What red flags should I look for in a severance agreement before I sign?
The short answer
Certain clause patterns in severance agreements warrant closer attention before signing: a release so broad it appears to cover unknown or future claims; a non-compete that would meaningfully restrict your next role; a non-disparagement clause with no mutuality or exceptions; clawback provisions that could recoup the severance under vague conditions; and missing carve-outs for EEOC filing rights or government agency cooperation. None of these automatically make an agreement unacceptable — but each is worth understanding and, in many cases, worth asking about or pushing back on. Scan your agreement to identify which of these patterns appear in yours before the consideration period closes.
What Dang reviews here: Dang reviews the clause language in your severance agreement — what the release, non-compete, non-disparagement, clawback, and arbitration terms say and what to ask about them. It does not verify wage, hour, or leave compliance.
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What patterns commonly draw attention in severance agreements
A release of claims written in catch-all language — "any and all claims, known or unknown, from the beginning of time" — is broader than needed to protect the employer from the specific departure at hand. A non-compete clause that follows you into severance, with the same geographic and activity scope as your employment agreement, can meaningfully limit your options for months or years after you sign. A cooperation clause requiring you to assist the employer in future litigation indefinitely is another provision that appears occasionally and warrants scrutiny.
Missing clauses are red flags too: the absence of a COBRA subsidy when others in similar roles received one, no equity treatment when unvested options exist, or a one-sided non-disparagement with no carve-out for government agencies or truthful statements. A clawback provision — one that allows the employer to reclaim some or all of the severance if you breach any agreement term — deserves a close read on what triggers it and how it works.
Why people worry
Severance agreements are typically drafted by the employer's counsel and favor the employer's interests. Workers under time pressure often sign without identifying provisions that will affect them for years — a broad non-compete, an indefinite non-disparagement restriction, or a clawback tied to a vague "breach" definition. Knowing what to look for is the first step toward asking the right questions.
What to look for in your agreement
- Release language covering unknown claims or extending well beyond the employment relationship.
- A non-compete or non-solicitation clause that would limit your next role, with no geographic or temporal limits.
- A clawback or repayment provision — what triggers it, and how broadly "breach" is defined.
- Non-disparagement with no mutuality and no carve-out for government agencies or legal proceedings.
- A cooperation clause with no time limit or compensation requirement for your future time.
Questions to ask before signing
- Ask the employer to clarify what specific conduct would trigger the clawback or repayment provision.
- Ask the other party to confirm whether the non-compete was intended to survive termination and apply post-separation.
- Confirm whether any government-agency cooperation carve-out exists in the non-disparagement clause.
- Consider having the agreement reviewed if two or more of these patterns appear in the same document.
Why scan instead of guess
The general rule tells you the baseline. Your offer tells you what you’re actually being asked to sign — and the wording is what binds. Dang reads the document and flags the clauses worth reviewing, in plain English.
The deterministic engine scores and decides what’s risky. The AI only enriches the plain-English wording — AI extracts, code decides, never the other way around.
Your original file is deleted promptly after processing — we keep only the report you can read. No account needed for a one-time scan. Free preview first; full report $6.99, one-time.
Common questions
Is a broad release language always a problem?
Broad release language is common in employer-drafted agreements and does not automatically make the agreement unacceptable. What matters is whether the scope covers claims you believe you have and want to preserve — that is the judgment the language requires you to make.
What is a clawback clause and when does it apply?
A clawback provision allows the employer to recover some or all of the severance paid if you breach the agreement — typically defined as violating the non-compete, non-disparagement, or confidentiality terms. The definition of "breach" and the recovery mechanism are in the clause language and worth reading carefully.
No account required · File deleted after analysis · Not legal advice. Dang reports contract findings in plain English — general information, not legal advice about your situation. For consequential decisions, consult a licensed attorney in your state.