Stand Up for Your Rights with Moxie Legal
Protect Your Severance with Legal Advice from an Insider
Your severance package can significantly influence your financial security and future career path. At Moxie Legal, our dedicated severance lawyer thoroughly reviews every clause of your agreement, identifies potential risks, and negotiates for improved pay, benefits, and protections, ensuring that your best interests are protected. We have successfully assisted California employees fight for their best exit across a wide range of industries.
California severance agreements may be deemed invalid if there is a lack of voluntary consent, particularly if they were obtained through coercion, duress, or fraud. Additionally, if these agreements contain unconscionable terms that are extremely one-sided, they can be challenged.
The Bottom Line: Without proper legal representation and consultation, you could be gambling your financial future on a document that is primarily designed to benefit your employer, not you.
Turn Your Exit into an Opportunity
Risk #1: Waiving Valuable Unknown Claims (Civil Code § 1542)
Example: You sign a severance agreement with a Section 1542 waiver releasing "unknown claims." Three months later, you discover your manager was systematically underpaying female employees by $15,000 annually. Because you waived unknown claims, you cannot pursue this gender discrimination lawsuit that could have been worth $100,000+ in damages.
The Risk: Section 1542 waivers mean "you are effectively deciding to waive the ability to sue the other party at any point in the future" for claims you don't even know exist yet.
Risk #2: Losing WARN Act Protections Without Knowing It c
Example: Your company lays you off with 30 days notice instead of the required 60 days under California's WARN Act. You're entitled to 30 additional days of pay plus health benefits. But if you sign a general release without legal review, you waive this automatic $8,000-15,000 in compensation you didn't even know you were owed.
The Risk: California WARN Act violations create automatic penalties of up to 60 days back pay, but employees often waive these rights unknowingly in severance agreements.
Risk #3: Signing Unenforceable Terms That Limit Your Career
Example: Your severance includes a 2-year non-compete clause preventing you from working in your industry. You turn down three job offers believing you're legally bound. In reality, non-competes are completely unenforceable in California, but your fear of "violating" the agreement costs you $150,000 in lost wages.
The Risk: Many employees avoid opportunities based on unenforceable contract terms they don't understand.
Risk #4: Waiving Wage and Hour Claims Worth More Than Severance
Example: You sign a $10,000 severance releasing all wage claims. Investigation reveals you're owed $18,000 in unpaid overtime plus penalties. Your severance actually cost you $8,000 because you waived more valuable claims.
The Risk: Employees cannot legally waive claims for wages already earned, but many don't realize they have these claims before signing releases.
Risk #5: Destroying Future Employment References
Example: Your severance includes a "neutral reference" clause, but no definition of what that means. Your former manager tells prospective employers you were "terminated for performance issues." Without specific reference language, you have no recourse and lose three job opportunities.
The Risk: Vague reference terms leave you vulnerable to reputation damage that can cost hundreds of thousands in lifetime earnings
Risk #6: Losing Equity and Benefits Worth More Than Cash
Example: You focus on the $15,000 cash severance but don't negotiate stock option acceleration worth $45,000 or 6 months of COBRA payments worth $8,000. Your total package could have been $68,000 instead of $15,000.
The Risk: Employees often focus only on cash payments while overlooking benefits, equity, and insurance continuation that can be worth 2-4x the base severance amount.