Losing a job can leave you facing financial pressure right when you need to make careful decisions. A severance agreement might offer welcome relief, but signing too quickly could mean giving up rights you may not get back. Before you sign anything, it helps to understand what the agreement actually asks of you.
Understanding the release of claims
Most severance agreements include a release of claims. This means you agree not to sue your employer for wrongful termination, discrimination or harassment. In exchange, you typically receive severance pay.
Before signing, think carefully about whether you have any potential claims against your employer. Once you sign, you generally cannot pursue those claims later.
Reviewing your time and rights
You are not required to sign an agreement right away. Employers must give you reasonable time to review the terms.
If you are 40 or older, federal law requires at least 21 days to review an individual agreement. Group layoffs allow 45 days. You also get 7 days to revoke your signature after signing.
Watching for restrictive clauses
Washington law places strict limits on non-compete agreements under RCW 49.62. These clauses can be void unless your earnings exceed a state-mandated threshold that adjusts yearly. A few specific protections matter most:
- Income threshold: Non-competes may be unenforceable below the state’s earnings cutoff.
- Garden leave: If you are laid off, a non-compete may only apply if your employer keeps paying your base salary during the restriction period.
- Out-of-state disputes: Your employer generally cannot force you to fight a non-compete case under another state’s laws.
These protections exist because broad restrictions can limit your ability to find new work.
Separating PTO from severance pay
Accrued paid time off is generally considered wages under Washington law. This applies if your employer’s policy promises payout at separation. Severance pay should be separate compensation, not a relabeled version of PTO you already earned.
You should also check how the agreement addresses health coverage. Some employers may extend benefits or help cover COBRA premiums for a period after you leave.
Knowing where to go from here
This article covered the core pieces of a severance agreement, including the release of claims, review timelines, non-compete limits and how PTO should be handled separately from severance pay. Understanding these terms before signing can help protect rights you may not be able to reclaim later.