Severance Negotiation

The process of requesting more than the initial severance offer from an employer — a right most departing employees don't know they have.

Most employees don't realize that severance packages — unlike statutory rights — are almost always negotiable. Employers rarely lead with their maximum offer, and many employees sign whatever severance agreement is placed in front of them without asking for more. In exchange for severance pay, employers ask employees to sign a release of claims (waiving the right to sue). The release is valuable to the employer; how much they'll pay for it depends on circumstances and your willingness to negotiate.

Before negotiating, understand what you have to bargain with. Leverage comes from: potential legal claims (discrimination, retaliation, wage violations, wrongful termination), your tenure and seniority, the circumstances of your departure, the employer's reputational interest in a clean separation, and your willingness to delay signing. The ADEA (Age Discrimination in Employment Act) gives employees over 40 a mandatory 21-day review period plus a 7-day revocation window on any release of age discrimination claims — which gives older workers extra time to consult counsel and negotiate.

Items to negotiate include: additional cash severance (extending the notice period or adding weeks), extended health insurance (continuing COBRA at company expense), accelerated vesting of equity, a favorable reference (written, if possible), extended use of company equipment or tools, removal or narrowing of non-compete terms, and outplacement services. Not all will be available in every situation, but each is a legitimate ask. Consulting an employment attorney before signing is often worth the cost — many offer flat-fee severance reviews.

What to Ask For

  • Additional weeks of pay: the initial offer is rarely the maximum. Asking for more — especially when your tenure is long — frequently results in an increase.
  • Extended benefits: continuation of health insurance at employer cost beyond the standard COBRA start date.
  • Equity acceleration: vesting of the next tranche of shares as part of the separation.
  • Narrowed non-compete: if your agreement contains one, negotiate the scope, geography, or duration down.
  • Positive reference: get the company's reference language in writing — what title, dates, and statements they'll confirm.
  • Outplacement services: career coaching and job search support, often available but not offered proactively.
  • Neutral separation: documented as a layoff, not a termination for cause — affects unemployment eligibility and background check outcomes.

The ADEA 21-Day Rule

  • If you're 40 or older, any release of age discrimination claims must give you 21 days to review and 7 days to revoke after signing.
  • Employers can't shorten these windows — they're statutory minimums under the Older Workers Benefit Protection Act.
  • Use the 21 days strategically: consult an employment attorney, evaluate your claims, and negotiate improvements.
  • Group layoffs involving employees over 40 also require employers to disclose the ages and job titles of everyone included in and excluded from the layoff — a requirement employees often aren't told about.

Example

A 45-year-old VP of Engineering is laid off with an offer of 8 weeks of severance. She waits a week, consults an employment attorney (who identifies a potential age discrimination angle given the layoff skewed heavily toward older employees), and counters requesting 20 weeks of severance, 6 months of company-paid COBRA, and full acceleration of the next cliff on her unvested equity. After two rounds of negotiation, she receives 16 weeks of severance, 3 months of company-paid COBRA, and a favorable written reference — without filing any claim.