Non-competes, severance, and negotiating your exit

People prepare obsessively for job offers and walk out of jobs like the terms don't matter. They matter enormously. A severance agreement is a contract where the company buys something from you — usually a release of legal claims and your quiet cooperation — and anything being bought has a negotiable price. Meanwhile the non-compete you signed on day one, without reading, may decide where you're allowed to work next. The exit is a transaction. Treat it like one.

Severance: what it is and what it buys

Almost no U.S. law requires severance. Companies pay it for one main reason: in exchange for the money, you sign a release waiving your right to sue for anything related to your employment. That's why there's a document, why it has a deadline, and why workers over 40 legally get 21 days to consider it and 7 days to revoke — the release of age-discrimination claims requires it. Typical offers run one to four weeks of pay per year of service, more for executives and in negotiated layoffs.

What's actually negotiable

• The amount: weeks of pay is the headline, but total years of service, unvested-equity treatment, and prorated bonus are all line items. Companies expect counteroffers on packages more often than employees expect to make them.
• Healthcare: ask the company to pay your COBRA premiums for the severance period. On a family plan this can be worth $1,500–2,000/month — sometimes an easier yes than more salary.
• Equity: ask for accelerated vesting of near-term tranches, or an extended window to exercise vested stock options (the default 90-day window forces expensive fast decisions).
• The end date itself: staying employed through a vesting date, bonus payment date, or 401(k) match true-up can be worth five figures. Ask to move the termination date, not just the check.
• The narrative: a neutral reference letter, an agreed internal announcement, and 'resigned' vs. 'terminated' coding — free for the company, valuable for you.
• Non-disparagement should run both ways, and the non-compete or non-solicit can often be narrowed or waived in the severance agreement — this is the single best moment to kill a non-compete, because now you have something they want.

Non-competes: what actually binds you

A non-compete restricts where you can work after leaving; a non-solicit restricts recruiting former clients or colleagues; an NDA restricts information. They are not the same document and courts treat them very differently. Enforceability is wildly state-dependent: California voids nearly all employee non-competes, several states ban them below income thresholds, and even in friendly states courts require reasonable scope, geography, and duration. The FTC's attempted nationwide ban was blocked in court, so state law still controls — which means the answer to 'is mine enforceable?' is genuinely 'it depends where you live and what it says.'

1. Find every agreement you've signed — offer letter, handbook acknowledgment, equity grant paperwork (non-competes hide in stock agreements). Ask HR for copies; you're entitled to them.
2. Read the actual scope: 'may not work for a competitor in any capacity, anywhere, for 2 years' reads terrifying and often fails in court; 'may not solicit these named clients for 12 months' is narrow and usually sticks.
3. Before accepting a new job in the same industry, get a one-hour opinion from an employment attorney in your state. Cheap insurance against a lawsuit that could follow you to the new employer.
4. Tell the new employer about the agreement before they hire you. Companies handle disclosed non-competes routinely (carve-outs, indemnification, adjusted duties); discovered ones get people fired.
5. If you're negotiating severance, ask for the non-compete to be waived in writing in the same document. Post-employment is the one time you have leverage over it.

The exit negotiation, step by step

1. 1
   Pause and collect

   Say thank you, take the packet, and commit to nothing in the room. Gather every agreement you've signed, your vesting schedule, bonus dates, and PTO balance the same day.

2. 2
   Price the package yourself

   Tally the offer against what you're forfeiting: weeks of pay, COBRA costs, unvested equity with dates, prorated bonus. The gap between their number and your tally is the negotiation agenda.

3. 3
   Escalate if the exit isn't clean

   Anything that smells of retaliation, discrimination, or bad timing around leave is a flag worth a $300–500 attorney consult before responding. The release you'd sign is worth more in those cases.

4. 4
   Counter once, in writing, unemotionally

   Bundle your asks — more weeks, paid COBRA, a moved end date, the non-compete waived — in one professional email. Companies expect counters; HR has approval room they don't volunteer.

5. 5
   Sign only when it's complete

   Every agreed term goes in the final document, including reference language and the waiver. Then sign, take the money, and start the next chapter clean.

One structural note that makes all of this easier: negotiate while you are still useful to them. The window between the layoff conversation and your signature is when the company wants something you control — the release, a smooth transition, your institutional knowledge documented. Every ask above lands better inside that window than after it closes.

The bottom line

Exits have terms, and terms have prices. Severance is the company buying a release — counter it like the transaction it is, and remember that COBRA payments, vesting dates, and reference language are all currency. Non-competes bind you exactly as much as your state and their wording allow, and the severance table is the best place ever invented to make one disappear. The way you leave a job can be worth more than your last raise. Negotiate it like it.