Estimated reading time: 18 minutes

Key Takeaways

• Insist that any severance non-disparagement clause be mutual, limited to knowingly false statements, and include clear legal carveouts.

• Get neutral reference severance language that directs all references to HR and limits responses to dates, title, and eligibility for rehire.

• Clarify the severance rehire clause up front; if the employer wants a bar, seek a time limit or a future right to apply.

• Preserve your legal rights with explicit carveouts for future claims and statutory severance release exceptions (EEOC filings, OWBPA, OSHA, wages, ERISA benefits, unemployment/workers’ comp).

• Negotiate severance language methodically: prepare your redlines, request 48–72 hours to review, and confirm every change appears in the final document.

• Consult employment counsel when the agreement is complex, includes broad waivers or perpetual clauses, or involves significant money or reputational risk.

Table of Contents

• Introduction

• At-a-Glance TL;DR

• What Is a Severance Agreement and Why It Matters

• Severance Non-Disparagement Clause: Deep Dive

• Neutral Reference Severance

• Severance Rehire Clause

• Carveouts for Future Claims

• Severance Release Exceptions: What to Watch For

• Step-by-Step Negotiation Playbook

• Practical Scripts & Redline Examples

• When to Consult an Employment Attorney

• Sample Checklist to Review Before Signing

• Real-World Examples & Short Case Studies

• Conclusion

• FAQ

• Can I talk to prospective employers about why I left if I signed a non-disparagement clause?

• Will a signed release prevent me from filing an EEOC charge?

• What happens if my former employer gives a bad reference despite a neutral-reference clause?

• How long should non-disparagement/neutral reference provisions last?

Introduction

A severance non-disparagement clause can decide what you are allowed to say about your former employer after you leave, so it is one of the most important provisions to negotiate and get right. This guide is a tactical, step-by-step how-to to help you negotiate severance language that protects your reputation, preserves legal rights, and supports future job prospects, including a strong neutral reference severance clause.

Severance agreements are contracts that shape your transition and future options, not just your final paycheck. Employers use them to wrap up employment and minimize risk, while employees use them to secure pay, benefits, references, and fair terms. For an overview of how these agreements work in practice, see SHRM’s guidance on severance agreements and Nolo’s plain-English overview of severance agreements and releases. Below, you’ll find model clause language, negotiation edits, scripts you can adapt, and a line-by-line checklist to use before you sign.

At-a-Glance TL;DR

• Push for a mutual severance non-disparagement clause limited to knowingly false statements, with explicit legal carveouts.

• Lock in neutral reference severance language that directs reference checks to HR and limits responses to title, dates, and rehire eligibility.

• Address the severance rehire clause clearly; resist permanent no-rehire unless time-limited and acceptable.

• Demand carveouts for future claims: agency filings, whistleblower rights, OWBPA/ADEA, wage claims, vested benefits, and workers’ comp/unemployment.

• Use severance release exceptions to preserve rights that cannot legally be waived and claims arising after signing.

• Prepare redlines in writing, request 48–72 hours to review, and consult counsel before you negotiate severance language on high-stakes terms.

What Is a Severance Agreement and Why It Matters

A severance agreement is a written contract executed at separation that typically provides compensation or benefits in exchange for a release of claims and other post-employment obligations. In plain language, you receive money or benefits, and in return you agree to certain promises that affect what you can do and say after you leave.

Typical components include severance pay, continuation of benefits (like COBRA), confidentiality and non-disparagement, reference language, release of claims, and rehire or eligibility language. For an employer’s view of common components and pitfalls, see SHRM’s severance overview, and for an employee-focused explainer of releases and what you may be giving up, review Nolo’s severance releases guide.

When terms are overbroad, you can lose significant legal rights, face speech limits that silence whistleblowing, and risk negative or off-script references that harm your job search. That is why it’s critical to negotiate severance language carefully and insist on severance release exceptions that preserve non-waivable and future claims. If you want a line-by-line orientation before you start, this severance agreement review guide breaks down key clauses and red flags.

