Common Elements of a California Severance Agreement

With the coronavirus pandemic affecting thousands of workers across all sectors of industry in California, many employees are faced with the termination of their employment and the offering of a severance agreement. This document is a contract that details the rights and obligations of the employee and employer regarding the end of the worker’s employment with that company. There are some elements that are common in most severance agreements, and it is critical that employees are aware of what they are agreeing to when signing this contract. If you are offered a severance agreement with your employer, talk to a California employment law attorney today to learn more about your legal options.

Severance Pay and Benefits

One of the most important elements of a severance agreement is the pay and benefits awarded to the employee at the end of their employment. This money allows the employee to financially sustain themselves while they secure a new job. A good contract will detail the amount and delivery structure of this compensation. It may also include additional benefits like a health insurance extension or life insurance extension for a specified period of time.

Confidentiality Clause

Another common element in a California severance agreement is a confidentiality clause. This provides protection for the employer once the employee leaves for a new position. A confidentiality clause bars the employee from disclosing trade secrets, customer lists, financial information, or other intellectual property critical to the success of the business. This clause will also contain penalties for disclosing confidential information if the employee violates this element of the contract.

Non-Compete Agreement

Many severance agreements also contain a non-compete agreement as part of the contract. A non-compete states that the employee may not work in the same industry as their employer within a certain geographic range for a set period of time. Oftentimes, non-compete agreements are extremely broad and may not even be enforceable as written, which is why it is crucial that employees utilize a knowledgeable employment law attorney to review the elements of a severance agreement and renegotiate as necessary.

Reference Handling

A severance agreement can also contain a provision on how to handle references for the employee if new employers reach out. This can range from agreeing to not disparage the employee to providing a neutral reference that avoids blackballing the employee, or writing a reference for their use with future employers.

Non-Disparagement Clause

Finally, a last common element to many severance agreements in California is the inclusion of a non-disparagement clause. This element works both ways — the employee cannot disparage the employer and vice versa. However, it is important to note that a non-disparagement clause cannot prohibit an employee from filing a charge with the EEOC or other government entity about discrimination or harassment in the workplace.

Talk to a Lawyer Today

If you need assistance with a severance agreement in California, an experienced employment attorney may be able to help. Call or contact one in your area today to learn more.