SEVERANCE AGREEMENTS  

 

WHAT IS A SEVERANCE agreement?

If you are laid off or terminated from your job, your employer may offer to pay you money or promise to do certain things when you leave the company. In exchange, you will most likely have to sign a document agreeing not to ever bring a claim against your employer in the future. That document is called a “severance agreement.

IS AN EMPloyer required to offer you severance pay?

No, in California, an employer is not required to provide you with severance pay, even if the employer has offered severance to other employees. 

things to consider before signing a severance agreement

  • You do not have to sign the severance agreement, and your employer cannot withhold any wages you are owed until you sign it.

  • You can negotiate the terms of the severance agreement and are free to ask your employer to make changes to the severance agreement, including asking for more money.

  • Do you feel that you have been wrongfully terminated? If so, you will most likely never able to bring a lawsuit against your employer if you sign the agreement because the agreement will probably require you to waive all claims against your employer, including wrongful termination claims. This waiver will even apply to claims that you may not have even known you had against the employer when you signed the agreement.  

  • Are you over the age of 40? If so, California law requires that before signing a severance agreement, your employer advise you that you have right to consult an attorney and that you have at least 21 days to consider the agreement before signing it. You also have 7 days after signing the agreement to revoke it.

  • An employer cannot require you to waive any claim you may have for unpaid overtime wages, workers compensation benefits or unemployment insurance in a severance agreement. Any agreement that requires you to waive such claims is generally unenforceable.  

WHAT If you already signed a severance agreement?

If you are over the age of 40 and 7 days have not passed since you signed it, you can revoke it by giving notice to your employer in writing. If you are under the age of 40 or if you are over 40 but it has been more than 7 days, the agreement can be invalidated if your employer committed fraud or deception, or made a misrepresentation to you in order to get you to sign the agreement. The agreement may also be unenforceable if you signed it under duress.

 

It is important you consult with an attorney before signing a severance agreement. Your employer probably consulted with one before providing you with an agreement. Brock & Gonzales, LLP will review your severance agreement and advise you of your legal rights.

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