Severance Non-Disparagement Clause: Deep Dive

A severance non-disparagement clause is a contractual promise by one or both parties not to make false, negative, or derogatory statements about the other following separation. Many standard forms bind only the employee, which can expose you to unbalanced reputational risks if the company or its executives speak negatively about you.

Scope matters. One-sided clauses are common, but mutual promises are fairer and reduce reputational harm on both sides. Employers typically want to prevent harmful or defamatory statements; employees want to protect the ability to speak truthfully, participate in legal processes, and blow the whistle on unlawful conduct. For a practical overview of how these clauses work and why overbreadth is risky, see Nolo’s explainer on non-disparagement clauses. For context on handling references and language choices, compare SHRM’s severance guidance.

Examples and commentary:

• Example A (overbroad — avoid): “Employee shall not make any disparaging statements regarding the Company, its products, officers, directors, employees, or affiliates, in any form, worldwide, in perpetuity.” This sweeps too broadly; phrases like “in any form,” “worldwide,” and “in perpetuity” can chill truthful speech, lawful whistleblowing, and participation in legal processes.

• Example B (balanced/negotiable): “Employee agrees not to make false, malicious, or knowingly untrue disparaging statements about the Company’s officers, directors, products or services, except as required by law, to any governmental agency, or in response to a subpoena.” This narrows the restriction to knowingly false statements and preserves lawful processes.

• Example C (employee-friendly mutual + carveouts): “The Company and Employee each agree not to make, publish or communicate any statement that is false and disparaging of the other’s business reputation, provided that nothing in this agreement shall prevent either party from making truthful statements required by law, participating in governmental investigations, reporting unlawful conduct, or pursuing any claims that are carved out under Section X.” This version is mutual, bounded, and expressly preserves legal rights.

Precise negotiation edits you can request (and copy into a redline):

• Replace “disparaging” with “false and disparaging” to preserve truthful statements.

• Add carveouts: “except for truthful statements made in litigation, to governmental authorities, or as required by law.”

• Add mutuality: “This clause is mutual and binds both the Company and the Employee.”

• Limit time/scope: “for a period of 12 months following the Separation Date” rather than “in perpetuity”; consider limiting who is covered (e.g., officers/directors) rather than every affiliate worldwide.

Quick script to request changes: “I’m comfortable with a non-disparagement provision if it’s mutual, limited to knowingly false statements, and expressly carved out for legal processes and whistleblower reports. Can we add those edits?”

Enforcement and employer concerns. Employers seek to protect reputation and prevent defamation; employees need the freedom to tell the truth, file agency charges, and report safety or legal violations. The proportional approach above balances both interests while keeping risk low for both parties. For broader severance strategy and alternatives if an employer resists fair edits, see this in-depth severance agreement review resource.

Neutral Reference Severance

Neutral reference severance language is a clause requiring the employer to provide only basic, factual information (employment dates, job title, sometimes salary) in response to reference inquiries. This prevents opinionated, negative comments and reduces the risk of back-channel retaliation.

Benefits to the employee include fewer negative surprises, consistent messaging across background checks, and a smoother job search. HR best practices often favor neutral references; see SHRM’s guidance on neutral references and best practices. For how this fits with releases and severance terms, review Nolo’s releases overview.

Sample clauses you can propose:

• Standard neutral: “Upon request from a prospective employer, the Company will provide only the Employee’s dates of employment and job title.”

• Enhanced neutral (with written confirmation): “The Company agrees that all reference requests will be handled by HR and limited to dates of employment, job title, and confirmation of eligibility for rehire; upon Employee’s request, Company will provide written confirmation of this policy to prospective employers.”

Negotiation tips:

• Designate HR or a named contact to handle all references and require adherence to the neutral policy.

• Request a one-page written confirmation you can share with recruiters and future employers.

• Add a remedy if the clause is violated (for example, liquidated damages or fee-shifting in dispute resolution). If a bad reference still occurs, learn about proving and pursuing a bad reference lawsuit or broader defamation remedies.

Short script: “To support my job search, I’d like neutral reference language that routes all inquiries to HR and limits responses to dates, title, and rehire eligibility, with a written confirmation I can provide to recruiters.”

