Can You Still Sue After Signing a Severance Agreement?

Getting let go from a job is hard enough. When your employer hands you a severance agreement, it can be tempting to sign quickly — especially if you’re offered a few weeks’ pay or extended benefits. But before you put pen to paper, there’s one big question you should be asking:

Can I still sue if I sign this?

The short answer? Sometimes. It all depends on what’s in that agreement, and whether it’s legally enforceable under New Jersey law. In this article, we’ll break down what severance agreements usually include, when signing one might affect your right to sue, and why speaking to an attorney could make a big difference in protecting your future.

What Is a Severance Agreement?

A severance agreement is a legal contract between you and your employer that lays out the terms of your exit. Most often, the employer offers something of value, like severance pay, health insurance continuation, or help finding a new job — in exchange for something they want: your signature on a waiver or release of legal claims.

It’s a trade. And that trade may come with strings attached.

These agreements are common in layoffs, corporate restructuring, or when an employer is trying to minimize legal risk. But just because the agreement looks standard doesn’t mean you should take it lightly.

What You Might Be Giving Up

When you sign a severance agreement, you might be signing away your right to:

• Sue for wrongful termination
• File a discrimination or harassment claim
• Pursue retaliation complaints
• Claim unpaid wages or overtime
• Blow the whistle on unlawful activity

In most cases, the agreement will include a “general release of claims,” which means you agree not to bring certain lawsuits against the employer, especially those related to your employment or termination.

In New Jersey, courts will often uphold these waivers as long as they’re clear, voluntary, and not against public policy. So yes, you may be giving up your right to sue when you sign. But there are exceptions.

When You Can Still Sue After Signing

Even if you’ve already signed a severance agreement, you may still have legal options—especially if the agreement itself wasn’t valid or enforceable. Here are a few scenarios where lawsuits may still be possible:

1. The Agreement Was Signed Under Pressure

If your employer gave you an ultimatum — “Sign this by tomorrow or you get nothing” — that could be considered duress. Similarly, if they rushed you or denied you time to review the agreement, that might invalidate your signature.

Under federal and New Jersey law, certain workers (like those over 40) must be given a minimum of 21 days to review a severance agreement, plus 7 days to revoke it. If that didn’t happen, the agreement may not hold up.

2. The Language Is Too Vague or Confusing

Courts won’t enforce agreements that are so unclear or legalistic that the average person couldn’t understand them. If the waiver of rights was buried in fine print or written in complex legal jargon, it may be challengeable.

New Jersey courts require that any waiver of legal rights be “knowing and voluntary.” If it wasn’t, it may not be enforceable.

3. You’re Suing for Something That Happened After You Signed

A severance agreement usually covers claims up until the date you sign. It does not apply to things your employer does afterward — like defamation, retaliation, or violating the terms of the agreement itself.

So if you signed the agreement and were then bad-mouthed to future employers or denied severance payments that were promised, you could still have a valid claim.

4. The Agreement Tries to Waive Rights It Can’t

It’s important to understand that not every part of a severance agreement is enforceable. In some cases, you simply can’t waive legal rights in NJ, even if you sign a document that says otherwise.

In most situations, signing a severance agreement means you’re giving up your right to sue your employer — even if they did something illegal. In 2024 alone, the EEOC received over 88,000 complaints related to workplace discrimination. What many people don’t realize is that by signing this agreement, they may be giving up the chance to file or move forward with those kinds of claims.

However, some rights can’t legally be waived. For example, in New Jersey, you can’t be prevented from filing a charge with the Equal Employment Opportunity Commission (EEOC) or participating in an investigation. Likewise, some whistleblower rights under the Conscientious Employee Protection Act (CEPA) cannot be waived.

Even if you signed something that says you won’t report misconduct, that clause may not be enforceable.

Common Red Flags in Severance Agreements

If you’re reviewing a severance package or already signed one — watch out for these common clauses that may affect your rights:

• Non-disparagement clauses: Prevent you from saying anything negative about the company. Sometimes mutual, sometimes not.
• Confidentiality provisions: Limit what you can share about the agreement itself or your employment experience.
• Non-compete or non-solicit language: Restrict your ability to work in your industry after you leave.
• Broad release of claims: May include claims you haven’t even thought of or discussed.

These clauses aren’t necessarily illegal, but they can have serious consequences. That’s why you should never feel pressured to sign on the spot.

Why You Should Talk to a Lawyer First

Even if the severance deal seems straightforward or generous, it’s worth having a severance agreement attorney in New Jersey look it over before you commit. Here’s why:

• You may be entitled to more. Sometimes employers offer less than what you’re legally owed in wages, unused vacation, or final paycheck.
• You may have a valid claim. If you were fired due to discrimination, retaliation, or another unlawful reason, you may be giving up the right to real compensation.
• You may be signing restrictions. That “standard” agreement could limit your ability to work, speak out, or challenge future mistreatment.

A lawyer can help you understand what you’re signing and negotiate better terms, if needed. In many cases, the employer expects this, and already has built some wiggle room into the agreement.

Real-World Example

Let’s say you’re let go after raising concerns about unsafe work conditions. The employer offers you three weeks’ severance in exchange for a signed waiver of claims.

Before signing, you speak with an attorney who finds that your termination may violate New Jersey’s CEPA whistleblower protections. With legal help, you may be able to negotiate a larger settlement — or even pursue a lawsuit for wrongful termination.

Without legal review, you could’ve signed away that leverage for a quick payout.

Take Your Time, Know Your Rights

A severance agreement is a contract that can affect your legal future. Don’t assume the first offer is the best one — or that it’s safe to sign without a second look.

If you’ve already signed, you might still have legal options, especially if something feels off.

Think Twice Before You Sign

If you’re unsure about what’s in your severance agreement — or if you’ve already signed and now have second thoughts — our experienced team of severance agreement lawyers in New Jersey can help.

We’ll walk you through your rights, help you understand what the contract really means, and make sure you’re not giving up more than you’re getting.

Protect your future before it’s too late. Contact us today for a free review of your severance package.