Arizona Severance Agreements: What to Know

Quick Answer: Arizona employers aren't required to offer severance, but many do in exchange for releasing legal claims. You have rights to review time, can negotiate terms, and should understand what claims you're giving up before signing.

Don't sign away valuable rights without understanding them.

Severance Basics

Not Required

Key points:

• No Arizona law requires severance
• Voluntary employer decision
• May be required by contract
• Company policy may apply

Why Employers Offer

Common reasons:

• Obtain release of claims
• Avoid litigation
• Smooth transition
• Confidentiality
• Goodwill

Typical Components

May include:

• Cash payment
• Continued benefits
• Outplacement services
• Reference letter
• Non-disparagement

Release of Claims

What You're Releasing

Typically covers:

• Discrimination claims (ACRA, Title VII)
• Wrongful termination
• Wage claims
• Contract claims
• All employment-related claims

Claims That Cannot Be Released

Protected rights:

• Future claims
• Workers' comp rights
• Unemployment benefits
• COBRA rights

OWBPA Requirements (Age 40+)

If 40+:

• 21 days to consider (individual)
• 45 days for group layoffs
• 7-day revocation period
• Must advise to consult attorney

Negotiating Severance

Everything Is Negotiable

Consider:

• Higher payment
• Extended benefits
• Better reference
• Non-compete modification
• Confidentiality scope

Leverage Points

Stronger position if:

• Potential legal claims
• Institutional knowledge
• Senior position
• Needed for transition

Common Improvements

Often achievable:

• More severance weeks
• COBRA payment
• Neutral reference
• Outplacement services

Key Terms to Review

Non-Disparagement

Watch for:

• Scope of restriction
• Is it mutual?
• Social media
• Exceptions

Confidentiality

Understand:

• What's covered
• Who can you tell
• Legal exceptions

Non-Compete

Review:

• Existing agreement affected?
• New restrictions added?
• Scope changes?

Common Scenarios

Scenario 1: Layoff

Situation: Offered 2 weeks per year of service.

Analysis: Standard starting point. Negotiate up if possible.

Scenario 2: Potential Claims

Situation: Believe discrimination occurred, offered severance.

Analysis: Significant leverage. Consult attorney first.

Scenario 3: Executive

Situation: Senior role, negotiated exit.

Analysis: Everything negotiable. Benefits, bonuses, references all in play.

Before Signing

Take Time

Don't rush:

• Use full review period
• OWBPA requires 21 days if 40+
• Request more time if needed

Evaluate Claims

Consider:

• Discrimination?
• Wage issues?
• Contract violations?
• Retaliation?

Get Legal Review

Attorney can:

• Evaluate claim value
• Identify red flags
• Negotiate improvements

Frequently Asked Questions

Is severance required?

No. It's voluntary in Arizona unless contract requires it.

Can I negotiate?

Yes. Almost everything is negotiable.

How long to decide?

Varies. If 40+, minimum 21 days.

Should I get a lawyer?

Recommended if significant severance or potential claims.

Related Topics

• Arizona Employment Contracts
• Arizona Wrongful Termination
• Arizona Employment Law Hub

Take Action

If offered severance:

1. Don't sign immediately
2. Evaluate claims
3. Review all terms
4. Consider legal review
5. Negotiate improvements

Legal Disclaimer

This article provides general information about Arizona severance agreements and is not legal advice. For specific advice, consult a licensed Arizona employment attorney.