Severance Rehire Clause

A severance rehire clause sets whether you are eligible for rehire and on what terms. This can affect access to future roles, internal postings, and treatment under company policies and benefit plans. When the agreement is silent, it creates ambiguity and can trigger inconsistent responses from different departments later.

Sample options and tradeoffs:

• No prohibition (employee-friendly): “Nothing in this Agreement shall be deemed to prohibit the Company from considering Employee for rehire; Employee remains eligible for rehire subject to standard hiring processes.”

• Conditional rehire (compromise): “Employee may be considered for rehire after a six-month cooling-off period and is subject to the Company’s standard hiring procedures.”

• Express bar (employer-favorable): “Employee is not eligible for rehire.” Resist a permanent bar unless you are sure it will not harm your career; if unavoidable, request a limited duration or a right to apply after a set time.

Ask for clarity rather than silence. Employers often include rehire language to reduce perceived risk; employees should make sure the clause says exactly what it means. For broader context on severance terms, compare SHRM’s severance discussion with Nolo’s guidance.

Carveouts for Future Claims

Carveouts for future claims are specific exceptions in a general release preserving your right to pursue certain claims despite signing the overall release. Without these, you may unintentionally waive important rights.

Core carveouts to request (with sample language):

• Governmental/administrative claims (EEOC and similar): “This release does not preclude Employee from filing a charge or complaint with, or providing information to, any governmental agency, including the EEOC.” You can file, but individual monetary relief might be waived by the release unless prohibited by law; see the EEOC’s page on how to file a charge and its retaliation protections.

• Age discrimination/OWBPA: “Notwithstanding anything to the contrary, the Employee does not waive rights or claims that cannot be waived under the Older Workers Benefit Protection Act (OWBPA).” See the DOJ’s OWBPA overview for waiver requirements.

• Whistleblower/retaliation protections: “This agreement does not waive Employee’s rights to report unlawful conduct or to receive whistleblower protection under applicable law (including OSHA and other federal/state whistleblower statutes).” Learn more at Whistleblowers.gov and OSHA’s whistleblower program.

• Workers’ compensation and unemployment: “Claims for workers’ compensation and unemployment benefits are not waived.”

• Vested benefits/ERISA: “Claims for vested benefits under any ERISA plan are preserved.” For retirement benefit basics, see the DOL’s retirement resources.

• Wage and hour/unpaid wages: “This release does not waive Employee’s rights to recover unpaid wages or overtime under the Fair Labor Standards Act or state wage-payment laws.” For wage and hour enforcement, see the DOL’s Wage and Hour Division.

Drafting tips:

• Use explicit affirmative language (“does not waive,” “is excepted”). Avoid ambiguous phrasing.

• Reference the statute by name when applicable (OWBPA, FLSA, ERISA) and make clear that cooperation with government investigations remains protected.

• Acknowledge that administrative filings may be permitted even if individual monetary relief is waived—your counsel should assess jurisdictional nuances.

Negotiation script: “I need standard carveouts confirming my rights to file with government agencies, preserve non-waivable OWBPA/ERISA rights, report safety or legal concerns, and pursue unpaid wages. If helpful, I can narrow categories, but blanket waivers are not acceptable.”

Severance Release Exceptions: What to Watch For

Severance release exceptions are specific rights or claims expressly excluded from the general release language so they survive the release. They keep you from accidentally giving up non-waivable rights or claims that arise after you sign.

Checklist of must-have exceptions (with brief reasons):

• Claims that cannot be waived by law: Some statutes limit waiver; naming them reduces risk. See the OWBPA for age claims and DOL/EEOC resources for others.

• Claims arising after execution: Preserve future claims for acts occurring after you sign—your release should cover only past conduct.

• Governmental claims/cooperation: Maintain your right to file with or cooperate with agencies such as the EEOC.

• Workers’ comp/unemployment/vested benefits: These benefits often cannot be waived; see the DOL on retirement/ERISA.

• ADEA claims unless OWBPA rules are met: Age releases must follow OWBPA’s “knowing and voluntary” requirements.

