Most severance situations involve a single employee separation — a performance-based termination, a position elimination, a mutual decision that the relationship is no longer working. In each case, you need an agreement that provides a clean break while protecting your business from future claims.

We draft individual severance agreements that include a comprehensive release of claims covering all potential federal and Illinois causes of action, appropriately scoped non-compete, non-solicitation, and non-disparagement provisions, confidentiality protections for trade secrets and proprietary information, cooperation clauses for ongoing litigation or regulatory matters, return of property and data deletion requirements, and clear payment terms including any clawback provisions.

Every agreement is tailored to the specific circumstances of the separation — the employee’s role, seniority, access to confidential information, potential legal claims, and the business reasons for the termination. Template agreements from the internet do not account for any of this.

Group layoffs create unique legal exposure that individual severances do not. When you are separating multiple employees simultaneously, you must comply with the Illinois WARN Act (60-day advance notice for mass layoffs affecting 25 or more employees at single sites with 75+ total employees), the federal WARN Act (60-day notice for layoffs of 50+ employees at sites with 100+ employees), and the OWBPA group layoff requirements if any affected employees are 40 or older.

OWBPA group layoff compliance is particularly technical. You must provide each employee 40+ with the 45-day review period (not the standard 21 days), a 7-day revocation period, written notification of the job titles and ages of all individuals in the decisional unit who were selected and not selected for the layoff, and the eligibility factors and time limits applicable to the program. Getting any of these details wrong can void every age discrimination release in the entire layoff.

We draft group severance packages that include compliant OWBPA disclosures, consistent severance formulas, and coordinated release language — so one defective agreement does not unravel protections across the entire reduction-in-force.

Executive separations are higher-stakes and more complex than standard severances. The departing executive often has an existing employment agreement with severance triggers, equity vesting provisions, deferred compensation, and change-in-control protections that must be reconciled with the separation agreement. The executive is also more likely to retain sophisticated legal counsel who will push back on every provision.

We draft and negotiate executive separation agreements covering enhanced severance payments, equity acceleration and stock option treatment, deferred compensation considerations (IRC Section 409A compliance), bonus and commission true-ups, COBRA subsidies and benefit continuation, outplacement services, and board resignation and transition provisions.

We have negotiated C-suite exits valued at over $1M from publicly traded companies — we understand the dynamics from both sides of the table, which makes our employer-side drafting significantly stronger.

The release of claims is the most important provision in any severance agreement — it is the reason you are paying severance in the first place. A release that is too narrow, procedurally defective, or missing required language can leave you fully exposed to the very claims you thought you had resolved.

We draft releases that cover all potential claims under federal and Illinois law, including Title VII, the ADA, the ADEA, the IHRA, the IWPCA, FMLA, ERISA, and common law claims for wrongful termination, breach of contract, and defamation. We also address claims the employee may not yet be aware of, carve out obligations that cannot legally be waived (such as workers’ compensation, unemployment benefits, and the right to file EEOC charges), and ensure the consideration provided is adequate to support the waiver.

OWBPA requirements for employees 40+: If the departing employee is 40 or older, the release of age discrimination claims must comply with the Older Workers Benefit Protection Act: 21 days to consider the agreement (45 days in group layoffs), a 7-day revocation period after signing, written advisement to consult an attorney, and specific identification of the claims being waived. Failure to comply with any of these requirements renders the age discrimination release void and unenforceable — even if the employee signed it.

Workplace Transparency Act limits: Illinois’s Workplace Transparency Act restricts the use of non-disclosure and non-disparagement clauses in severance agreements connected to harassment or discrimination claims. We draft provisions that comply with these restrictions while still providing maximum confidentiality protection for your business.

A severance agreement is often your last opportunity to secure or reinforce post-employment restrictions. If the departing employee never signed a non-compete, the severance agreement can include one — with the severance payment serving as consideration. If the employee has an existing non-compete, the severance agreement can reaffirm and potentially strengthen those restrictions.

Under the Illinois Freedom to Work Act, non-compete agreements require the employee to earn at least $75,000 annually, and non-solicitation agreements require at least $45,000. Employees must also receive a 14-day advance review period and written advisement to consult an attorney. These requirements apply to restrictive covenants entered into as part of a severance agreement, not only those signed at hire.

We also draft non-disparagement clauses (subject to Workplace Transparency Act limits), social media restrictions, non-solicitation of employees provisions, and confidentiality and trade secret protections that survive the employment relationship. See our contract drafting services for additional restrictive covenant work.

Once you extend a severance offer, the employee will often retain an attorney who responds with a counter-demand — typically requesting more money, removal of the non-compete, broader benefits continuation, and narrower release language. How you respond to that counter-demand determines whether you resolve the matter efficiently or escalate into protracted negotiations or litigation.

We represent employers in severance negotiations by evaluating the employee’s actual leverage (do they have viable discrimination, retaliation, or wage claims?), crafting counteroffers that protect your key provisions while making strategic concessions, and managing the negotiation process to reach resolution within a defined timeline and budget.

Because we review severance agreements for employees every week, we know exactly what the other side’s attorney is looking for — and we know which demands are bluffs and which reflect genuine legal exposure.

Some separations carry elevated litigation risk that requires a different approach to severance. These include employees who have recently filed or threatened discrimination or harassment complaints, employees on FMLA leave or with pending disability accommodation requests, employees who have filed workers’ compensation claims, whistleblowers who reported legal violations, and employees in protected classes where the termination timing or circumstances could support an inference of discrimination.

In high-risk separations, the severance agreement is not just an administrative document — it is a litigation avoidance tool. The consideration must be sufficient to incentivize the employee to waive claims that may have real value. The release language must be comprehensive enough to cover the specific risk. And the process must be documented to show that the separation was handled fairly and in good faith.

We work with employers to assess litigation exposure, determine appropriate severance amounts relative to that exposure, and structure agreements that make it economically rational for the employee to accept rather than litigate. This is where our dual-side perspective is most valuable — we can realistically evaluate what a plaintiff’s attorney would advise the employee to do.

For employers who conduct separations regularly, having a company-wide severance policy and template library saves time, ensures consistency, and reduces legal exposure. We develop customized severance frameworks that include base severance formulas (typically calculated on tenure and salary level), standard agreement templates for different employee categories, OWBPA-compliant versions for employees 40+, group layoff templates with required disclosures, and manager checklists for the separation process.

Consistency matters in severance. If you give one employee six months of severance and a similarly situated employee two weeks, the second employee has a potential argument that the disparity was based on a protected characteristic. A clear severance policy with objective criteria protects against this exposure.

We also provide manager training on how to conduct separation meetings, what to say and not say during the conversation, and how to handle employee reactions — because a well-drafted agreement is undermined if the delivery creates additional legal risk. This integrates with our broader HR compliance services.