Don’t Offer Severance Without an Agreement Releasing Potential Claims

I continue to see instances in which an employee was terminated, and the employer paid some amount in severance, but did not get a signed severance agreement.

The purpose behind a severance agreement is to allow a terminated employee the option to receive some payout (money to which the employee is not already owed) in exchange for waiving employment claims. A signed severance agreement protects employers against most claims that could be brought by a former employee. These waivers are typically the purpose of a severance payment.

Without a signed severance agreement, the severance money is just a gift, nothing more.