What Not to Do When You're Offered a Severance Agreement in California

If you were just laid off or fired, your employer may hand you a severance agreement and ask you to sign quickly. It may look like standard HR paperwork—but it is not. Severance agreements are legal contracts that decide what rights you keep and what rights you give up.

Before you sign anything, it's important to understand the most common mistakes employees make and why having an employment lawyer review your severance agreement can make a significant difference.

1. Don't Assume the Severance Amount Is Final

Most severance offers are negotiable.
Employers rarely tell you that.

An attorney can help evaluate:

• Whether the offer reflects the value of your potential claims

• Whether you're being underpaid compared to California norms

• Whether the employer is trying to buy a broad legal waiver at a discount

If you experienced discrimination, retaliation, medical leave issues, or unequal treatment, your leverage may be far greater than you think.

2. Don't Sign Without Understanding the Rights You're Releasing

Severance agreements almost always ask you to release:

• Wrongful termination claims

• Retaliation or whistleblower claims

• Claims under the FEHA, CFRA, or Labor Code

• Potential wage, bonus, or commission disputes

You may also be agreeing to confidentiality, non-disparagement terms, or cooperation obligations. Some of these provisions may be unenforceable or unlawful under California law.

A lawyer can identify what's appropriate—and what needs to be removed or revised.

3. Don't Overlook Unpaid Compensation

Before signing, confirm whether you are still owed:

• Unpaid bonuses or commissions

• Accrued but unpaid vacation

• Overtime, missed breaks, or other wage premiums

• Expense reimbursements (Labor Code § 2802)

These amounts can significantly exceed the severance payment.

4. Don't Let Anyone Rush You

If you are 40 or older, federal law gives you:

• 21 days to review the agreement

• 7 days to revoke your signature after signing

Even if you're under 40, your employer cannot pressure or intimidate you into signing immediately. You are allowed time to consult with an attorney.

5. Don't Assume the Agreement Follows California Law

California has strict limits on:

• Confidentiality clauses

• Non-disparagement provisions

• Waivers involving workplace conditions (SB 331)

• Overbroad releases

• Terms restricting lawful employment mobility

Many agreements use outdated forms, or include clauses that cannot be enforced here. An attorney can revise or remove unlawful language.

6. Don't Discount the Value of Your Story

You may not know whether you have legal claims. But an attorney can spot issues such as:

• Retaliatory termination

• Discrimination based on protected characteristics

• Medical leave violations

• Unequal application of layoff criteria

• Hostile work environment concerns

These details can increase your severance value and change your negotiation strategy.

7. Don't Sign a Severance Agreement Without Legal Advice

Once you sign, your rights are gone.
You cannot undo a release of claims.

A short legal review can:

• Increase your severance

• Correct illegal clauses

• Preserve valuable claims

• Protect you from future disputes

If you've been fired, laid off, or pressured to sign quickly, speak with an employment attorney before moving forward.

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