The financial blow of losing your income adds stress to the emotional toll of the situation. So when employers offer severance packages, including extra pay, accepting may seem like a no-brainer. However, a severance package often comes with dense legal agreements that significantly change your legal rights. Don’t sign away your ability to pursue viable legal claims or speak freely about your employment without an experienced severance negotiation counsel reviewing it first.
At TONG LAW, our employment attorneys routinely advise clients on how to navigate the severance negotiation process, including revising the severance agreements to work for the employee. We flag problematic provisions many severance agreements contain that only benefit the employer. We work to negotiate terms that are more beneficial for you before you sign. Having seasoned California severance agreement lawyers in your corner prevents employers from taking advantage of the situation at your expense.
The “Silenced No More Act” Protects Against Unfair Severance Agreements for California Workers
The “Silenced No More Act” took effect on January 1, 2022. For severance agreements signed on or after January 1, 2022, new restrictions prevent employers from prohibiting the disclosure of underlying factual information relating to any type of harassment, discrimination, or retaliation at work based on the protected status of race, national origin, ethnicity, disability, sexual orientation, religion, age, pregnancy.
Key provisions require employers to:
- Provide at least 5 days for employees to review severance agreements before signing
- Notify employees of their right to consult an attorney about the agreement
- Allow employees to disclose unlawful acts like harassment and discrimination that occurred in the workplace
- Include specific language that non-disparagement clauses don’t prohibit revealing unlawful workplace acts
- Ban confidentiality around settlement amounts related to discrimination claims filed through official channels
While severance agreements can still include general releases and confidentiality around trade secrets, the Silenced No More Act aims to add to existing laws that protect employees when they speak out against unlawful workplace harassment, discrimination, or retaliation.
Expanded restrictions on non-disparagement provisions.
An employer cannot require an employee to sign a non-disparagement agreement that has the purpose or effect of denying the employee the right to disclose information about unlawful acts in the workplace.
What is Severance Pay Under California Law?
Severance pay refers to money employers may offer to pay employees whom they terminate involuntarily through no fault of the worker. Common scenarios include layoffs, reorganizations, and eliminations of a job role or department.
Unlike wages owed for time worked, California law does not require employers to provide any severance pay, regardless of how long you worked there or the reason for termination. Offering severance lies entirely within an employer’s discretion. Since severance functions as consideration for signing a release agreement, employers may condition paying severance on signing.
Typical severance package amounts equate to one to several weeks of pay per year of service. Some companies also cover health insurance premiums for a period following termination as part of the severance deal. Executives and tenured employees often negotiate severance packages equivalent to a year or more of compensation.
Reviewing Key Severance Agreement Terms Closely
In exchange for severance pay, employers present terminated employees with proposed severance or settlement agreements to sign. These legally binding contracts often impose significant post-employment obligations on departing workers as well as terms that significantly limit the employee’s legal rights. Our severance lawyers are skilled at identifying problematic clauses, including:
Broad Releases of All Claims
These provisions forfeit your right to sue the employer for any disputed matters related to your employment. California restricts release agreements from waiving certain types of claims. Make sure any release is limited to known disputes you want to forfeit.
Confidentiality and Non-Disparagement Clauses
These restrict your ability to discuss your former employer, their products or services, the circumstances of your termination, or your time working there. Overly broad confidentiality clauses violate California laws.
Covenants Not to Compete
Non-compete provisions barring you from working for a competitor or starting a business that competes within California are unenforceable under Section 16600 of the Business and Professions Code.
Clawback and Repayment Provisions
These mandate you return all or part of severance compensation if the employer deems you breached the agreement. Even minor technicalities could trigger repayment obligations.
Having experienced counsel review severance contracts protects you from unwittingly surrendering important rights that impact your finances and career.
Negotiating a Fair Severance Agreement
Rather than just accept a standard severance agreement as-is, consider having an attorney negotiate improved terms on your behalf before signing. Key points we frequently negotiate include:
- Increasing the severance payment amount
- Limiting any release of claims to known disputes directly arising from your employment
- Securing a neutral reference from the employer
- Removing confidentiality terms violating California employment laws
- Excluding unenforceable non-compete clauses
- Deleting draconian clawback and repayment provisions
An adept severance agreement lawyer can often negotiate concessions without risking the overall deal. We aim to maximize your severance benefits while minimizing obligations.
Protect Your Interests With Experienced Severance Counsel
When an employer hands you a termination notice alongside a hefty severance agreement, don’t sign away your rights without support from our experienced severance counsel. Contact our office to schedule an initial consultation. We will:
- Explain key severance agreement terms and obligations in plain English
- Identify any unlawful, ambiguous, or problematic contract provisions
- Help negotiate a fair agreement with favorable terms for you
- Ensure the agreement complies with California employment laws
- Provide objective guidance on your options going forward
Having an adept severance lawyer thoroughly review these complex contracts before signing protects your interests at this challenging time. Don’t go it alone.
Refuse to Be Silenced – Protect Yourself from An Unfair Severance Package in California
Few situations feel more disempowering than sudden termination. You can take back control with the help of knowledgeable employment attorneys guiding your next steps. The severance package lawyers at TONG LAW partner with everyday employees like you. We negotiate balanced exit agreements tailored to your specific situation. We stand ready to challenge unlawful terms violating your rights.
Unfair severance agreements aim to buy your silence about workplace wrongdoing. But in California, you have rights. The employment attorneys at TONG LAW can help you fight restrictive severance terms and speak out when it matters most. Don’t let employers mislead you – we will clarify your rights under new laws, strengthening employee voices. Call TONG LAW now for a consultation.