A “severance agreement” or “severance package” is a contract between an employer and an employee which details expectations for both parties following a termination. It may include temporary continued compensation and benefits after termination.
Employers extend severance packages to employees in exchange for a written agreement not to file suit. While California does not require employers to issue severance packages, employers may do so to significantly reduce their legal liabilities.
The contract details pay and benefits promised to the employee and outlines contingencies for compensation. When reviewing a severance agreement, it is imperative to pay close attention to:
Some employers would prefer to extend severance payments in installments instead of one lump sum. Agreeing to payments in installments may result in a higher chance the employer ceases the payments if you establish new employment. One lump sum may allow you to apply for unemployment benefits, whereas the installments could impede the process.
The agreements can also include non-disparagement clauses which prevent you from discussing the terms of the agreement. It is imperative to ensure these provisions and requirements are mutual, lawful, and in your best interest.
It is not uncommon for an employer to immediately begin settlement discussions following a resignation that is directly linked to discrimination, retaliation, and/or other employment issues. In exchange for the payment, the employer will expect you to legally agree to release your right to solicit legal action against the employer.
Kohanchi Law is well-versed in severance agreements, and we’re ready to provide relentless advocacy for your rights. It’s imperative to understand that these agreements are negotiable, and we’re here to secure the best possible outcome for you.
Contact us and Schedule a Free Consultation.