If you sign a severance agreement, you will be signing away every right you have to sue your employer. In the severance agreement each and every law, even laws that do not apply to you—will be listed, and by signing you will be agreeing not to sue the employer under any of those laws. In most severance agreements, the list of laws is intimidating and some employees regrettably decide they want to reserve the right to sue the employer even if that means not getting any severance.
Please remember that each severance agreement is different and is written in legal language that may intimidate even the most experienced businessperson. Before you decide whether to sign a severance agreement or not, it is recommended that you have an experienced employment attorney review the agreement and explain to you what you are giving up. Do not assume that by not signing this document, you have selected the winning trial strategy for a discrimination case. It does not always work that way.
For example, an employee may decide not to sign a severance agreement in order to file a discrimination suit based on race against the employer. Only after the employee gives up the offered severance package does he or she find out that, because employees of all races were equally terminated during a downsizing, his or her lawsuit is worthless.