“I Didn’t Know I Gave That Up”: What to Do If You Unknowingly Waived Disability or ERISA Rights in a Severance Agreement
You Were Out Sick. They Offered Severance. You Signed. But Here’s the Problem…
If you were out on disability and your employer offered you severance to “close things out,” it probably seemed like a goodwill gesture — a few weeks or months of pay while you focused on your health.
What many people don’t realize is that buried in those severance agreements are often broad waivers of your rights under federal law, including rights to long-term disability (LTD) benefits, ERISA-governed plans, and even claims against the insurance company itself.
You didn’t intend to give that up.
You probably didn’t know you had a disability claim coming, you thought you’d get better.
And no one explained it.
But now, after the fact, you’re left wondering: Did I unknowingly waive thousands — or even hundreds of thousands — of dollars in LTD benefits?
What Happens All Too Often
Here’s a common scenario we see at Dorian Law:
You go out on medical leave — maybe due to cancer, MS, long COVID, back surgery, depression, or burnout. You don’t file for LTD right away because you’re focused on recovery or still hoping to return.
Your employer offers you a severance package: a few thousand dollars to sign some paperwork and officially part ways.
The documents include language like:
“I release all claims under federal or state law.”
“I waive any claims under ERISA or employer-sponsored benefit plans.”
“I release the insurance company of any obligation related to any disability policy.”No one explains what that means. You sign. You move on. Then you realize:
You might have had a long-term disability claim — and now you may have released it.
We Stay on Top of This — and Use the Latest Legal Tools to Fight for You
At Dorian Law, we track ERISA developments in real time. That’s how we use the most up-to-date legal tools to help clients reopen claims they never knew they had.
In June 2025, the Ninth Circuit issued a landmark decision — Schuman v. Microchip Technology Inc. — that confirms courts must scrutinize ERISA waivers carefully, especially when a fiduciary misleads or confuses a participant. Combined with the Supreme Court’s ruling in CIGNA Corp. v. Amara, this gives employees powerful legal footing to challenge severance agreements they didn’t truly understand. If a disabled employee unknowingly gave up LTD benefits because the employer failed to disclose their rights, courts can now hold the employer financially responsible for breach of fiduciary duty — even after a signed release.
This is cutting-edge law, and we’re already using it to assess real cases.
Here’s the Good News: Courts Are Starting to Push Back
Just recently, a federal appeals court clarified that releases of ERISA claims — including disability benefits — aren’t automatically enforceable.
In fact, courts must now consider:
Whether you understood your rights when you signed
Whether the agreement was clear and explained what you were giving up
Whether the employer misled you or omitted key facts
Whether you had a chance to talk to a lawyer
Whether the value of what you received (small severance) matches what you gave up (potentially years of disability income)
If you were on disability, not working, confused, and unaware that you had LTD rights — and the company failed to tell you — you may not be bound by that waiver.
Even if the paperwork looks official.
Even if you already got the severance check.
Even if it happened months (or even years) ago.
Why This Matters
Long-term disability benefits are often worth hundreds of thousands of dollars over time. They’re meant to replace income when you can’t work due to illness or injury — and they’re usually governed by ERISA, a federal law that protects employee benefit rights.
If your employer or insurer tricked, rushed, or confused you into signing away those rights for a few thousand dollars in severance, you may have legal grounds to challenge the waiver.
At Dorian Law, we focus on ERISA claims, disability denials, and hidden waivers. We’ve helped clients re-open claims they thought were long gone.
What You Can Do Now
Get a copy of the severance agreement you signed.
We can review it for you. You may not have waived as much as they think — or it may not be enforceable.Request your LTD policy documents.
You have the right to request these under ERISA. We can help.Don’t assume it’s too late.
Courts are increasingly willing to look at how the release happened — not just whether a signature is on the page.
FAQ:
Q1: I was on disability leave when I signed a severance agreement. I didn’t know I was giving up my LTD benefits — can I still file a claim?
A: You may still be able to pursue long-term disability (LTD) benefits, even if you signed a severance agreement. If your employer failed to clearly disclose that the agreement waived ERISA-governed benefits — like LTD or life insurance coverage — courts may find the waiver unenforceable, especially if you were on disability at the time.
Q2: My employer never explained that my severance agreement waived LTD or life insurance rights. Is that allowed?
A: Possibly not. If your employer also acts as the plan administrator, they’re considered a fiduciary under ERISA. Failing to tell you — especially while you were on disability — that signing a severance would waive your right to LTD or life waiver-of-premium benefits may be a breach of fiduciary duty. That could open the door to reinstating your claim or recovering what you lost.
Q3: I signed a severance and got paid — but I didn’t understand it waived my long-term disability benefits. Is it too late to fix this?
A: Not necessarily. Courts are increasingly recognizing that ERISA waivers must be knowing and voluntary. If you were on disability and didn’t realize you were giving up LTD benefits when you signed, you may still be able to challenge the agreement — especially under recent legal developments that apply special scrutiny in cases like this.
You Deserve to Understand What You Signed
You didn’t make a mistake. You were recovering, vulnerable, and trusting your employer to act fairly. They should have told you what you were giving up.
If you didn’t realize your severance agreement waived important benefits, or if you're worried it did, let’s talk.
📞 Call Dorian Law at (747) 297-7409
📧 Request a free review
Let us look at what you signed. Let us tell you what your rights really are.