Negotiated reference language and mutual non-disparagement are often easier to get than additional money.
Step 4: Make a clean ask
Once you know what's offered, what's missing, and where your leverage is, prepare a structured counterproposal. Don't ask for everything — ask for the few items that matter most, framed as reasonable adjustments.
Standard structure
A typical counterproposal email goes something like this:
- Acknowledge — "Thank you for the proposed severance. I've had a chance to review it carefully."
- List specific asks — "There are three modifications I'd like to propose..."
- Justify briefly — One sentence per ask explaining why it's reasonable in this context.
- Close cleanly — "Happy to discuss any of these on a call. I'd like to find a final agreement that works for both sides."
Three asks is usually the right number. More than that reads as a wishlist; fewer leaves value on the table. The asks should be the ones that matter most financially or affect your future earning power.
Step 5: Get it in writing — and read the final version carefully
Once you've negotiated, the company will send a revised agreement. Read it as carefully as the original. Counter-proposals frequently come back with the agreed changes, plus other changes you didn't ask for that benefit the company. This isn't always bad faith — it's often the legal team incorporating multiple comments into one revision — but it's worth checking line by line.
Sign only when the agreement reflects what was actually agreed.
One more thing to know: most severance agreements include a 7-day revocation period for ADEA waivers (if you're 40 or older). After signing, you have 7 days to revoke. Use that period as a final review window if needed.
When you should definitely call a lawyer first
Cases where attorney involvement isn't optional — it's strongly recommended even at modest cost:
- Senior or executive role with significant equity, restricted covenants, or deferred compensation
- Termination after you complained about discrimination, harassment, or other misconduct
- Termination near a vesting cliff or right after you exercised a protected right (FMLA, jury duty, military leave)
- Termination involving a regulated industry (financial services, healthcare, defense)
- Cross-border or multi-state employment situations
- Severance offer involving more than 10-12 weeks of pay (the math is more complex)
Severance review is one of the highest-ROI legal services you can buy. A few hours of attorney time often produces tens of thousands of dollars in additional severance, retained equity, or removed restrictions on your next role. Read more about our flat-fee severance review practice or get a quote — most reviews are turned around in 24-48 hours.
Frequently asked questions
Is severance negotiable?
Almost always, yes. The dollar amount is the least negotiable component, but other terms (equity treatment, restrictive covenants, COBRA subsidy, reference language, prorated bonus) are often substantially negotiable. The mere fact that the employee has retained an attorney often shifts the negotiation, even if no formal legal threat is made.
How much time do I have to review and sign a severance agreement?
If you're 40 or over and the agreement asks you to release age discrimination claims under ADEA, you must be given at least 21 days (45 days for group layoffs) to consider the agreement, plus a 7-day revocation period after signing. If you're under 40 or no ADEA waiver is involved, the timeframe is whatever the company offers — typically a week or two. Don't let a short timeline pressure you into signing without review.
What's a typical severance package?
Highly variable. The most common rule of thumb is one to two weeks of base salary per year of service, capped at some maximum. But this varies by industry, role, company size, circumstances of termination, and your leverage. Executive severance is governed by employment agreements and is often substantially more generous. Layoff severance is typically more generous than individual termination severance.
Can I keep my unvested equity in a severance negotiation?
Sometimes. Vesting acceleration on termination is highly negotiable, especially for senior employees. Common outcomes include a few months of accelerated vesting, full acceleration on involuntary termination, or a buyout of the value of unvested equity. The leverage to negotiate equity acceleration depends on your role, your remaining equity stake, and the circumstances of the termination.
What happens if I don't sign the severance agreement?
You'll typically receive only what you're legally entitled to — your final paycheck, accrued PTO, vested benefits — and nothing more. The 'severance' itself is offered in exchange for your signature on the agreement. If you don't sign, you don't get severance. But you also retain your right to pursue any legal claims, which is often more valuable than the severance offered, depending on the circumstances.
Should I take the severance to a lawyer?
If you're in any of these situations, yes: senior or executive role with equity or restrictive covenants, termination after complaining about discrimination or other misconduct, termination near a vesting cliff, regulated industry, or severance over 10-12 weeks of pay. Most severance reviews are flat-fee and turn around in 24-48 hours. The legal cost is typically a fraction of the negotiated improvement to the agreement.
What's the difference between a non-compete and a non-solicit?
A non-compete restricts you from working for a competitor for some period after termination. A non-solicit restricts you from soliciting your former employer's clients or employees for some period. Non-competes are increasingly unenforceable (banned in California, Minnesota, North Dakota, Oklahoma; FTC rule under litigation; New York limits). Non-solicits are generally more enforceable but often overdrawn. Both are negotiable in severance — and often easier to remove than to keep.