When an employer hands you a severance package, the urge to sign quickly can be strong. You might want your money quickly or want to put a job loss behind you.
However, severance agreements are legally binding contracts designed to protect your employer from future lawsuits. You often give up important rights when you sign. Understanding what you give up is necessary before you sign any paperwork.
The broad release of liability
Most severance agreements ask you to give up your right to sue your employer. California law allows you to give up claims for wrongful termination or harassment in exchange for money, but the law strictly protects earned pay:
- Claims regarding wrongful termination or retaliatory discharge
- Allegations of past workplace discrimination or harassment
- Statutory rights under employment anti-discrimination laws
California law prohibits employers from requiring a waiver of wages that are already due and undisputed. You must weigh the value of the offered payout against the strength of any potential legal claims you hold.
Non-disparagement and confidentiality clauses
Employers frequently include terms that limit what you can discuss after your departure. California’s Silenced No More Act imposes strict rules on these provisions:
- Trade secret protections and proprietary company information
- Confidentiality surrounding the financial terms of the severance payout
- Specific statutory disclaimers preserving your speech rights
California’s Silenced No More Act regulates non-disparagement and confidentiality clauses in severance agreements. Employers must include clear language that tells you about your right to speak about unlawful workplace behavior. Missing this required language can make the rule invalid.
Payment terms and severance payout dates
The agreement must spell out the exact timing and method of your financial compensation. Pay close attention to these payment details:
- Lump sum payments continued payroll installments
- Payment dates for unused accrued vacation time
- Continuation details for health insurance coverage
Clear timelines prevent disputes after your employment relationship ends. Delays in payment can cause serious financial strain while you search for new employment.
Protection for your future before you sign on the line
Severance paperwork can contain terms that impact your career for years. An experienced California employment law attorney can review the contract terms, explain your options and evaluate whether you hold viable claims that warrant negotiation.