Employment Lawyer for Severance Package in California: When You Need One and What They Do
A severance package is an offer — not a final answer. The amount your employer is proposing reflects what it believes it can settle your claims for, not necessarily what California law entitles you to. An employment attorney can evaluate the underlying claims, identify what the release is asking you to give up, and negotiate a better outcome before you permanently waive your rights.
You were just laid off — or fired — and your employer handed you a severance agreement. It includes some amount of money, continuation of benefits for a period, and several pages of legal language. The cover letter says you have a deadline to sign. What do you do?
For the vast majority of California employees, the right first step is to have the agreement reviewed by a California employment attorney before signing. Here is why — and what that review actually involves.
What a Severance Agreement Actually Is
A severance agreement is a contract. In exchange for the payment your employer is offering, you are agreeing to release — permanently and irrevocably — all claims you have or may have against your employer. That release is comprehensive. A properly drafted California severance agreement includes:
- All discrimination and harassment claims under California's FEHA and federal Title VII, the ADEA, and the ADA
- All retaliation claims, including claims under Lab. Code § 1102.5, SB 497's civil penalty provisions, and FEHA § 12940(h)
- Wrongful termination claims including Tameny public policy claims
- Unpaid wage, overtime, and meal and rest period claims
- WARN Act back pay claims if your employer failed to provide adequate layoff notice
- ERISA benefit-interference claims if you were approaching a vesting milestone
That is what you are giving up. The question an employment attorney answers is: given the value of what you are releasing, is what your employer is offering you an appropriate amount — or significantly less than your claims may be worth?
What an Employment Lawyer Does With Your Severance Package
1. Evaluates the value of your underlying claims
Before your attorney can tell you whether the severance amount is fair, they need to assess what claims you may have. That analysis looks at the circumstances of your termination: were there signs of age discrimination, disability discrimination, pregnancy discrimination, or retaliation? Was the stated reason for termination inconsistent with your prior performance record? Did your employer fail to comply with the California WARN Act? Were there unpaid wages, overtime, or missed meal and rest period premiums? Each viable claim has its own potential value — and the aggregate of those values is what an employment attorney measures against what your employer is proposing to pay.
2. Identifies defects in the release and the OWBPA compliance
If you are 40 or older, the Older Workers Benefit Protection Act (OWBPA) imposes specific requirements on any release of ADEA claims. The agreement must: advise you in writing to consult an attorney; give you at least 21 days to consider the offer (or 45 days in a group termination); give you 7 days after signing to revoke; and, in a group termination, identify the group of employees offered severance and their ages and job titles. A release that fails any of these requirements is unenforceable as to your federal age discrimination rights — and may be challengeable as to the broader release.
If you are 40 or older and your employer gave you fewer than 45 days to review a group-termination severance: that is a potential OWBPA defect. It does not automatically void the agreement, but it does create a legal argument that your waiver of ADEA rights was not knowing and voluntary. An employment attorney will identify this immediately.
3. Spots problematic clauses beyond the release
Modern California severance agreements contain provisions beyond the release that affect your future significantly:
- Non-disparagement clauses that prohibit you from saying anything negative about the employer — sometimes including prohibiting truthful statements to prospective employers, government agencies, or courts
- Cooperation clauses requiring you to assist the employer in future litigation at their request, potentially without compensation
- Non-solicitation provisions that limit your ability to work with former clients or recruit former colleagues
- Clawback provisions requiring you to return the severance payment if you violate any provision of the agreement
- Reference language — or the absence of it — that may affect whether your employer gives a neutral reference to future employers
An experienced employment attorney will flag provisions that are overbroad, unenforceable, or disproportionately burdensome — and will negotiate to remove or limit them.
4. Negotiates the amount and terms
Most California employers expect negotiation on severance. The initial offer is rarely the final number. An employment attorney's leverage in that negotiation is the value of your underlying claims: if your discrimination or retaliation claims are strong, or if the employer's WARN Act compliance is questionable, the employer has a financial incentive to settle those claims for more than the initial offer reflects. An attorney can also negotiate for benefits extensions, COBRA subsidies, outplacement assistance, equity acceleration, and reference language — none of which automatically appears in the employer's first offer.
When It Makes the Most Sense to Hire an Employment Lawyer for Severance
You believe the termination was discriminatory or retaliatory. If your termination followed a protected complaint, a medical leave request, a pregnancy announcement, or any other protected activity — or if you suspect your age, disability, national origin, or other protected characteristic influenced the decision — the value of the claims you are releasing may significantly exceed what the employer is offering.
You are 40 or older and the termination was part of a group reduction. OWBPA compliance is technically required but frequently imperfect. The 45-day review period, the group data disclosure, and the 7-day revocation right are conditions on a valid ADEA waiver, and defects in any of them create leverage.
Your employer may have violated the California WARN Act. If you were part of a mass layoff and did not receive 60 days' written notice — or received notice that may not satisfy the 2026 SB 617 content requirements — your WARN Act back pay claim may be worth as much as the employer's severance offer or more.
