[header] How to know if you should sign a covenant not to sue [title] Identify if your layoff violates your contract. [step] If you are laid off, your employer might offer severance if you sign a covenant not to sue. For example, you might be offered three months' salary in exchange for not suing. 
Before agreeing to sign a covenant not to sue, you need to analyze whether you have a valid wrongful termination claim. [substeps] You have a wrongful termination claim if you are sued in violation of your employment contract, whether written or implied.