Riverside Severance Agreement Lawyer
When an employer needs to layoff an existing employee or must terminate an employee’s relationship with the company, the employer may offer a severance agreement. Although California law does not require severance pay, employers can offer it to employees through a severance agreement, which will also contain additional terms. Both employers and employees alike should understand what severance agreements can and cannot do. Our Riverside severance agreement lawyers can assist employers with drafting enforceable severance agreements and can help employees with reviewing and negotiating the terms of a severance agreement.
What is a Severance Agreement?
A severance agreement, which may also be described as a severance package, is a payment that an employer offers to an employee when the employee is being terminated from the business. The employee’s termination may be a result of the employee’s own fault, or it may be due to a layoff or downsizing at the business. Regardless of the reason the employee is being let go from the business, the severance agreement will typically offer the employee compensation in exchange for the employee agreeing not to file a lawsuit against the business and to avoid other actions that could harm the company.
If the employee agrees to the employer’s terms and takes the payment, then the employer and employee will have entered into a severance agreement. The severance agreement is a contract between the employer and the employee.
What Can Be Included in a Severance Agreement?
Under California law, certain issues or waivers can be included in severance agreements. To be clear, an employer can lawfully provide the employee with a sum of money in exchange for the employee agreeing to one or more of the following:
- Waiver of the ability to file a lawsuit for wrongful termination;
- Waiver of the ability to file a lawsuit for many forms of employment discrimination, including harassment;
- Waiver of known and unknown claims, as long as the severance agreement makes clear that the employee is waiving a right to file a lawsuit for unknown claims;
- Non-disparagement provision, or the employee agreeing that she or he will not disparage (or say negative things about) the employer following termination;
- Confidentiality agreement pertaining to terms like severance, meaning that the employee will not to discuss the specific terms of the severance agreement with other parties; and
- Employee agrees not to disclose the employer’s trade secrets.
What Cannot Go Into a Severance Agreement?
California law prohibits severance agreements from including certain terms or waivers, including some that are lawful in other states. Examples of terms that cannot go into a California severance agreement include but are not limited to:
- No re-hire provision, or a clause that says a worker cannot obtain future employment with the employer or any businesses affiliated with the employer (although there are limited exceptions);
- Employee waiver of California wage and hour law claims;
- Employee waiver of a right to report criminal activity at the workplace;
- Employee waiver of age discrimination claims
- Non-compete clause, or any agreement that restricts the employee’s ability to work for a current or former competitor of the employer; and
- Confidentiality agreement concerning sexual harassment at the workplace.
Contact a Riverside Employment Law Attorney
If you have questions about drafting or signing a severance agreement, our Riverside employment law attorneys can assist you. Contact the Law Office of Karen J. Sloat, APC for more information.