Has Your California Employer Asked You To Sign A Severance Deal?

The day your boss called you into the office to discuss your current employment started out to be a workday like any other. It definitely didn’t finish that way, however. As you drove home, you could hardly believe you could now count yourself among hundreds of other California workers who showed up for work only to learn their employers were eliminating their positions or that their services were simply no longer needed. Such unexpected news can come as a blow and can be challenging to rise above.

Whether you’d been working for the same company for decades or were there less than a year, you always understood that no job is perfect and no one’s position is 100 percent secure, but you really didn’t think you had to worry about an untimely termination. If things became even more complicated when your boss slid a document in front of you during your meeting and asked you to sign a severance agreement, you are definitely not the first employee to encounter such a request.

Should you sign the dotted line?

Hopefully, you told your boss you’d need some time to think things over since the news of your termination came so suddenly. As with most contractual arrangements, there are potential pros and cons to severance agreements. The following list mentions key factors to keep in mind:

  • Caution is the name of the game when anyone asks you to sign anything in an official capacity. You have every right to make a counter request to take the documents home and read through them slowly and thoroughly before you decide whether to sign on.
  • A major component of most severance deals is that employees must agree to waive their rights to sue their employers regarding any issues pertaining to their terminations or other employment-related actions. Let’s say you think your boss fired you because you are pregnant. If you sign a severance agreement, there is no way to hold him or her legally accountable for wrongful termination even if the situation warrants it.
  • On the other hand, severance agreements are not meant to be one-sided. In exchange for your waiver, your boss must provide consideration. This means he or she must compensate you, either with money, benefits or both.
  • The release of liability you sign is not legally enforceable unless all required provisions are included in the contract.

You may, in fact, determine that the issue at hand is so minor you likely wouldn’t take any sort of legal action anyway because you don’t think it qualifies as unlawful since you know most California employers can hire and fire at will. If this is the case, then an exit contract (as it’s sometimes called) may be something you’re interested in; however, it’s always best to make absolutely certain before putting it in writing.

You can speak to others who have entered such contracts in the past and ask them if they were satisfied or if they had it to do over again, would they sign a second time? There are also experienced attorneys who can review a contract for an employee and provide counsel as to whether it seems in his or her best interests to sign.