You have unpaid wages, overtime, or commissions. A severance agreement releases these claims along with everything else. If your final paycheck was short, commissions were withheld, or overtime was not paid, those amounts belong in the negotiation before you release them.
The severance amount is significant. The cost of legal review is typically modest relative to the value of a well-compensated employee's severance and underlying claims. For a senior software engineer, an executive, or any well-compensated professional, the potential upside from negotiation almost always exceeds the cost of the review.
How California's Employment Laws Affect Severance Value
Several California-specific protections increase the value of claims that severance agreements release:
- FEHA attorney's fees: FEHA allows a prevailing employee to recover reasonable attorney's fees and costs, subject to the court's determination. This one-way fee shifting makes strong FEHA claims economically viable regardless of the dollar value of the underlying discrimination, which is why employers are often willing to pay significantly more in severance to resolve them
- SB 497 civil penalties: For retaliation claims under Labor Code sections 98.6, 1102.5, and 1197.5, SB 497 (effective January 1, 2024) added civil penalties of up to $10,000 per violation payable directly to the employee, on top of all other remedies
- Cal-WARN back pay: Up to 60 days per employee at the employee's daily rate of pay plus the value of lost benefits — for well-compensated California tech employees, this can be a substantial sum
- Waiting time penalties: If your final paycheck was not paid on the termination date, waiting time penalties under Labor Code section 203 accrue at your daily rate of pay for up to 30 days
Frequently Asked Questions
You do not legally require one, but it is strongly advisable before signing. A severance agreement is a permanent waiver of all employment claims — including discrimination, retaliation, WARN Act back pay, and unpaid wage claims — in exchange for a payment. Once you sign and the revocation period expires, those claims are gone. An employment attorney can identify whether the severance amount reflects what you may actually be owed, spot defects in the release, and negotiate a higher offer before you commit.
For employees 40 or older, OWBPA requires at least 21 days to review an individual severance offer, or 45 days if the termination was part of a group reduction. After signing, you have 7 days to revoke. These periods cannot be shortened by the employer. Employees under 40 have whatever time the agreement provides, though California employers must give a reasonable time for review. Never sign on the same day you receive the paperwork.
Yes — and most employers expect it. The initial offer reflects what the employer believes it can settle your claims for, not necessarily what it would pay if you pushed back. An employment attorney can evaluate the strength of your underlying claims — discrimination, retaliation, WARN Act back pay, unpaid wages — and use that analysis to negotiate a higher payment, better benefits continuation, an extended COBRA subsidy, a neutral reference, or removal of restrictive covenants before you sign.
A properly drafted California severance agreement releases all known and unknown claims against the employer, including FEHA discrimination and retaliation claims, WARN Act back pay, unpaid wage and overtime claims, wrongful termination claims, and ADEA claims if you are 40 or older and the release complies with OWBPA. Many agreements also include a Civil Code section 1542 waiver, which releases even claims the employee does not yet know about. Once signed and past the revocation period, these claims are generally gone.
California Civil Code section 1542 provides that a general release does not extend to claims that the releasor does not know or suspect to exist at the time of executing the release. Most California severance agreements include a specific waiver of this protection, meaning you are releasing not only the claims you know about, but also claims you do not yet know you have. An employment attorney will identify this provision and advise you on what you may be giving up before you sign.
The Bottom Line
A severance agreement is one of the most consequential documents you will sign in your professional life. It permanently extinguishes claims that may have real dollar value — claims whose value your employer's legal team has already evaluated before making you the offer. Getting an independent evaluation of those same claims, before you sign, is how you make an informed decision rather than an uninformed one.
The review is typically faster than most people expect — often completed within a few days — and the cost is modest relative to the value at stake. For well-compensated employees in Silicon Valley and the Bay Area, severance negotiations routinely produce materially better outcomes than the initial offer.
At McLellan Law Group, LLP, our employment attorneys represent California employees in severance reviews, severance negotiations, and employment litigation throughout Saratoga, San Jose, Campbell, Santa Clara, Sunnyvale, Cupertino, Palo Alto, Menlo Park, and the greater Bay Area. Request a complimentary initial consultation at mclellanlawgroup.lawbrokr.com or call (408) 963-7533.
About the Authors
Claire Melehani, Esq.
Employment law attorney at McLellan Law Group with extensive experience representing employees in wrongful termination, discrimination, and retaliation matters throughout Silicon Valley.
Steven McLellan, Esq.
Founding attorney at McLellan Law Group, specializing in employment law and business litigation throughout Silicon Valley and Santa Clara County.
Advertising Material Disclaimer: This article is an advertisement for legal services by McLellan Law Group, LLP. The information provided is for general informational purposes only and does not constitute legal advice. Reading this article does not create an attorney-client relationship. Prior results do not guarantee a similar outcome. Responsible Attorney: Claire Melehani, Esq., 20665 4th Street, Suite 202, Saratoga, CA 95070.
