These agreements aren’t just about the severance pay you’ll receive after leaving your job. These legal documents typically include several provisions that can significantly impact your future employment prospects and legal rights. Most severance agreements contain the following elements:
- Release of claims
- Non-disclosure provisions
- Non-compete clauses
- Non-disparagement agreements
- Confidentiality requirements
- Return of company property
- Cooperation clauses
When Shouldn’t You Sign a Severance Agreement?
Several situations exist where refusing to sign a severance agreement could be in your best interest. Sometimes the potential benefits of maintaining your legal rights outweigh the immediate financial gain. Never sign a severance agreement under these circumstances:
- You have strong legal claims: If you experienced discrimination, harassment, or wrongful termination, the severance payment might be less than what you can recover in a lawsuit.
- You weren’t given adequate time to review: California law requires specific review periods, and rushing you to sign is a red flag.
- The agreement contains unusual or punitive terms: Some employers include provisions designed to punish rather than provide fair compensation.
- You’re being asked to lie or cover up misconduct: No severance package is worth compromising your integrity or enabling illegal behavior.
- The payment doesn’t reflect your years of service or position: If the offer seems unreasonably low compared to your contributions, negotiation might be possible.
Remember that once you sign a severance agreement, you typically can’t change your mind. Taking time to carefully evaluate whether the terms truly serve your interests is worth more than any pressure your employer might apply to sign quickly.
What Are the Red Flags in a Severance Agreement?
Specific provisions in severance agreements should immediately signal red flags. A lawyer can help you identify these problematic clauses and understand their implications for your future. Watch out for these warning signs:
- Non-compete restrictions: Non-compete agreements are generally invalid in California, so employers should not include these as part of a severance agreement.
- Forfeiture provisions: Terms that allow the company to reclaim severance payments under vague circumstances.
- Excessive confidentiality requirements: Clauses that prevent you from discussing legitimate workplace concerns with authorities.
- Unreasonable cooperation demands: Requirements that you provide unlimited future assistance without additional compensation.
Pay particular attention to language that seems designed to intimidate or confuse you. Legitimate severance agreements should be clear and reasonable, not filled with legalese intended to obscure their true impact on your rights and opportunities.
How Long Do You Legally Have to Sign a Severance Agreement in California?
California law provides specific protections regarding the time you have to consider a severance agreement:
- If you’re 40 years or older and the agreement includes an age discrimination waiver, you must be given at least 21 days to review the document.
- If the severance is offered as part of a group layoff involving multiple employees over 40, that review period extends to 45 days. Additionally, you have seven days after signing to revoke your agreement.
- Employees under 40, while there’s no mandated review period, you should never feel pressured to sign immediately.
Why Do You Need an Attorney Before You Sign a Severance Agreement?
The decision to review your severance agreement with an attorney isn’t just about protecting yourself—it’s about ensuring that you understand exactly what you’re agreeing to and whether the terms are fair given your specific circumstances. Here are the key reasons why legal representation matters:
- Legal claim evaluation: An attorney can assess whether you have viable claims against your employer that might be worth more than the severance offer. They can also identify potential violations you might not have recognized.
- Contract interpretation: Lawyers can explain complex legal language and help you understand the long-term implications of each provision. They’ll also spot unusual or problematic clauses that could cause problems later.
- Negotiation power: Having legal representation signals that you’re serious about protecting your rights and often leads to better offers. Attorneys know how to negotiate effectively while maintaining professional relationships.
- Industry knowledge: Employment lawyers understand what’s standard in severance agreements and can identify when terms are unreasonably favorable to your employer. They can also benchmark your offer against industry standards.
- Future protection: An attorney can help structure the agreement to protect your future employment prospects and ensure you’re not unnecessarily limiting your career options. They can also advise on tax implications and the continuation of benefits.
Please Note That We Do Not Negotiate Severance Pay or Review Severance Agreements
Please note: At HBK Lawyers, we do not review severance agreements presented to employees, rather we evaluate your employment history, potential legal claims, and overall circumstances to identify whether we believe you have an employment claim that is worth pursuing, despite being offered a severance package.
Contact Our Employment Law Attorneys
Contact the experience team of attorneys of Haig B. Kazandjian Lawyers APC today. We proudly serve clients across California. Visit us at our Glendale office at:
Haig B. Kazandjian Lawyers APC
801 N. Brand Blvd., Suite 1015,
Glendale, CA 91203
Phone: (818) 696 2306
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