Before You Sign: What Illinois Employees Should Know Before Signing a Severance Agreement

Being offered a severance package can be overwhelming, especially if your employer is pressuring you to make a quick decision. While severance pay can provide financial security during a career transition, signing an agreement without understanding its terms could mean giving up important legal rights.

Before accepting a severance package, here are a few things Illinois employees should know.

1. Severance Pay Is Not Always Required

Illinois employers generally are not required to offer severance pay unless an employment contract, company policy, collective bargaining agreement, or applicable law requires it. However, just because your employer offers a severance package does not mean you must accept its initial terms.

2. You May Be Waiving Your Legal Rights

Many severance agreements contain a release of claims, meaning you may be giving up your right to pursue certain legal actions against your employer. These may include claims involving discrimination, retaliation, wrongful termination, or other employment-related disputes. Before signing, it is important to understand exactly which rights you are releasing.

3. You May Be Able to Negotiate

Severance agreements are often negotiable. Depending on your circumstances, you may be able to request:

• Additional severance pay

• Continued health insurance benefits

• Payment of outstanding bonuses or commissions

• A neutral employment reference

• Changes to restrictive contractual provisions

An attorney can help evaluate whether the proposed terms are reasonable and identify opportunities for negotiation.

4. Don't Let Your Employer Rush You

Some employers give employees only a few days to accept a severance package or choose between severance and a performance improvement plan (PIP). While short deadlines are not automatically unlawful, employees should request sufficient time to review the written agreement and seek legal advice.

Employees age 40 and older who are asked to waive federal age discrimination claims generally must receive at least 21 days to consider an individual severance agreement, along with a seven-day revocation period. Different requirements may apply to group termination programs.

5. Speak With an Attorney Before Signing

A severance agreement is a legally binding contract that can affect your finances, career, and legal rights long after your employment ends. Having an attorney review the agreement can help you understand your options, identify unfavorable terms, and potentially negotiate a better package.