Colorado Severance Agreements: What to Know Before Signing

Quick Answer: Severance agreements in Colorado are negotiable contracts exchanging benefits for a release of claims. Employers are not legally required to offer severance. If you're 40 or older, OWBPA requires 21 days to consider and 7 days to revoke. Colorado's strong final pay laws mean earned wages (including vacation) are owed regardless. Never sign without understanding what you're giving up.

Your signature has consequences.

Severance Basics

What Is Severance

A contract that:

• Provides payment after termination
• Requires release of legal claims
• Is negotiable
• Not legally required

Colorado Context

Remember:

• Final pay owed immediately (if fired)
• Vacation must be paid out
• These rights exist regardless of severance
• Severance is extra consideration

OWBPA Requirements (Age 40+)

Special Protections

If you're 40 or older:

• Must be in writing
• Plain language
• Specifically mentions ADEA
• 21 days to consider
• 7 days to revoke
• Advises consulting attorney

Group Layoffs

Additional requirements:

• 45 days to consider
• Disclosure of who selected/not selected
• Selection criteria provided

What You're Giving Up

Typical Release Covers

Claims released:

• Discrimination claims (CADA, Title VII)
• Wrongful termination
• Wage claims (be careful)
• All employment-related claims

What Can't Be Waived

Cannot release:

• Future claims
• Unemployment benefits
• Workers' comp rights
• Vested pension benefits

Negotiation Tips

Common Points

Often negotiable:

• Severance amount
• Health insurance duration
• Reference language
• Non-compete terms
• Non-disparagement (make mutual)

Leverage

Stronger position if:

• Potential legal claims
• Long tenure
• Senior position
• Employer wants quick resolution

Colorado-Specific Considerations

Final Pay

Already owed:

• Immediate payment if terminated
• All wages earned
• Vacation payout required
• Not part of severance negotiation

Non-Compete Review

Remember:

• Colorado limits non-competes
• May be void if below threshold
• Review any restrictions carefully

Frequently Asked Questions

Is severance required?

No. Colorado doesn't require severance. It's discretionary.

How long to review?

If 40+, minimum 21 days. Under 40, whatever employer offers.

Can I negotiate?

Yes. Most severance is negotiable.

What if I don't sign?

No severance, but keep your legal claims. Weigh the trade-off.

Related Topics

• Colorado Employment Contracts
• Colorado Non-Compete Agreements
• Colorado Final Paycheck

Take Action

If offered severance:

1. Don't sign immediately
2. Take full time allowed
3. Read everything carefully
4. Assess potential claims
5. Consider negotiation
6. Consult attorney if significant

Legal Disclaimer

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