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A severance agreement can affect your final pay, legal claims, confidentiality obligations, and future job options. Before signing, call (949) 379-6250 or contact Aegis Law Firm online to schedule a free consultation with a trusted Irvine employment law attorney.
Our attorneys look beyond the payment amount and examine what claims, rights, restrictions, and future protections are at stake.
A severance agreement is a contract between an employer and an employee whose employment is ending. The employer usually offers additional pay, continued benefits, or another form of compensation in exchange for the employee accepting specific terms and releasing certain legal claims. The agreement may address:
The payment shown in the agreement may seem straightforward, but the release and continuing obligations can have lasting consequences.
Before signing, it is critical to review what compensation the employer offers, which rights the agreement removes, and how its terms may affect your career.
The following severance terms can often be negotiated:
Negotiation strategy depends on the work history, reason for separation, possible claims, compensation structure, employer policies, and evidence.
Employers often present severance agreements when they want closure, certainty, and protection from future claims. However, employees often receive these documents at a stressful time, after a layoff, discipline issue, resignation request, investigation, or termination and an agreement offered immediately may not reflect the full value of potential claims.
For example, an employee may have unpaid wages, missed meal or rest break premiums, unpaid commissions, retaliation concerns, or evidence of discrimination. The language matters as much as the amount. A careful review by an attorney can help answer three critical questions:
This step is vital because a severance agreement may contain language that appears standard but violates employee protections.
California law places limits on what employers can include in severance, separation, settlement, and release agreements.
California Government Code §12964.5 limits severance terms that prevent employees from discussing unlawful workplace conduct. The statute states that a separation agreement cannot include a provision that prohibits disclosure of “information about unlawful acts in the workplace.” The same law requires certain restrictive language to include a protection clause.
The required language states, “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.”
Employers may still protect trade secrets, proprietary information, or confidential business information unrelated to unlawful workplace conduct. However, an employer cannot use a severance agreement to silence an employee about harassment, discrimination, retaliation, or other conduct the employee reasonably believes is unlawful.
Government Code §12964.5 also requires an employer offering a separation agreement to notify the employee of the right to consult an attorney. The employer must provide a reasonable time period of at least five business days to do so.
An employee may choose to sign before the five business days expire, but the employer cannot pressure the employee through fraud, misrepresentation, threats to withdraw the offer, or different terms based on early signature.
California Code of Civil Procedure §1001 restricts confidentiality in settlement agreements involving claims filed in court or with an administrative agency. The law prohibits provisions that prevent disclosure of factual information related to claims involving harassment, discrimination, failure to prevent harassment or discrimination, and retaliation. The amount paid can remain confidential though.
An employer generally cannot condition payment of undisputed earned wages on signing a severance release. California Labor Code §206.5 says, “An employer shall not require the execution of a release of a claim or right on account of wages due… unless payment of those wages has been made.”
California Business and Professions Code §16600 protects employees from provisions that limit where they can work, which clients they can contact, or what industry roles they can accept after separation. It states, “Every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”
If a severance agreement includes a release of federal age discrimination claims, federal timing rules can affect whether it is enforceable. Employees who are 40 or older generally receive at least 21 days to consider an individual agreement and seven days to revoke after signing. Group termination programs may require a 45-day review period and written disclosures about the affected employees.
A severance agreement can permanently limit your rights once you sign it. Without legal guidance, you may evaluate the offer based only on the payment amount and miss terms that affect your income, reputation, or next job.
An Irvine severance agreement lawyer evaluates the offer from both a legal and financial perspective. They can provide:
A clear explanation of each provision and its consequences.
An assessment of potential employment claims before they are released.
Negotiation based on unpaid compensation, workplace violations, or employer risk.
Revisions to terms involving confidentiality, references, future employment, and cooperation.
Direct communication with the employer before the signing deadline.
Having an attorney on your side gives you a fair opportunity to understand the agreement, protect your leverage, and negotiate terms that better reflect your interests.
Call (949) 379-6250 or contact Aegis Law Firm online to schedule a free consultation with an experienced Irvine Severance Agreement Lawyer. Our attorneys can review the agreement, explain your options, and help you decide what to do next.