Employment Law
Severance Agreements in California
What Is a Severance Agreement?
A severance agreement is a contract between you and your employer when your employment ends. In exchange for payment and sometimes other benefits, you typically agree to release claims against the employer and may agree to confidentiality, non-disparagement, and other terms.
Key Provisions
- Severance pay: Lump sum or continuation of salary for a period
- Release of claims: You waive the right to sue for discrimination, wages, and other claims
- Non-disparagement: You agree not to make negative statements about the employer
- Confidentiality: You agree not to disclose the agreement or its terms
- Reference: Employer may agree to provide a neutral or positive reference
Legal Requirements
For employees 40+, the Older Workers Benefit Protection Act (OWBPA) requires specific disclosures (e.g., 21 days to consider, 7 days to revoke) for a valid release of age discrimination claims. California law also restricts non-compete agreements—most are void except in limited circumstances.
Getting Advice
Before signing, have an employment attorney review the agreement. They can identify unfavorable terms, explain what you are giving up, and help negotiate improvements.
Frequently Asked Questions
Am I entitled to severance in California?
Generally no, unless your employment contract, company policy, or collective bargaining agreement provides for it. However, many employers offer severance in exchange for a release of claims. You can negotiate the amount and terms.
Should I sign a severance agreement?
It depends. Consider: the amount offered, what you are giving up (release of discrimination, wage, or other claims), non-disparagement, non-compete (enforceability varies in California), and reference provisions. Have an attorney review before signing.
Can I negotiate a severance agreement?
Yes. Employers often expect negotiation. You may be able to increase the payout, extend benefits, modify non-compete or non-disparagement terms, or clarify what claims you are releasing. An attorney can help you negotiate from a position of strength.
Need Legal Assistance?
Contact the Law Offices of Steven A. Alexander for a free consultation. Offices in Santa Ana and Fresno. Bilingual (English/Spanish).
Schedule Consultation