Severance Agreement Review

Before you sign a severance agreement, know what you are giving up. Nearly every severance agreement includes a release of your legal claims against your employer. Once you sign, those claims are usually gone for good.

Smith Trial Group reviews severance agreements for employees throughout Orange County and Southern California, and when the circumstances support it, negotiates for better terms. A quick review can tell you whether the offer is fair, what you are waiving, and whether you have leverage.

On this page: Why review matters · What to look for · California protections · Negotiating · Executive severance · FAQ

Why a Severance Review Matters

Employers are generally not required to offer severance. When they do, it is usually because they want something in return: a release of claims. A severance offer can be a sign your employer sees legal risk in how your employment ended. If you have potential claims for discrimination, retaliation, wrongful termination, or unpaid wages, the offer may be worth far less than those claims.

Key Severance Agreement Terms to Look For

• General release: what claims you are waiving, and whether it is broader than it needs to be
• Confidentiality and non-disparagement: what you can and cannot say, and to whom
• No-rehire clauses and restrictions on future employment
• Non-solicitation provisions: limits on contacting clients or coworkers
• Payment terms: lump sum or installments, tax treatment, and conditions that could claw the payment back
• Benefits: COBRA premiums, equity vesting, bonuses, and commissions you have already earned
• Cooperation clauses: obligations to assist the company in future litigation

Protections Specific to California

• Non-competes are generally void. California law prohibits most non-compete agreements, and employers may not enforce them against California workers.
• You cannot be silenced about unlawful conduct. Separation agreements may not prevent you from disclosing information about unlawful acts in the workplace, such as harassment or discrimination.
• Time to consult a lawyer. When an agreement releases certain claims, the employer must tell you that you have the right to consult an attorney and give you at least five business days to do so.
• Some rights cannot be waived. For example, wages already owed must be paid regardless of whether you sign, and certain claims cannot be released in a private agreement.
• Employees 40 and older receive additional federal protections, including 21 days to consider (45 in group layoffs) and a 7-day revocation period for age claims.

Negotiating a Better Package

Severance terms are often negotiable, especially when an employee has potential claims. Depending on the facts, we may be able to negotiate a higher payment, extended health coverage, a neutral reference, accelerated vesting, or narrower confidentiality and release terms. Our attorneys previously represented large corporations, so we know how employers evaluate these decisions.

Helpful resources: California Civil Rights Department · EEOC: Waivers in Severance Agreements

Executive Severance Agreements

Severance for executives and senior managers raises issues that standard agreements do not. Before signing, we review and negotiate:

• Equity: vesting acceleration, extended exercise periods for options, and the treatment of RSUs and performance awards
• Bonus and commissions: payment of earned or prorated bonuses and commissions owed under California law
• Change-of-control and “good reason” provisions in your employment agreement that may entitle you to more than what is offered
• Restrictive covenants: non-competes are generally void in California, and non-solicitation and confidentiality terms should be no broader than the law allows
• Clawbacks, cooperation clauses and non-disparagement terms that can follow you after you leave
• Benefits, COBRA subsidies and references, and how your departure will be announced

An executive’s leverage often comes from claims the company would rather not litigate, such as retaliation for compliance concerns, age discrimination, or unpaid compensation. See our executive employment lawyer page.

Frequently Asked Questions

My employer gave me a deadline. What if I run out of time?

Ask for more time. Requests for a reasonable extension to consult a lawyer are routinely granted, and some deadlines are set by law. Do not let a deadline pressure you into signing something you do not understand.

Can I negotiate without seeming difficult?

Yes. Negotiating severance is normal and expected. A professional, well-supported request is usually received as exactly that.

I already signed. Is it too late?

Not necessarily. Some agreements have revocation periods or terms that are not enforceable. Contact us promptly.

Related guides: Your rights in a layoff · How long do I have to sue my employer?