How release and exceptions work together. A general release usually covers “all claims known or unknown through the date of signing.” You then enumerate exceptions. For a plain-language discussion of release scope and risks, see Nolo’s severance release guide.

Sample general release + exceptions block:

“Employee releases and forever discharges the Company from any and all claims, demands, liabilities, and causes of action of any kind, whether known or unknown, arising out of or relating to Employee’s employment or separation through the Effective Date, except that this release does not waive: (i) claims that cannot be waived by law, including rights preserved under the OWBPA; (ii) claims arising after the Effective Date; (iii) the right to file charges or participate in investigations with government agencies (including the EEOC) and to provide truthful testimony; (iv) claims for workers’ compensation or unemployment benefits; (v) claims to vested benefits under ERISA-governed plans; and (vi) claims for unpaid wages or overtime under the FLSA or applicable state law.”

Why this helps: it narrows the release to the past, preserves legally protected rights, and aligns with agency-cooperation rules while still giving the employer the closure it seeks.

Step-by-Step Negotiation Playbook

Use this simple, chronological plan to negotiate severance language efficiently and respectfully.

Step 0 — Preparation

• Gather key documents: offer/bonus letters, performance reviews, handbooks/policies, prior agreements (non-compete/NDA), and any emails on severance.

• Define must-haves (mutual non-disparagement; neutral reference; carveouts for future claims; severance release exceptions) versus nice-to-haves (extra weeks of pay, extended COBRA, outplacement).

• Timeline: request 48–72 hours to review and consult counsel. If age 40+, confirm OWBPA timeframes are honored. For additional perspective on strategy, see Nolo’s severance negotiation guide and SHRM’s severance overview.

Step 1 — Initial request/response

• Keep tone professional and non-accusatory. State that you’re aligned on a respectful separation and propose specific redlines for the severance non-disparagement clause, neutral reference severance, severance rehire clause, and carveouts.

• Attach a clean, consolidated redline so HR can quickly review.

• Provide short rationale (“to preserve legal rights and support job search while meeting the Company’s reputational concerns”).

Example email opener: “Thank you for sharing the agreement. I appreciate the Company’s efforts to make this transition smooth. I’ve attached a redline reflecting standard edits: mutual non-disparagement limited to knowingly false statements with legal carveouts; neutral reference handled by HR (dates/title/rehire); clarification on rehire eligibility; and standard release exceptions (EEOC/OWBPA/OSHA/ERISA/FLSA). I believe these align with common practice and should meet both sides’ interests.”

Step 2 — Counteroffers and tradeoffs

• Typical employer priorities: broad release and non-disparagement. Proposed trade: accept a reasonable non-disparagement duration (e.g., 12 months) in exchange for mutuality and carveouts.

• Bargaining chips: slightly longer pay; extended COBRA; outplacement services; training repayment waiver; or a neutral reference letter. If needed, consider a modest increase in severance in exchange for a broader release—paired with strong exceptions.

• Keep a written record of offers and counteroffers, and verify that the final draft reflects agreements reached. When in doubt, reference this severance review guide for a clause-by-clause check.

Step 3 — Finalizing documents

• Request a single, consolidated draft showing all changes. Confirm mutual non-disparagement, neutral reference terms, rehire language, and exceptions appear exactly as agreed.

• Verify payment amounts, timing, tax withholding, and benefits continuation; for tax variables, see severance tax implications and, for health coverage, COBRA continuation rights.

• Confirm the effective date, any rescission or revocation window (OWBPA typically requires a 7-day revocation period for ADEA releases), and the method of payment.

Step 4 — Post-signing considerations

• Store a signed PDF and calendar payment dates and any revocation or benefits deadlines. If you plan to apply for benefits, review how severance can affect unemployment benefits.

• If a violation occurs—like a non-neutral reference—document the details promptly and invoke the agreement’s remedies. In serious breaches, learn how to enforce a severance/settlement agreement.

Practical Scripts & Redline Examples

Use or adapt these short scripts and edits. They are examples, not legal advice.

