If you are laid off, your employer might offer severance if you sign a covenant not to sue. For example, you might be offered three months’ salary in exchange for not suing. Before agreeing to sign a covenant not to sue, you need to analyze whether you have a valid wrongful termination claim.


You have a wrongful termination claim if you are sued in violation of your employment contract, whether written or implied. An implied contract is often created by explicit promises made in employee manuals, such as a promise not to fire you unless there is “just cause.” If your employer fires you without a reason, then you could sue for wrongful termination.For more information on when you can sue, see Sue for Wrongful Termination.;
, Your employer might have discriminated against you when you were laid off. Federal and state laws prevent an employer from discriminating against you on the basis of certain protected characteristics, such as race, ethnicity, sex, age, or disability.You should check to see if you were let go for a prohibited reason.


Did your employer say or do anything that makes you think you were let go for a discriminatory reason, such as your sex, race, age, religion, etc.? If so, then save documentary evidence, such as reprimands, emails, or written notes.
Did the layoffs affect only one class of people? For example, were only women laid off? Were only Latinos laid off? If so, then you have some evidence of a discriminatory motive for letting you go.
 A lawyer can help you understand if a severance package is a good deal. You should discuss with the lawyer whether you were wrongfully terminated or whether you were discriminated against.


You can find a qualified employment lawyer by visiting your state or local bar association and asking for a referral.Once you have the name of a lawyer, call to schedule a consultation. At the consultation, show the lawyer what evidence you have of wrongful termination or discrimination. The lawyer will analyze the strength of your case.
 Some covenants not to sue can be for a limited duration. For example, you might agree not to sue for a year. You could then bring a lawsuit after the covenant expires.


However, most covenants not to sue will be perpetual. This type of covenant is essentially valid forever.Look at your separation agreement to see what kind of covenant your employer wants you to sign.
 You should compare the amount of severance against the strength of any case you have for wrongful termination or employment discrimination. For example, you might not have any case for either. In this situation, signing a separation agreement with a covenant not to sue isn’t going to cost you anything.


Likewise, if your lawsuit against your employer is weak, then you might want to take the severance and sign the covenant. A weak case might be one where you think you were discriminated against, but you don’t have solid proof.
However, if your case is strong, then you need to discuss with your lawyer whether to settle for severance. By settling, you get money. Nevertheless, you will forfeit any ability to sue your employer in the future if you sign the covenant not to sue., Even if you sign a separation agreement with a covenant not to sue, you may still file a discrimination claim with the Equal Employment Opportunity Commission (EEOC). It is against the law for an employer to ask you to waive your right to file a discrimination claim with the government.Your employer also cannot limit your ability to testify or participate in the investigation with the EEOC.
However, the covenant can bar you from recovering money in an enforcement action filed by the EEOC against your employer.
Identify if your layoff violates your contract.
Check if you were discriminated against.
Meet with an employment lawyer.
Understand the covenant not to sue.
Analyze the amount of severance offered.
Realize that you can still file a discrimination charge.
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