Common Mistakes When Signing a General Release
If you’ve recently left a job or are about to, you may have been asked to sign a general release as part of your separation paperwork. Whether it’s called a release of claims, a severance agreement, or a waiver, these documents are legally binding contracts. They usually involve the employee agreeing not to sue the employer in exchange for some benefit, often money or extended health benefits. Many employees sign these agreements without fully understanding their rights or the consequences. There are many common mistakes people make when signing a general release.
People Fail to Read the Document Carefully
It sounds obvious, but this is the most frequent misstep. General releases are often filled with dense legal language, and it’s easy to skim through without grasping the meaning of each clause. A single sentence buried in fine print can have huge implications. For example, you might be waiving your right to file a lawsuit, a claim with the EEOC, or even your ability to work in your industry for a set period of time. Before signing anything, read every word, and don’t assume the document only contains what was verbally discussed. If there’s anything you don’t understand, ask for clarification or seek legal advice.
People Assume They Must Sign Away Rights
Many employees feel pressured to sign a general release immediately, especially when the employer sets a deadline. Under federal law, employees who are 40 or older must be given at least 21 days to consider a release that waives age discrimination claims under the Age Discrimination in Employment Act (ADEA). In group layoffs, this period may extend to 45 days. Regardless of age, asking for time to review the agreement or consult an attorney is reasonable. Don’t let urgency push you into a hasty decision that could cost you important rights.
People Do Not Negotiate Terms
Just because an employer presents a release as a standard document doesn’t mean the terms are non-negotiable. Severance packages, non-disparagement clauses, and post-employment restrictions like non-competes or confidentiality agreements are often open to negotiation. Too many employees assume they have no leverage and accept the first offer without question. But you may be able to negotiate more favorable terms, especially if you were a long-term employee, are part of a protected class, or have potential legal claims. At a minimum, ask if there’s room for improvement in the severance amount or other benefits.
People Overlooking What They’re Giving Up
When you sign a general release, you usually give up the right to bring any legal claim, whether known or unknown, against your employer. This could include discrimination, harassment, retaliation, unpaid wages, wrongful termination, or other labor law violations. Many employees don’t realize that even if they later discover evidence of illegal conduct by the employer, they may be barred from taking legal action if they’ve signed a release. Before signing, consider whether you’ve experienced unfair treatment or suspect your rights may have been violated. Talk to a lawyer if you’re unsure.
People Ignore Non-Disparagement or Confidentiality Clauses
It’s common for general releases to include language prohibiting employees from making negative statements about the company, sharing details about their employment, or the agreement itself. These clauses can be vague, overly broad, or even unenforceable, but signing them could expose you to legal risk. Consider whether the agreement will prevent you from speaking about a toxic work environment. Could it interfere with future job interviews or your ability to explain a job gap?
People Assume Future Claims Are Covered
A general release typically covers claims that occurred up to the date of signing but not claims that arise afterward. Some agreements are worded in a way that seem to waive future rights, which could be problematic. You should never give up rights related to future injuries, discrimination, or legal violations that haven’t yet occurred. Look for language about future claims and question whether the release goes too far.
People Sign Without Understanding the Tax Implications
Severance pay is usually taxable, and how it’s structured could affect your unemployment benefits or tax liability. Some agreements may include a lump sum payment, while others spread payments over time. You should also be cautious about any clauses requiring you to reimburse the company for taxes or agree to indemnify them if there’s an IRS dispute later. If you’re unsure how severance or other payments will affect your finances, talk to a tax professional before signing.
People Trust Verbal Promises Not Included in the Agreement
If your employer made any promises, like helping you with job placement, continuing benefits beyond what’s written, or not contesting your unemployment application, make sure they’re in writing. If it’s not in the document, it’s not enforceable. Verbal promises are not legally binding unless incorporated into the agreement. Don’t rely on goodwill or memory; get it in writing.
People Skip Getting Legal Advice When They Need It Most
Many employees don’t consult a lawyer because they’re worried about cost or think their situation is straightforward. But signing away your legal rights is no small thing. A short consultation could save you thousands of dollars, especially if there’s any hint of discrimination, harassment, retaliation, or potential lawsuits. This option may be worth exploring, especially if something in the release feels off or too one-sided.
Know Your Rights Before You Sign Anything
Before you agree to any general release, severance agreement, or waiver of claims, let Atlas Law Center review it. You may be entitled to more money, better terms, or legal protections your employer isn’t telling you about. Contact us today at 331-321-4748 to schedule a free consultation. Your employer has lawyers. You should, too.
