Severance Agreements

When an individual is fired from his or her job, an employer may ask them to sign one of many types of severance agreements. By signing a severance agreement without consulting an attorney, you may waive important rights. In California, there are specific requirements for severance agreements.  For example, severance agreements must be clear and specific, and not confusing because it contains terms the employee doesn’t not understand. If the employee is 40 years old or older, federal law requires the employer to give the employee at least 21 days to review the severance agreements that it wants he or she to sign in order to make up their mind. If an employee that is 40 years old or older and is being laid off in a reduction in force (RIF), the employee must be given 45 days to consider the severance agreement.

Severance Agreements cannot ask the employee to waive their right to file a charge, testify, assist, or cooperate with the U.S. Equal Employment Opportunity Commission (EEOC), Department of Labor Standards and Enforcement (DLSE), Department of Fair Employment and Housing (DFEH) or any other government agency. Severance Agreements cannot ask an employee waive rights or claims that may arise after the date you sign the waiver.

Severance Agreements cannot ask an employee to release their claims for unemployment compensation benefits, workers compensation benefits, claims under the Fair Labor Standards Act, health insurance benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA), or claims with regard to vested benefits under a retirement plan governed by the Employee Retirement Income Security Act (ERISA).

There are many times when clauses contained in severance agreements are unenforceable or violative of California Law. Contact Freiman Law at (310) 917-1024 or via the form on the right if you would like consultation regarding severance agreements.

By Lawrence Freiman