The HR conversation usually ends the same way. A folder slides across the table, the employee is told to take it home and decide by Friday, and the room empties. The folder contains a severance agreement. Most workers read the dollar figure on page one, glance at the rest, and sign. The wrongful termination lawyers Dallas employees consult after firing see those signed agreements all the time, and the consultation often ends with the same realization: the document was worth more than the offer on the page, and the leverage is gone now.
A severance agreement is a contract. Once signed, it generally cannot be undone. A few hours spent reading carefully, ideally with counsel, can make a meaningful difference.
What You Are Actually Being Asked to Sign
Severance agreements are not gifts. The employer is paying for something specific, almost always a release of claims. The release language is the part of the document that matters most.
A typical release will say something like: the employee releases the employer from any and all claims, known or unknown, arising out of or related to the employment relationship. The breadth is intentional. Once signed, the employee usually cannot bring a discrimination claim, a retaliation claim, an FMLA claim, a wage claim, or any of the dozens of other potential causes of action.
Texas courts enforce these releases broadly when the language is clear and the consideration is real. The Fifth Circuit has consistently rejected attempts to walk back signed releases absent fraud or duress, neither of which is easy to prove.
OWBPA Requirements for Workers Over 40
The Older Workers Benefit Protection Act adds requirements that employers sometimes miss. Any release that purports to waive claims under the Age Discrimination in Employment Act has to satisfy specific statutory rules.
The requirements include:
- The release must be written in plain language the employee can understand
- The release must specifically reference ADEA rights
- The employee must be advised in writing to consult with an attorney
- The employee must be given at least 21 days to consider the agreement (45 days if the termination is part of a group layoff or exit incentive program)
- The employee must have 7 days after signing to revoke the agreement
- The agreement cannot waive rights or claims that arise after the date of signing
- In group terminations, the employer must provide statistical information about the ages and job titles of those selected for termination and those retained
A release that fails any of these requirements is invalid as to ADEA claims. The employee can keep the severance money and still pursue the age discrimination claim, a remedy the Supreme Court confirmed in Oubre v. Entergy Operations, Inc., 522 U.S. 422 (1998).
Employers in Dallas-area group layoffs sometimes provide the statistical disclosures in a way that is technically compliant but practically useless. A careful reading of those numbers occasionally reveals an age-skewed selection pattern that supports a separate claim.
Non-Disparagement and Confidentiality Clauses
Most severance agreements include a non-disparagement clause prohibiting the employee from making negative statements about the employer. They also include confidentiality clauses prohibiting disclosure of the agreement itself or, sometimes, the underlying circumstances.
These clauses are enforceable in Texas, but they have real limits. They cannot bar an employee from filing an EEOC charge, cooperating with a government investigation, or testifying truthfully under subpoena. Language that purports to do so is unenforceable, and the EEOC has taken the position that such language can itself be a violation.
Two recent federal developments have narrowed what employers can require:
The Speak Out Act, signed into federal law in December 2022, makes pre-dispute non-disclosure and non-disparagement clauses unenforceable when they cover claims of sexual assault or sexual harassment. A separation agreement signed after the dispute arises is not affected, but pre-dispute confidentiality language that tries to silence harassment victims will not hold up.
The Speak Out Act builds on the earlier Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, which allows employees to opt out of pre-dispute arbitration agreements for sexual harassment and assault claims even after signing.
Outside the sexual harassment context, broad confidentiality clauses remain common and largely enforceable, though they should still be read carefully for unintended consequences.
Non-Compete and Non-Solicit Provisions Slipped Into Severance
Severance agreements sometimes include or reaffirm restrictive covenants. A non-compete signed at the start of employment may be of doubtful enforceability under Texas Business and Commerce Code Section 15.50. The severance agreement is a separate contract, with separate consideration, and tightening the language at this stage can revive a covenant that would otherwise have been hard to enforce.
The same goes for non-solicitation clauses covering customers, employees, or both. A standard six-month non-solicit that was a footnote at hiring can become a significant constraint when packaged with a severance check.
Read these clauses carefully. They are negotiable, particularly when the employer wants the release more than the employee wants the money.
When the Agreement Is Worth More Than the Offer
The offer on the page is the starting point, not the ceiling. Several factors push the actual settlement value of a release higher than the initial number:
- The employer has potential exposure on discrimination, retaliation, or FMLA claims and prefers a release to litigation
- The employee has documented evidence of mistreatment that the employer would rather not see in an EEOC charge
- The employee is over 40 and the termination is part of a group reduction with potential ADEA exposure
- The employee was on protected leave or had recently engaged in protected activity
- The employer values speed and confidentiality enough to pay for it
Counsel can usually tell within an initial review whether the offered amount represents a serious effort or a placeholder. A short negotiation often produces additional severance, an extended benefits period, a neutral reference, removal of restrictive covenants, or all of the above.
Time Limits That Quietly Run
The 21-day and 45-day consideration periods under the OWBPA are minimums. Employers can offer longer windows. Outside the over-40 context, Texas law does not require any specific consideration period, which is why many agreements ask for signature in a few days.
Independent of the agreement itself, the underlying claims have their own deadlines: 180 days to the TWC, 300 days to the EEOC, two years for Sabine Pilot, two to three years for FMLA. Signing a release does not toll those deadlines. Not signing does not extend them either.
Talk to Wrongful Termination Lawyers Dallas Workers Rely On Before You Sign
A severance agreement reviewed before signature costs a fraction of what an unsigned, mishandled claim costs after the fact. The wrongful termination lawyers Dallas employees consult will read the release, identify what is being given up, evaluate whether the underlying facts support a stronger negotiating position, and tell you whether the offered amount reflects your actual leverage. The window for that review is short. Once the signature page is signed, the conversation changes.