1) Opening email to HR
“I appreciate the Company’s professionalism during this transition. I’ve proposed standard edits to ensure the agreement is balanced: mutual non-disparagement limited to knowingly false statements, neutral reference handled by HR (dates/title/rehire eligibility), clear rehire terms, and statutory carveouts. I’m confident these changes meet both sides’ interests.”

2) Request for non-disparagement carveouts
“I’m comfortable with a non-disparagement clause if mutual and limited to knowingly false statements, with express carveouts for truthful statements in legal proceedings, governmental filings (EEOC/OSHA), and whistleblower activity.”

3) Requesting neutral reference wording
“To support my job search, please add: ‘All references will be handled by HR and limited to dates of employment, job title, and eligibility for rehire, with written confirmation available upon request.’”

4) Negotiating rehire language
“I’m requesting a neutral provision: ‘Nothing in this Agreement prohibits the Company from considering Employee for rehire subject to standard processes.’ If the Company prefers a waiting period, I can accept a six-month window.”

5) Asking for counsel/declining to sign without review
“Thank you for the draft. I need 72 hours to review with counsel to ensure compliance with OWBPA and standard carveouts. I’ll revert with any edits by [date].”

Redline snippet A — Non-disparagement (before → after)
Before: “Employee shall not make any disparaging statements about Company or its affiliates in perpetuity.”
After: “Company and Employee shall not make any false and disparaging statements about the other’s business reputation for 12 months following the Separation Date; nothing herein prevents truthful statements required by law, participation in government investigations, whistleblower reports, or testimony under subpoena.”
Why: Adds mutuality, limits to knowingly false statements, defines a reasonable duration, and preserves lawful processes.

Redline snippet B — Neutral reference
Before: [Silent] — no reference policy stated.
After: “All reference requests shall be handled solely by HR and limited to dates of employment, job title, and eligibility for rehire; upon Employee’s request, Company will provide written confirmation of this policy to prospective employers.”
Why: Neutralizes risk of negative or off-script references and creates a usable confirmation.

Redline snippet C — Release exceptions
Before: “Employee releases all claims of any kind.”
After: “Employee releases all claims through the Effective Date, except (i) claims that cannot be waived by law (including OWBPA), (ii) claims arising after the Effective Date, (iii) the right to file charges or cooperate with government agencies (including the EEOC), (iv) workers’ comp and unemployment claims, (v) vested ERISA benefits, and (vi) unpaid wage/overtime claims under the FLSA or state law.”
Why: Preserves non-waivable rights and key protections recognized by agencies like the EEOC, DOL, and ERISA rules.

When to Consult an Employment Attorney

Clear triggers to hire counsel:

• Potential statutory claims (age/ADEA-OWBPA, disability/ADA, ERISA/benefits, FLSA/wages).

• Large severance amounts or restrictive clauses with lasting career impact (e.g., perpetual non-disparagement or broad confidentiality).

• Employer insists on releasing rights to file with agencies or refuses standard carveouts.

• Complex equity, bonus, or clawback issues (consider this executive agreement negotiation guide).

What counsel will do: Review/redline the agreement, identify non-waivable rights, ensure OWBPA compliance, propose alternative language, and negotiate on your behalf. For a broad overview of severance legal issues and when to get help, see Nolo’s guide, or explore attorney-selection resources from the American Bar Association. If you need a strategic overview of options, see this guide to employment law legal representation options.

Cost-management tips: Ask for a limited-scope review with a flat fee for redlines, use your own markup to focus attorney time on high-impact clauses, and batch changes into one consolidated draft to reduce back-and-forth.

Sample Checklist to Review Before Signing

• Is the non-disparagement clause mutual and carved out for legal processes? It should be limited to knowingly false statements, preserve whistleblowing and governmental cooperation, and set a reasonable duration; compare against Nolo’s non-disparagement guidance.

• Is there a neutral reference clause and who gives references? Direct references to HR and limit to basic facts; request written confirmation. If violated, understand bad reference legal options.

• Does the agreement prohibit rehire? If so, for how long? Prefer eligibility or a time-limited restriction; avoid permanent bars unless acceptable.

