If you have recently been offered a severage package by your employer in California and asked to sign a severage agreement, you likely have a lot of questions and you should. Whether you part ways with a current employer voluntarily or not, understanding the ins and outs of severance pay and severance agreements is important to protect your financial and legal interests. It is very common for severance pay to be contingent upon you releasing any and all claims against your employer in exchange for payment. Before signing a severance agreement, it is wise to speak with a discrimination lawyer.
What Is Severance Pay?
Severance pay, often called separation pay, is a financial safety net of sorts meant to support you in the interim between professional positions. It’s the sum of money or benefits an employer may offer to an employee upon their departure from the company. While not all employers are legally obligated to provide one, many supply a severance package or some form of severance payment as a gesture of goodwill or to ease the impact of sudden job loss. It is also not uncommon for an employer to offer severance pay to an employee in order to persuade the employee not to bring any legal claims against the employer.
When Can You Expect Severance Pay?
Several scenarios can influence the opportunity of receiving severance pay. Some of the most common circumstances leading to a severance package or compensation include but are not limited to the following:
- Layoffs or Company Changes: Companies may include severance as a piece of a grander layoff package or when the company makes significant structural changes. It’s the company’s approach to assisting you in navigating the uncertain waters after leaving your job and reducing your legal liabilities. Thus, again, although companies are not mandated to offer severance, many employers still do.
- Executive-Level Agreements: High-level executives or employees with specialized roles often negotiate severance pay as part of their initial employment agreements. This safety net ensures a smoother exit should the time come.
- Voluntary Departures: In rare cases, you might be offered severance pay even if you leave of your own accord. Such severance payments or packages can be a strategic move by your employer to maintain a positive and amicable relationship and, often to entice you to sign a severance agreement releasing your right to bring a legal claim against your employer.
In addition to these circumstances, sometimes employees may feel like they are being offered a severance package because they are being pushed out for some reason. Sometimes, that reason is not lawful. For example, if a company has a pattern and practice of offering severance packages to its employees once they reach a certain age in an effort to push them out before they retire voluntarily, there may be widespread age discrimination occurring in that workplace.
With so many different factors at play, it is important to seek counsel from a knowledgeable San Bernardino discrimination attorney if you are offered a severance package and have concerns or questions about it.
Are Legal Claim Waivers Enforceable in California Severance Agreements?
Severance agreements that include a general waiver of legal claims against the employer are generally legally binding and enforceable in California, however, they are subject to several very specific requirements and restrictions. An employer must give an employee a minimum of 5 days to consider the agreement before signing and the employer must inform the employee of their right to have the agreement reviewed by an attorney. Although the right to bring certain legal claims against the employer may be released under the severance agreement, it may not prohibit an employee from disclosing information relating to discrimination, harassment, or retaliation claims under the Fair and Equal Housing Act (FEHA). California law also limits the circumstances in which a severance agreement may limit an employee’s ability to disclose information about unlawful acts in the workplace.
Negotiating Your Severance Package
Now, let’s get down to the nuts and bolts of negotiating a severance package. Many elements should be considered and carefully reviewed before accepting a severance option. You do not have to settle for the initial offer being presented; there is room for adjustments, and requesting some alterations is not uncommon.
- Know Your Worth: Before initiating negotiations, take a step back and assess your contributions to the company. What value did you bring, and what did you contribute to its success? Knowing your worth strengthens your bargaining position.
- Learn the Terms: Review any existing employment contracts or agreements you have with your employer. They may already outline severance terms, so be sure to understand them thoroughly.
- Seek Legal Counsel: It’s wise to consult with an employment attorney before engaging in negotiations. They can provide insight into whether signing the severance agreement is beneficial to you and advise you on the consequences of signing.
Securing Your Future
Negotiating severance pay is no walk in the park. It can be a complex and emotionally charged process. However, it’s an essential step in securing your financial stability during a career and life transition. Remember that every situation is unique, and what worked for your best friend who was offered and accepted severance or a former coworker may not be what is being provided to you or may not be right for you and your circumstances. If you have questions about a severance agreement or a release agreement, reach out to our discrimination attorney for legal guidance.
Schedule a confidential and free consultation with one of our experienced San Bernardino discrimination lawyers. At SANFORD A. KASSEL, A Professional Law Corporation, we strive to ensure that your financial and legal interests are protected.
