Understanding Severance Agreements and Legal Options for Employees in California

A severance agreement is a contract between an employer and an employee that outlines the terms of an employee’s departure from the employer. In California, these agreements are often used as a way for an employer to offer an employee financial compensation in exchange for a general release of legal claims against the employer.

For employees in California, it is important to understand the legal options available to them when it comes to negotiating severance agreements. Employees should know that like any contract, the severance agreement is negotiable.

Some key things to keep in mind when considering a severance agreement in California include:

• An employee has the right to take time to consider the agreement and seek the advice of an attorney.

• Employees over the age of 40 are legally guaranteed a longer period of time before the employer can demand that they sign and additional time after they sign to withdraw their signature.

• The agreement should not contain any provisions that would waive an employee’s legal rights, such as the right to file a complaint with the Federal Equal Employment Opportunity Commission (EEOC) or California’s Department of Civil Rights (formerly the Department of Fair Employment and Housing (DFEH)).

• An employee should consider whether the amount of severance compensation will provide the financial support they need as they navigate their job search.

• Severance agreements can and should include non-monetary terms such as extended insurance coverage.

Because the employee is agreeing to release the employer of any legal liability as a result of the termination or employment separation, it is critical that the employee takes the necessary time to review and comprehend the terms that they are agreeing to. The employee should also understand all of the potential options that may be available to them, given their employment situation. At TONG LAW, we are experienced in negotiating severances on behalf of employees throughout the state of California. Our clients span a variety of sectors including tech, healthcare, finance, manufacturing, and more. Book a consultation with TONG LAW today to discuss your severance matter. Please visit our website at www.tong-law.com to fill out a consultation form.

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