• Which claims are carved out and are statutory exceptions named? Confirm carveouts for agency filings (EEOC), OWBPA, whistleblower rights (OSHA), wages (FLSA), ERISA benefits, workers’ comp, and unemployment; see EEOC, Whistleblowers.gov, DOL Wage & Hour, and DOL retirement.

• Is the release limited by time/scope or overly broad? The release should cover past conduct only and include clear severance release exceptions.

• How and when is severance paid and when does the release become effective? Confirm amounts, tax withholding, timing, and revocation windows; review severance tax treatment.

• Are there deadlines to consider (review/revocation/effective date)? Calendar each deadline and ensure you have adequate time under applicable law (e.g., OWBPA).

• Are confidentiality or non-compete clauses present and reasonable? Narrow to true trade secrets and avoid broad, career-limiting restraints; see this non-compete enforceability guide.

• Do benefits and COBRA continuation align with your needs? Confirm election timing and costs; compare options with COBRA continuation rights.

• Will severance affect unemployment benefits? Structure payments thoughtfully; see severance and unemployment benefits for common pitfalls.

Real-World Examples & Short Case Studies

Scenario A — No carveouts, missed rights later
“R” signed a standard agreement with a one-sided, perpetual non-disparagement clause and no carveouts. Months later, “R” discovered evidence suggesting discrimination but faced hurdles because the release lacked severance release exceptions and OWBPA safeguards. With carveouts for agency filings and OWBPA-compliant language, “R” could have preserved the ability to file a charge with the EEOC and cooperate in an investigation. Lesson: Always enumerate carveouts for future claims and verify ADEA/OWBPA compliance.

Scenario B — Mutual non-disparagement + neutral reference pays off
“J” negotiated a mutual, time-limited non-disparagement clause limited to knowingly false statements and secured a neutral reference clause with HR-confirmed language. Recruiters received consistent, factual references and “J” quickly landed interviews. When a manager informally shared a negative opinion, HR intervention and the written neutral-reference confirmation resolved it swiftly. Resources like SHRM’s neutral reference best practices and Nolo’s severance guide reflect why these terms smooth future opportunities. Lesson: Neutral reference language + mutual non-disparagement meaningfully improves job-search outcomes.

Conclusion

A smart severance strategy focuses on the highest-impact protections: make the severance non-disparagement clause mutual and limited to knowingly false statements, insist on clear carveouts and severance release exceptions, secure neutral reference language, clarify rehire terms, and consult counsel when statutory rights or large sums are involved. Negotiate severance language methodically, confirm every edit in the final draft, and keep copies and deadlines organized.

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FAQ

Can I talk to prospective employers about why I left if I signed a non-disparagement clause?

Often yes—if you negotiate the clause to cover only knowingly false statements and add carveouts for truthful statements required by law and job-search basics. Overbroad clauses can chill speech, so push for the balanced approach discussed by Nolo’s non-disparagement explainer and the neutral-reference tactics drawn from SHRM’s neutral reference guidance.

Will a signed release prevent me from filing an EEOC charge?

It should not. A well-drafted release expressly preserves your right to file with and cooperate with government agencies like the EEOC, though it may limit your ability to collect individual monetary relief in some contexts. That is why explicit severance release exceptions are critical.

What happens if my former employer gives a bad reference despite a neutral-reference clause?

Document who said what, when, and to whom; notify HR and request corrective action under the agreement. If damage occurs, you may pursue contract remedies and, in some cases, defamation claims—see these practical overviews on a bad reference lawsuit and suing an employer for defamation. To prevent issues up front, adopt SHRM’s neutral reference best practices.

How long should non-disparagement/neutral reference provisions last?

There is no single rule. Many employees seek 6–12 months for non-disparagement and an indefinite neutral-reference policy that simply codifies HR’s standard practice. Tie duration to reasonableness and employment norms, and anchor your edits to common guidance like SHRM’s severance overview and Nolo’s severance release guidance.

This article provides general information, not legal advice. Consult a qualified employment attorney for guidance on your specific situation.