When Can You Sue Your Employer After You've Signed a Release?

You've just been laid off. Your employer slides a severance agreement across the table with a release attached. Sign away your right to sue, and you'll get a few weeks of pay. You need the money—and have no plans to sue anyway— so you sign.

But what if you later discover there was more to your layoff than you realized? What if you find out it was discrimination, retaliation, or illegal in some other way? Are you completely out of luck because you signed that release?

Not necessarily. While employers use releases to protect themselves from lawsuits, these agreements aren't always ironclad. Courts scrutinize them carefully, especially when employees sign under pressure or without full information.

This article explains when a release is enforceable, when it might not be, and what courts look at when employees challenge a release after the fact.

What Is a Release of Claims?

A release is a contract between you and your employer. In it, you agree to give up certain legal claims against the company, usually claims arising out of your employment or the end of your employment. In exchange, the employer agrees to give you something of value, most often severance pay or benefits you wouldn't otherwise receive.

Releases are commonly used when employees are laid off, terminated, or asked to resign. From an employer's perspective, a release is a way to reduce the risk of future lawsuits. From an employee's perspective, it can provide short-term financial stability while you look for new work. Because releases are signed at a vulnerable moment, courts often examine them closely.

Can You Ever Sue After Signing a Release?

Sometimes, yes. Signing a release doesn't automatically mean you've given up every possible right to sue your employer. Whether you can still bring a claim depends on the specific facts of your situation, the wording of the release, and the law in your state.

Courts generally focus on whether the release clearly covers the type of claim you want to bring, whether you knowingly and voluntarily agreed to the waiver, and whether the employer gave you something of value in return. If any of those elements are missing, the release might not be enforceable.

Does the Release Clearly Cover Your Claim?

The first issue a court will look at is whether the release actually covers the legal claim you now want to pursue. Many releases list specific types of claims being waived, such as discrimination, harassment, retaliation, or wrongful termination claims under federal or state law. Others use broader language, such as waiving all claims arising out of employment.

If the release clearly and unambiguously states that you are giving up the type of claim you want to bring, that weighs in favor of enforcement. But courts won't stretch vague or confusing language to cover claims that weren't clearly described.

What If You Didn't Know About the Claim?

Employees often sign releases before they know all the relevant facts. For example, you might later discover that everyone who was laid off had complained about discrimination or harassment, suggesting retaliation.

In many states, employees can waive unknown claims, but only if the release language is very clear. The release might need to explicitly say that you are giving up claims you don't yet know about or suspect.

Some states also require that this language be noticeable, such as by using bold text, capital letters, or a separate paragraph. If the release doesn't clearly cover unknown claims, a court might refuse to enforce it against claims you could not reasonably have known about when you signed.

Did You Sign the Release Knowingly and Voluntarily?

For a release to be enforceable, you must have signed it knowingly and voluntarily. Courts look at the circumstances surrounding the signing to decide whether you truly had a meaningful choice.

Simply being out of a job or needing the severance money is usually not enough to show coercion. However, a release might not be voluntary if the employer used improper pressure or deception. For example, threatening to challenge your unemployment benefits, promising favorable treatment that never materializes, or misrepresenting the reason for your termination can all undermine the validity of a release. Rushing you to sign without time to review the document can also be a red flag.

Did You Receive Something of Value in Exchange?

A release is a contract, and like any contract, it must be supported by consideration. Consideration is a legal term that means something of value that you were not already entitled to receive.

In most cases, consideration takes the form of severance pay, extended benefits, or another financial or practical benefit. What doesn't count is anything the employer was already legally required to provide, such as earned wages or benefits required by law. If the employer didn't give you anything extra in exchange for signing the release, a court might find that the release isn't enforceable.

Was the Language Clear and Understandable?

Courts are less likely to enforce releases that are vague, confusing, or written in dense legal jargon. The law generally expects that an average employee should be able to understand what rights they are giving up.

If the language is ambiguous or internally inconsistent, a court might interpret the release against the employer, who typically drafted it. This is especially true when the release attempts to waive important statutory rights without clearly explaining that fact.

Special Rules for Age Discrimination Claims

Federal law provides additional protections for workers who are age 40 or older. Releases that waive age discrimination claims must meet strict requirements, including giving the employee adequate time to review the agreement and, in some cases, time to revoke it after signing.

If an employer fails to follow these rules exactly, the age discrimination waiver might be unenforceable even if the rest of the release is valid.

What If the Employer Didn't Hold Up Its End of the Deal?

If an employer fails to provide the severance or other benefits promised in the release, it might lose the ability to enforce the agreement. A release is a two-way contract, and an employer that breaches it can't rely on it as a shield against lawsuits.

Next Steps

Whether a release is enforceable is a highly fact-specific question, and small details can make a big difference. An experienced employment lawyer can review the agreement, explain your options, and help you decide whether it makes sense to challenge the release.

FAQs About Suing After Signing a Release

Can I sue if I didn't understand the release?

Possibly. If the language of the release was unclear or misleading, a court might decide that you didn't knowingly waive your rights. Courts are especially skeptical of releases written in dense legal jargon that an average employee couldn't reasonably understand.

Can my employer force me to sign a release?

An employer generally can't force you to sign a release. However, the employer is usually allowed to condition severance pay on your agreement to sign one, as long as the severance isn't something you're already entitled to receive.

Does accepting severance pay always mean I gave up my right to sue?

No. Accepting severance pay doesn't automatically waive your rights unless you signed a valid release that clearly covers your claims. The enforceability of the release depends on its wording and the circumstances under which you signed it.

Can I sue for retaliation I learned about after signing a release?

Sometimes. If the release doesn't clearly waive unknown claims, or if state law limits the waiver of claims you could not have known about, you might still be able to sue. These cases are highly fact-specific and often require legal advice.

Are releases enforceable in every state?

Releases are generally enforceable in all states, but the rules vary. Some states impose stricter requirements on employers, particularly when it comes to waiving statutory rights or unknown claims.

What if I signed the release under pressure?

Pressure alone isn't always enough to invalidate a release. But if the employer used threats, deception, or other improper tactics, a court might find that the release wasn't voluntary and refuse to enforce it.

Can a release cover future claims?

Most releases cannot waive claims based on conduct that happens after you sign. If your employer commits a new illegal act after the release is signed, that claim is usually not covered.

Are verbal promises part of the release?

Usually not. Most releases state that the written agreement is the entire deal between you and the employer. Verbal promises that aren't included in the release are often difficult to enforce.

Should I always have a lawyer review a release before signing?

It's strongly recommended. A lawyer can explain what rights you are giving up and whether the severance offered is fair. Getting advice before signing can prevent costly surprises later.