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Got a Severance Offer in California? What to Check Before You Sign

October 16, 2026

Your job is ending. Then HR hands you a document and says there is money for you, as long as you sign. Maybe they want it back by Friday. Maybe they want it today.

That document is a severance agreement, and it is usually a trade. You get money or benefits. In return, you give up rights, most often the right to sue the company. Once you sign, it can be very hard to undo. This post walks through what California law says about these agreements and what to look for before you put your name on one.

What you are really agreeing to

Most employers in California do not have to offer severance at all. When they do, the agreement almost always includes a release. A release is a promise not to bring legal claims against the company. That can include claims you do not even know about yet. Many California agreements say you are giving up your rights under Civil Code section 1542, which is the rule that normally protects you from waiving unknown claims.

So the real question is not only “Is this a fair amount of money?” It is also “What am I giving up, and is it worth more than what they are offering?” If you were treated unfairly before you left, the rights you are signing away may matter a great deal.

Severance agreements often include other terms too:

  • A promise not to say negative things about the company (a “non-disparagement” clause)
  • A promise to keep the agreement or the amount private
  • A promise not to apply for a job there again
  • Rules about returning company property or protecting trade secrets
  • A schedule for when and how you get paid

Rules California sets for severance agreements

California lets employers and workers make these deals, but it puts real limits on them. Here are the rules that come up most often.

  • You get time and the right to a lawyer. An employer offering a separation agreement must tell you that you have the right to talk to a lawyer about it. It must also give you at least five business days to do that (Government Code section 12964.5(b)(4)). You can choose to sign sooner, but your employer cannot pressure you into it with threats to pull or change the offer. A same-day deadline is a red flag.
  • You can still speak about unlawful conduct. A severance agreement cannot stop you from disclosing information about unlawful acts at work, such as harassment or discrimination. A non-disparagement clause must include language like this: “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace” (Government Code section 12964.5(b)(1)). A provision that breaks this rule cannot be enforced.
  • The dollar amount can be kept private. The law does allow an agreement to require you to keep the severance amount confidential (Government Code section 12964.5(e)).
  • “No-rehire” clauses are limited. If you filed a claim in good faith, whether in court, with an agency, or through an internal complaint, an agreement settling it generally cannot bar you from working there again. There are narrow exceptions (Code of Civil Procedure section 1002.5).
  • Your final paycheck is not part of the trade. When you are fired, your earned and unpaid wages are due immediately (Labor Code section 201). Your employer cannot require you to sign a release to get wages you are owed. A release signed in violation of that rule is void (Labor Code section 206.5). Severance should be money on top of what you are already owed.
  • Noncompete promises do not hold up. Contracts that keep you from working in your field are generally void in California (Business and Professions Code section 16600). The California Supreme Court confirmed this broad rule in Edwards v. Arthur Andersen LLP (2008). Employers cannot enforce these contracts even if they were signed outside California, and cannot include them in agreements with employees (Business and Professions Code section 16600.5).

If you are 40 or older

Federal law adds protections for older workers who give up age discrimination claims. The agreement must advise you in writing to see a lawyer. It must give you at least 21 days to decide, or 45 days in a group layoff. You also get at least seven days after signing to change your mind, and that window cannot be shortened (29 CFR 1625.22).

You can still go to a government agency

A severance agreement cannot take away your right to file a charge with the EEOC or take part in its investigation. A waiver cannot include terms that bar those steps (29 CFR 1625.22(i)).

Your checklist before you sign

Take the agreement home. Read it slowly, and work through these questions.

  1. What claims am I giving up? Look for words like “release,” “waive,” and “all claims, known or unknown.” Think about anything that happened at work that felt unfair or illegal, such as harassment, unpaid overtime, or being let go after a complaint or medical leave.
  2. Is the money separate from what I am already owed? Your final wages and unused vacation are yours either way. Make sure the severance is extra, not a repackaging of pay you earned.
  3. When and how will I be paid? Check whether it is a lump sum or paid over time, and whether anything could cancel later payments.
  4. What happens to my health coverage? See whether the employer will help pay for continued coverage, and for how long.
  5. What can I say afterward? Read the confidentiality and non-disparagement sections. Confirm they include the required language protecting your right to talk about unlawful conduct.
  6. Are there any limits on my next job? Watch for noncompete language, a no-rehire clause, or rules that seem to block you from working in your field.
  7. Do I have to sign today? You should have at least five business days to get legal advice, and more time if you are 40 or older.

It is normal to ask questions or ask for changes. Many severance terms can be discussed. Getting advice does not mean you are picking a fight.

Timing and deadlines to know

Severance decisions move fast, and the clock on your legal rights keeps running while you decide. Here are key time frames for California workers.

WhatTime frame
Time to review a severance agreement with a lawyerAt least 5 business days (Government Code section 12964.5)
Extra time if you are 40 or older (federal)At least 21 days to decide (45 in a group layoff), plus 7 days to revoke after signing (29 CFR 1625.22)
Final pay if you are firedDue immediately (Labor Code section 201); if the employer willfully pays late, wages continue as a penalty for up to 30 days (Labor Code section 203)
Lawsuit for unpaid wages owed under the Labor CodeGenerally 3 years (Code of Civil Procedure section 338)
Discrimination, harassment, or retaliation complaint with the Civil Rights DepartmentGenerally 3 years from the unlawful act (Government Code section 12960)

If you sign a release, you may lose the right to bring many of these claims at all. That is why it helps to get advice before the review period ends.

If you work for a public employer, such as a city, county, school district, or state agency, different and much shorter deadlines may apply. Some claims against public employers require a formal claim to be filed with the agency first. Talk to a lawyer right away.

Talk to us before you sign

A severance offer can feel like the end of the story. Often it is a negotiation, and you only get one chance at it. A short conversation now can help you understand what you are giving up and whether the offer reflects what happened to you.

Hekmat Law Group represents workers throughout California in severance reviews, wrongful termination, discrimination, retaliation, and wage cases. Call us at 424.888.0848 or reach us through our contact page for a free, confidential consultation.

This post provides general information, not legal advice, and reading it does not create an attorney-client relationship. Laws change and every situation is different. Speak with a licensed attorney about your specific circumstances. Attorney Advertising.