Should I Sign My Severance Agreement? What California Employees Need to Know

You’ve just been let go, and HR slides a severance agreement across the table. A few weeks of pay in exchange for your signature. They may even suggest signing it today, “to keep things simple.”

Don’t. Not yet.

A severance agreement is one of the most consequential contracts most people will ever sign — and it’s written entirely by the other side. Here’s what an employment lawyer who reviews these agreements every week wants you to understand first.

What you’re really signing

Severance isn’t a gift. It’s a purchase. The company is buying something from you: your legal claims.

Nearly every severance agreement contains a release of claims — language saying that in exchange for the payment, you give up your right to sue the company for anything that happened during your employment. Wrongful termination, discrimination, harassment, retaliation, unpaid wages — usually all of it, forever.

Many California agreements also include a waiver of Civil Code Section 1542, which means you’re releasing even claims you don’t know about yet. If you learn next month that your firing followed a pattern of pushing out older workers, too late — you released that claim.

The offer tells you something

Companies don’t pay severance out of kindness. In California, no law requires severance at all. When a company offers money for a release, it’s often because it sees risk.

Ask yourself the same questions the company’s lawyers asked: Were you fired shortly after complaining, taking medical leave, disclosing a disability or pregnancy, or reporting something wrong? Did the stated reason for your termination not match your record? The stronger your potential claims, the more that release is worth — and the first offer almost never reflects that value.

We’ve seen initial offers of a few weeks’ pay turn into settlements many times larger once the company understood the employee knew what their claims were worth. That’s the entire point of having the agreement reviewed before you sign.

You have more time than they suggest

Despite the pressure, you almost never have to sign on the spot:

If you’re 40 or older and the agreement asks you to release age discrimination claims, federal law generally requires the company to give you 21 days to consider it (45 days in some group layoffs) — plus 7 days to revoke after signing.

For everyone else, there’s no fixed legal deadline, but any reasonable employer expects you to take at least several days. An offer that “expires today” is a pressure tactic — and a red flag worth showing to a lawyer.

What California law says they can’t do

California has some of the strongest employee protections in the country, and they extend to severance agreements. Depending on when and how the agreement is presented, the company generally cannot:

• Stop you from discussing unlawful workplace conduct — including harassment and discrimination — no matter what the confidentiality clause implies
• Prevent you from filing a charge with, or cooperating with, government agencies like the CRD, EEOC, or Labor Commissioner
• Bind you to a non-compete — they’re void in California, and it’s unlawful to even include them
• Take back wages you’ve already earned; your final paycheck and unused vacation are owed regardless of whether you sign anything

If an agreement tries any of these, that tells you something about how carefully — or carelessly — it was drafted. A lawyer will spot it immediately.

The math on getting it reviewed

A severance review costs far less than what a bad signature can cost you. If the agreement is fair, you sign with confidence. If it’s not, you’ll know what your claims may actually be worth — and you’ll have someone who can negotiate from strength.

At Ortiz Law Office, we’ll tell you honestly whether the offer is reasonable, whether you’re leaving claims on the table, and whether it’s worth pushing back.

Have a severance agreement sitting in front of you? Don’t sign it yet. Call (888) 376-7849 or book a free, confidential consultation — deadlines matter, so call before your consideration period runs out.

This article is attorney advertising, is provided for informational purposes only, and does not constitute legal advice. Reading it does not create an attorney-client relationship. Every case is different; consult a lawyer about your specific situation.