Severance Agreement Compliance Checklist: 8 Ways a Release Fails

Why it matters: For an age-discrimination (ADEA) waiver to be valid, the Older Workers Benefit Protection Act requires every element: written in plain language, a specific reference to ADEA claims, written advice to consult an attorney, at least 21 days to consider (45 days in a group program, plus written disclosure of the ages and job titles of everyone selected and not selected), and 7 days to revoke after signing. Courts enforce this as a checklist — substantial compliance doesn't count. Miss one element and the employee keeps both the severance and the age claim.

Check: Every element present; in a RIF, the decisional-unit disclosure attached; the 21/45-day clock isn't shortened by pressure to sign early.

Why it matters: Since the NLRB's 2023 McLaren Macomb decision, merely offering a severance agreement with overbroad confidentiality or non-disparagement clauses to non-supervisory employees is an unfair labor practice — the paper itself violates the law, whether or not anyone enforces it. Blanket "never discuss this agreement or say anything negative about the company" language is exactly what the Board condemned.

Check: Confidentiality is limited (e.g., the severance amount, with statutory exceptions), non-disparagement is defined narrowly if kept at all, and the agreement carves out NLRA Section 7 rights.

Why it matters: Some claims survive any release: unemployment benefits, workers' compensation, vested retirement benefits, and — as a general rule — FLSA minimum-wage and overtime claims, which typically require DOL supervision or court approval to settle privately. A release that sweeps these in doesn't just fail as to them; it makes the whole agreement look overreaching, which plaintiffs use to attack the knowing-and-voluntary character of everything else.

Check: The release lists standard exclusions expressly rather than claiming to waive "all claims of any kind whatsoever" without exception.

Why it matters: No agreement can waive the right to file a charge with the EEOC or NLRB, cooperate with an agency investigation, or collect an SEC whistleblower award — and the SEC has fined companies under Rule 21F-17 just for maintaining agreements that could be read to impede reporting. The employee can waive their own monetary recovery in litigation; they cannot be silenced toward the government.

Check: A protected-rights carve-out covers filing charges, participating in investigations, and receiving whistleblower awards — without requiring notice to the company.

Why it matters: A release must be purchased with something the employee isn't already entitled to. Final wages, accrued PTO in payout states, earned commissions, vested benefits — those are debts, not consideration. An agreement that "pays" only what the law already requires is an unenforceable release wearing a severance costume, and conditioning owed wages on signing violates state wage laws.

Check: Severance pay is clearly separate from (and in addition to) final wages, PTO payout, and anything else independently owed — and the agreement says so.

Why it matters: State law has moved fast here. California's SB 331 restricts confidentiality about all forms of unlawful harassment, discrimination, and retaliation in separation agreements, requires notice of the right to consult an attorney, and a minimum of 5 business days to consider. Washington, Illinois, New Jersey, and others have their own versions. A silence clause lifted from a 2018 template can be void — or an independent violation — depending on the state.

Check: Confidentiality clauses expressly permit discussion of unlawful conduct, and state-specific notice and consideration periods are honored for employees in restrictive states.

Why it matters: Some states require magic words. California Civil Code §1542 protects claims the releasor "does not know or suspect to exist" — a general release of unknown claims is effective in California only if the agreement quotes §1542 and expressly waives it. Other states have their own mechanics (Minnesota, for example, provides a statutory right to rescind certain releases within 15 days). The wrong state's boilerplate leaves gaps exactly where you wanted finality.

Check: Release language matches the employee's work state — §1542 waiver for California employees, rescission notices where required, governing law that will actually hold.

Why it matters: The most common post-signing disputes aren't about the release — they're about mechanics. When severance is paid (and that it's after the revocation period expires, not before), how it's taxed (severance is wages subject to withholding), what happens to health coverage and COBRA, equity treatment, and whether the agreement accidentally revives or contradicts prior agreements. A stray clause promising "continued cooperation" without pay or time limits also invites fights.

Check: Payment date follows the revocation window, withholding is stated, COBRA and equity are addressed consistently with plan documents, and an integration clause reconciles prior agreements (keeping, not erasing, surviving obligations like the NDA).