Severance Agreements in California

Video Summary of Severance Agreements Made for California Employees

It’s important to remember that severance agreements have two parts.

Part one. The amount being paid and related considerations

The first part is what you’re getting paid to agree to leave the company. The amount of severance usually depends on the type of what you do and your salary. Some companies offer only two weeks severance and refuse to negotiate. That’s where a severance agreement lawyer can help. Some agreements can be for months or even for a year. Employees in executive positions are often entitled to higher amounts.

The reason for the termination is important.

Employers may also request that the employee:

  • Sign a non-compete agreement. Some employers try to sneak in a non-compete agreement which is no longer legal in California, with limited exceptions.
  • Sign a non-disparagement agreement.

Employees also may be asked to a liquidated damages provision where the employee agrees to pay a flat sum of money if you disparage the company or disclose the amount of the confidential severance agreement. Employers usually don’t want other employees to know how much you got.

Employment lawyers help negotiate the amount of the liquidation clause. They also negotiate that the employer should not defame you after you leave the company. We also work to help you get a favorable reference as part of the severance agreement.

Employees need to review if the employer will pay for your COBRA and other health benefits after you leave.

Release of Claim.

The second part called “Release of Claims.”

It’s thus important to determine what employee-related claims you do have. These can include:

  • A whistleblower claim
    A claim for discrimination
  • A claim for retaliation for asserting a claim

Employers try to have employees release all claims – known and unknown. Section 1542 of the California Civil Code may be available to limit this type of broad release.

Employers should normally give the employee 21 days to review the severance agreement. For help with all employee rights issues including severance agreements, contact Stephen Danz & Associates to review your rights at (877) 789-9707. Se Habla Espanol.