While signing a severance agreement may seem beneficial, there are situations where doing so may not be in your best interest. Contact our Los Angeles severance agreement lawyer for a free case review today.
When You Suspect Wrongful Termination or Discrimination
If you believe your employer terminated you wrongfully, signing a severance agreement may prevent you from pursuing legal claims. Severance agreements typically include a release of claims, which means you waive the right to take legal action against the company. In Los Angeles, wrongful termination claims may arise from discrimination, retaliation, breach of contract, or violation of public policy. Common reasons for wrongful termination include:
- Discrimination based on race, gender, age, disability, or other protected characteristics
- Retaliation for reporting discrimination, harassment, or safety violations
- Exercising protected rights, such as taking family or medical leave
If you suspect wrongful termination, consult a Los Angeles wrongful termination lawyer before signing. An attorney can assess your case and advise whether you should pursue legal action instead of accepting the severance.
When the Agreement Lacks Fair Compensation
Severance agreements generally offer compensation to offset the financial impact of losing a job. However, not all severance packages are fair. Employers may offer a minimal severance amount hoping employees will accept it quickly without negotiating.
Before signing, assess whether the severance pay is adequate based on factors like your position, years of service, and the circumstances of your termination. If the compensation seems low, you may have grounds to negotiate for a higher amount. Consider these factors in assessing whether it is fair:
- Length of service: Longer-tenured employees typically receive higher severance amounts.
- Salary level: Severance should reflect your regular pay and benefits.
- Market conditions: High-level employees or those with specialized skills may warrant higher severance if the job market is difficult.
When You Need Time to Review the Agreement
Severance agreements often contain complex legal language that may be hard to understand without professional help. Employers may pressure you to sign quickly, but in California, you have the right to take your time with the agreement. Taking time to review ensures you fully understand the terms, including any confidentiality, non-compete, or non-solicitation clauses that could limit your future opportunities.
When You Are Asked to Sign Away Future Claims
Most severance agreements include a release of claims, but some agreements attempt to waive future claims that haven’t yet arisen. California law prohibits employees from waiving their right to file claims based on events that occur after the agreement’s signing. Be cautious of overly broad language, such as phrases like “waives all current and future claims.”
When the Agreement Includes Unreasonable Restrictive Covenants
Non-compete, non-solicitation, and confidentiality clauses are normally included in a severance agreement. However, non-compete clauses are generally unenforceable in California, as state law strongly favors employee mobility and competition. If the severance agreement includes restrictive covenants that could affect your future career, consult a wrongful termination attorney to negotiate or clarify these terms.
When You Suspect Retaliation
Employers sometimes terminate employees in retaliation for engaging in protected activities, such as reporting harassment, safety violations, or wage and hour issues. California law protects employees from retaliation, and accepting a severance agreement could prevent you from pursuing a claim. If you suspect retaliation played a role in your termination, wait to sign the agreement.
When You Feel Pressured or Coerced to Sign
If you feel pressured or coerced to sign a severance agreement, take a step back. High-pressure tactics, such as threatening to withdraw the offer if you don’t sign immediately, can be a red flag. In California, contracts signed under duress may be considered unenforceable and your decision to sign is fully voluntary.
When the Agreement Impacts Unemployment Benefits
Employees often rely on unemployment benefits after losing a job, but some severance agreements include terms that could affect eligibility for these benefits. For instance, if the agreement states that you resigned voluntarily, the Employment Development Department (EDD) may deny your claim for unemployment benefits. Additionally, if the severance is structured as ongoing “salary continuation,” it could delay your eligibility for benefits until the payments end.
When You Haven’t Consulted an Attorney
Severance agreements can be complex, and employers often include terms that may not be immediately obvious but could have significant long-term effects. Consulting a Los Angeles employment attorney before signing helps you understand the full implications of the agreement and avoid unknowingly waiving valuable rights.
Contact Our Los Angeles Severance Agreement Lawyers Today
An employment lawyer can provide invaluable assistance if you’re asked to sign a severance agreement, ensuring that your rights are protected and that you fully understand the implications of the document. Here’s how they can help:
Review the Agreement for Fairness and Compliance
A lawyer will carefully review the severance agreement to identify any problematic or unfair clauses. They will evaluate whether the compensation offered is reasonable and that the agreement does not combat California law.
Explain Legal Terms and Clauses
Severance agreements often contain complex legal language that may be hard to understand. A lawyer can break down these terms, including confidentiality clauses, non-solicitation agreements, and any waiver of future claims so that you fully understand what you’re agreeing to.
Negotiate Better Terms
If the severance pay or benefits offered are insufficient, a lawyer can negotiate on your behalf to secure a fairer package. They may push for additional compensation, extended healthcare coverage, or changes to restrictive clauses, such as a non-solicitation agreement that could affect future job opportunities.
Identify and Challenge Unlawful Clauses
Severance agreements sometimes include clauses that are unenforceable under California law, such as non-compete agreements or overly broad waivers of future claims. A lawyer can spot these clauses, explain their legal impact, and challenge them if necessary, ensuring that you’re not bound by unfair or unlawful terms.
Protect Against Retaliation
If you were terminated for exercising legal rights or reporting illegal conduct, a lawyer can help you assess whether you have a potential wrongful termination or retaliation claim. In these cases, signing a severance agreement may not be the best option, as pursuing legal action could provide greater compensation.
Provide Peace of Mind
Navigating a severance agreement can be stressful, but a Los Angeles severance agreement attorney’s guidance ensures that you make informed decisions. They’ll help you avoid mistakes, protect your future career opportunities, and secure a fair exit package, giving you peace of mind as you transition to the next chapter. Contact Yadegar, Minoofar, & Soleymani LLP for a free case review.