Tara Burd San Diego Civil Law Attorney Clarifies The Confusion About Severance Agreements

Tara Burd

See My Who IsTara Burd San Diego Civil Law Attorney reminds everybody “Once an employee waives his or her claims in exchange for payment, the waiver cannot typically be undone. It is not enough for an employee to say ‘I didn’t know’, especially when the severance agreement specifically suggests for the employee to consult an attorney.”

Getting fired can be scary. Even scarier is that 2-5 page agreement the employer hands to its employee saying “sign this if you want us to pay you a severance.” Sometimes the employer will even throw in a deadline: “You have 24 hours to agree to this or else.”

The answer to the question as to sign or not: Sometimes.

A severance agreement is a new contract between an employee and soon-to-be-past employer. Typically, the employer offers to pay the employee money in exchange for a waiver of any and all future claims against the employer. In some cases, severance agreements are given to an employee in appreciation for past performance. More often, however, it is merely a means to induce the employee into waiving his or her rights.

The language of the severance agreement can range from simple to verbose, but the message is always the same: “you waive the right to bring any and all claims against your employer.” In California, Civil Code section 1542 provides that a general release does not extend to claims that are not known about. So, naturally, severance agreements also contain a waiver of Civil Code section 1542. Essentially, by signing the severance agreement, the employee can never bring or aid in bringing any claims against his or her employer in the future, whether known or unknown.

For some employees, this is not a problem because they don’t have any viable legal claims against their employer. No discrimination, no retaliation, no unpaid overtime. For other employees, who are concerned they may have been improperly terminated, waiving their rights is a huge dilemma.

The way to handle this is to speak to an attorney who can assess the value of the potential claim. Attorneys will review an employee’s severance agreement and assess their potential claims for a flat fee. Understanding the potential claim may give the employee leverage to request a larger severance pay. Alternatively, the employee may wish to reject the severance in order to pursue a higher value claim.

Signing a severance agreement that states the employee has received any and all wages, does not waive the employee’s right to request unemployment insurance. Similarly, if the employer decides to contest the unemployment insurance claim, the severance agreement does not prohibit the employee from appealing the denial. A severance agreement cannot waive an individual’s statutory right to unemployment insurance, no matter what the contract says.

Turning down money-in-the-hand is difficult, but the decision to waive one’s legal rights should never be made lightly. However, once an employee is informed about what is waived by signing the severance agreement, he or she can – and should – do so confidently.
For more information visit Tara Burd’s Who Is Page here in the Journal

Tara Burd San Diego Civil Law Attorney
You may contact her at her office
T.Burd Law Group
945 Fourth Ave., #307
San Diego, CA 92101
Or by telephone 858-215-2873

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