The scene is a familiar one. The door to the human resources office closes, and a multi-page packet is slid across the conference table. Your employment is ending. You are told to review the document and sign by Friday. This document, often titled a “Separation Agreement and General Release,” is a legally binding contract designed with one purpose in mind: to permanently extinguish your right to sue your employer for any claims you may have against it, including claims you may not yet know exist. The document was prepared by the employer’s counsel. You have not been represented. This asymmetry of information and legal power is the entire point of the exercise. This post addresses what every Connecticut employee must understand before signing away their rights.
What You Are Actually Signing
At its core, a severance agreement is a release of legal claims. It is a contract in which you, the employee, agree to surrender your right to bring legal action against your employer in exchange for “consideration.” Consideration is a legal term for something of value, and to be valid, it must be something beyond what the employee is already owed by law or contract. Earned but unpaid wages, accrued vacation pay under a company policy, and contractually vested benefits cannot serve as consideration for a new release of claims. The employer already owes you those things. The U.S. Equal Employment Opportunity Commission has been clear on this point: an employer cannot make payment of monies already owed conditional on signing a release, as detailed in federal regulations at 29 C.F.R. § 1625.22(d). The central truth is this: the more valuable the legal claims you hold, the more your signature on a release is worth to the employer — and the less adequate any standard, one-size-fits-all severance package is likely to be.
What You May Be Giving Up
The most important language in any severance agreement is the “release” clause. This is not boilerplate. It is the operative purpose of the document from the employer’s perspective. A typical general release requires you to waive any and all claims, known or unknown, that you may have against the employer. This includes a vast array of potential legal actions: claims of discrimination under federal law (Title VII, the Americans with Disabilities Act, and the Age Discrimination in Employment Act), as well as Connecticut’s own Fair Employment Practices Act under CGS § 46a-51 et seq.; wage and hour disputes under CGS § 31-71a et seq.; disputes over unpaid bonuses or the vesting of restricted stock units; claims of wrongful termination in violation of public policy; and claims of illegal retaliation. An employee who has been denied earned compensation, subjected to discriminatory conduct, or retaliated against for whistleblowing may hold claims worth far more than the severance offered. Signing a general release forfeits them entirely.
Rights That Cannot Be Waived
While an employer will draft a release to be as broad as possible, certain employee rights cannot be legally waived, regardless of what the agreement says. The employer cannot buy these rights from you. First and foremost, you can never waive your right to file a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) or the Connecticut Commission on Human Rights and Opportunities (CHRO). Under CGS § 46a-82 and 29 C.F.R. § 1625.22(i)(2), any provision purporting to prohibit you from communicating with or participating in an investigation by these agencies is void as a matter of law. Similarly, rights to minimum wage and overtime under the Fair Labor Standards Act cannot be privately waived without approval from a court or the Department of Labor. Under Cheeks v. Freeport Pancake House, 796 F.3d 199 (2d Cir. 2015), private FLSA settlements that attempt to waive these rights without judicial or agency review are unenforceable. You also cannot waive rights to vested pension or retirement benefits under ERISA, your right to file for workers’ compensation, or claims that arise from events occurring after you sign the agreement. Any provision that purports to waive these rights is unenforceable, and an agreement containing such a provision does not become valid merely because you signed it.
If You Are 40 or Older, Federal Law Imposes Strict Requirements
For employees aged 40 and over, Congress enacted specific procedural protections. The Older Workers Benefit Protection Act (OWBPA), codified at 29 U.S.C. § 626(f), mandates that any release of claims under the Age Discrimination in Employment Act (ADEA) must satisfy seven strict minimum requirements to be considered “knowing and voluntary.” The waiver must be: (1) written in plain, understandable language; (2) specifically reference the ADEA by name; (3) not waive claims that arise after the signing date; (4) be supported by consideration beyond what the employee is already entitled to; (5) advise the employee in writing to consult with an attorney before signing; (6) provide the employee at least 21 days to consider the agreement — or 45 days if the separation is part of a group layoff involving two or more employees; and (7) provide a 7-day period after signing during which the employee may revoke the agreement. This revocation period is absolute. It cannot be waived or shortened by agreement of the parties. As the Supreme Court held in Oubre v. Entergy Operations, Inc., 522 U.S. 422 (1998), a waiver that fails any of these requirements is void and unenforceable as to the age claim. The employer cannot cure a defective waiver after the fact through supplemental correspondence. If your employer pressures you to sign in fewer than 21 days, that pressure is unlawful.
In a group layoff of two or more employees, the OWBPA imposes an additional disclosure obligation. The employer must provide a written identification of the “decisional unit” — the job titles and ages of all employees selected and not selected for the program — as required by 29 U.S.C. § 626(f)(1)(H). Failure to provide this disclosure renders the age waiver void, regardless of whether the employee has already signed the agreement and received severance. This requirement is not a technicality. It exists so that employees in a group reduction can assess whether the selection process targeted older workers. An employer that cannot or will not provide it has forfeited the waiver.
Whether the Offer Is Adequate
This is the central practical question for any employee. A $5,000 payment in exchange for releasing a potential claim worth $200,000 is not a tradeoff — it is a transaction structured entirely to benefit the employer. Before assessing what you are getting, you must first calculate what you are giving up. This analysis requires a review of potential unpaid wages or bonuses, the value of any disputed RSU or equity vesting, the strength of any discrimination or retaliation claims, the projected cost of litigation, and the realistic risk of an adverse outcome at trial. None of this analysis is possible without a thorough legal review of the facts of your employment and the circumstances of your termination. You can be certain the employer’s counsel conducted this analysis before extending the offer. Your own counsel should, too. An attorney who reviews a severance agreement without first assessing the potential value of the claims being released has not done the job.
What Is Negotiable
An employer may present a severance agreement as a take-it-or-leave-it ultimatum. It is almost never that. The fact that the employer is offering any consideration at all reflects a calculation that a signed release is worth obtaining. That calculation gives you leverage. Nearly every material term is subject to negotiation: the amount of severance pay, the duration of health benefits continuation, the scope and mutuality of non-disparagement provisions, the terms of any non-compete or non-solicitation clauses, the language of future employment references, the treatment of unvested equity, and the official characterization of the separation itself. Whether a separation is recorded as voluntary or involuntary can affect eligibility for unemployment benefits under Connecticut law. The employer has a clear incentive to reach a final, binding agreement. The employee has leverage, whether or not either party has yet identified it.
Conclusion
A severance agreement is a final, permanent alteration of your legal position. It was not drafted to protect you; it was drafted to protect your employer. No standard form agreement is designed with your specific claims, damages, or circumstances in mind. Before you sign anything that extinguishes your legal rights, have the document reviewed by a Connecticut employment attorney who can identify what you are giving up, whether the consideration offered is adequate, whether there are defects in the release that render it unenforceable, and what terms you should negotiate or decline to accept. Polauf Law LLC represents employees throughout Connecticut in the review and negotiation of separation agreements. If you have been presented with a severance agreement, contact the firm for a consultation before your deadline to sign.