Orange County Severance Agreement Lawyer Guiding You Before You Sign

A severance agreement (sometimes called a separation agreement) is a written deal your employer may offer upon termination of employment. California does not require employers to provide severance pay, so if severance is offered, it’s usually something the company is choosing to offer (often based on a policy, a contract, or a negotiated exit).

The company offers extra pay and/or benefits (for example, a lump-sum payment, continued pay for a few weeks, or help with health coverage).

In return, the agreement often asks you to sign legal promises, commonly including a promise that you won’t sue the company about things connected to your job or your termination.

Severance agreements can also include other terms, such as:

• Keeping certain details private (confidentiality)
• Not publicly attacking the company (non-disparagement)
• Returning company property and confirming you’ve been paid what you’re owed

One extra protection to know: if you are 40 or older and the agreement asks you to give up federal age discrimination rights, federal rules require specific safeguards, commonly at least 21 days to consider the agreement and 7 days after signing to change your mind (revoke).

A severance agreement can look straightforward, but it can affect your rights, your finances, and what you can say or do after you leave. It’s not enough to understand the words on the page; you need to understand what the agreement means for you before you sign.

An Orange County severance agreement attorney helps by:

• Explaining the agreement in plain English so you know exactly what you’re agreeing to
• Identifying red-flag terms (like broad waivers, repayment clauses, strict confidentiality, one-sided non-disparagement, or non-solicitation language)
• Confirming what you’re receiving and whether the terms are reasonable for the restrictions you’re being asked to accept
• Negotiating improvements when possible, such as additional pay, extended benefits, a neutral reference, clearer resignation language, better payout timing, and tighter limits on confidentiality or non-disparagement

In some situations, there may also be more room to negotiate if there are disputed issues around the separation, such as concerns about retaliation, unequal treatment, or unpaid compensation. If that applies, we can raise those issues strategically and seek more protective terms.

A severance package isn’t only about the lump-sum payment. In many cases, it can also cover benefits, timing, and the language your employer uses about your departure. What’s negotiable depends on your company and your situation, but these are common items you can often ask to improve:

• Severance pay: A higher amount (for example, more weeks or months of pay) or a different payment structure (lump sum vs. salary continuation).
• Health coverage support: The employer may agree to help cover COBRA premiums for a period of time, or provide another form of health-benefit assistance.
• How your departure is described: Making sure the agreement uses clear, neutral wording for why you’re leaving, like “resigned” or “position eliminated” (layoff), and removing or softening any language that says you were fired “for cause” (meaning you did something seriously wrong).
• Reference terms: Asking your company to provide a neutral reference, often limited to confirming dates of employment and job title.
• Bonus/commission issues (if applicable): Clarifying what will be paid, when, and under what formula.
• Restrictive clauses: Narrowing or removing terms like overly broad confidentiality, non-disparagement, non-solicitation, or repayment provisions.
• Company property: Sometimes, employees can negotiate to keep certain items (like a laptop or home-office equipment), but many employers require all property to be returned, so this is very case-specific.

Important note (California): Any unused vacation/PTO you already earned is basically treated like pay you’re owed. You should get it whether or not you sign a severance agreement, so the main goal is to make sure the company calculates it correctly and pays you the right amount.

Severance agreements often include “fine print” that can affect you long after you leave. Our severance agreement lawyers in Orange County review the agreement line-by-line and push to remove, narrow, or clarify terms that are overly broad or unfair.

The “general release” is the part that says, “In exchange for severance, you agree not to sue the company.” This can mean you’re giving up rights even for unknown claims you don’t know about yet. That’s why it needs extra attention before you sign.

In California, most non-compete clauses for employees are not valid, meaning your employer generally can’t stop you from working for a competitor after you leave. There are only a few exceptions, mostly when someone is selling a business or leaving an ownership role.

Even so, some severance agreements still include “you can’t compete” or “you can’t solicit” language. That can confuse people and make them nervous about taking a new job. Our employment separation counsel reviews those clauses and pushes to remove or narrow anything that goes too far or doesn’t match California law, so you’re not held back after you leave.

Some agreements try to restrict what you can say after you leave broadly. California law and federal labor law can limit how far employers can go with confidentiality and non-disparagement language. We look for overbroad “gag” terms and push for legally required carve-outs and fair, mutual language where appropriate.

Some contracts state that if you accidentally breach confidentiality, you must pay back the entire severance amount plus penalties. We work to strike these aggressive terms and make them more reasonable.

Severance can affect your taxes and unemployment eligibility. However, the impact depends on how payments are structured and reported, and on your specific situation. We review the agreement language so you understand the financial consequences before you sign.

Taxes: Severance pay is generally taxable and is commonly treated like wages for withholding and employment tax purposes. Some agreements also include other payments (such as reimbursements), and tax treatment can vary depending on what the payment is for. We flag tax-sensitive language and can coordinate with your tax professional when needed.

Unemployment: In California, severance/dismissal/separation pay is generally not treated as “wages” for unemployment insurance purposes and typically does not affect eligibility. However, different arrangements, such as being kept on payroll or being paid as ongoing wages can create different issues. We review the agreement wording and help you avoid language that could cause unnecessary delays or confusion with EDD.

“Tax treatment can be complex, and we recommend you speak with a tax professional. We’ll coordinate with your accountant where appropriate so the agreement language matches your situation.”

When your employer presents a severance agreement, the outcome often depends on leverage, credibility, and how clearly your position is communicated. Blair & Ramirez LLP focuses on protecting employees in employment-law matters, and we bring real litigation experience to the negotiation, not just a quick contract review.

We understand the specific compensation structures of our local industries, from Restricted Stock Units (RSUs) in Irvine’s tech sector to commission structures in Newport Beach finance firms.

When you retain our firm, you leverage:

• The "Litigation Threat": We approach negotiations with the weight of a trial firm behind us. If an employer refuses to offer fair terms, they know we have the resources and experience to file suit.
• Proven Track Record: Our firm has recovered millions for clients in employment matters through verdicts and settlements, including significant results in employment matters involving discrimination, harassment, retaliation, and wrongful termination.

"Prior results do not guarantee a similar outcome."

Contact Blair & Ramirez LLP today. Our Orange County severance agreement lawyer will review your offer, identify your leverage, and help you transition to your next chapter with confidence and financial security.