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Severance Agreements for Employees Over 40 in California

Written By: Mo Eldessouky Updated On: April 16, 2024 | Read Time: 5 Minutes

If you’re over 40 and facing a layoff or termination, receiving a severance agreement from your employer can be nerve-wracking. While they may offer you money and benefits, it’s crucial to fully understand the terms and conditions before signing anything.

Thankfully, in California, employers are required to follow certain rules when offering severance agreements to older employees, including providing time to consider the agreement and the option to consult with an attorney.

In this article, we’ll explain what’s typically included in a severance agreement, what parts you may be able to negotiate within the severance agreement, and what rights you may be giving up. So, take a moment to gather yourself, and let’s dive into what you need to know about over 40 severance agreements.

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What’s Typically Included in a Severance Package?

Severance packages can vary depending on the employer and the circumstances surrounding the employee’s departure. However, some common components of a severance package include:

  1. Financial compensation: This can include a lump sum payment, continued salary and benefits for a specified period, or a combination of both.
  2. Continued benefits: Some agreements may provide for continued healthcare or other benefits for a specified period of time.
  3. Non-disparagement clauses: This clause prevents the employee from making negative comments about the employer or disclosing confidential information.
  4. Release of claims: By signing the agreement, the employee may be releasing any legal claims they have against the employer, such as claims of discrimination or wrongful termination.

Do not sign a severance agreement without understanding all of the terms and conditions. Severance agreements are legally binding documents and you may be giving up valuable rights in exchange for the money or benefits provided.

More often than not, if an employer is offering you a severance package, it’s because your employer believes that they “owe” you something for your service. But, that doesn’t mean you should sign it without being fully aware of what rights you’re giving up in exchange for the money or benefits.

It’s important to read through any severance agreement carefully and understand all of the terms before signing. If there is anything that you don’t understand or disagree with, be sure to get clarification from your employer or an employment lawyer.

How Long Do You Have to Consider a Severance Agreement if You Are Over 40 in California?

over 40 severance agreement

California employers are required to give employees over 40 a minimum of 21 days to review a severance agreement. During this time, employees can seek advice from an attorney or financial advisor. Additionally, employees have 7 days after signing the agreement to revoke it.

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According to federal law, severance agreements must be written in a clear and explicit manner.

You must be given a fair amount of time to review the agreement and make sure that you fully understand it and you cannot be pressured into signing it.

A failure on your employer’s part to not adhere to these regulations can be seen as age discrimination under the Age Discrimination in Employment Act (ADEA).

In addition, the ADEA was further updated by the Older Workers Benefit Protection Act (OWBPA) which states that any relinquishing of your rights under the ADEA must be done voluntarily and with complete understanding.

To make sure your waiver of rights is “knowing and voluntary,” the agreement must meet these requirements:

  • The agreement must be written in a way that can be easily understood.
  • It should specifically mention your rights under the ADEA.
  • You should not be forced to waive any future rights.
  • You must receive something of value in exchange for the waiver of your rights.
  • The agreement must advise you to consult with a lawyer before signing.
  • Adequate time should be given to review the agreement.
  • The agreement should allow you to revoke your agreement after it has been given.

The U.S. Department of Labor (DOL) regulations specify that the waiver must:

  • Be entirely in writing,
  • Use plain language that is easy for you to understand,
  • Not include technical jargon or long, complex sentences,
  • Not be misleading, and
  • Specifically, mention the ADEA by name (Age Discrimination in Employment Act).

The separation agreement cannot require you to give up your right to participate in a case that the U.S. Equal Employment Opportunity Commission (EEOC) handles.

Can I Talk with an Employment Lawyer About My Severance Agreement?

Yes. It is recommended that you seek the advice of an employment lawyer before signing the agreement. Severance agreements are legally binding contracts, and you may be giving up valuable rights in exchange for the money or benefits provided.

An employment lawyer can help to review the agreement and discuss any questions or concerns you have before signing it.

Employers may use severance agreements to prevent legal disputes and tie up loose ends, especially if they are in violation of employee rights.

You may be able to negotiate a better deal than what you were offered. In addition, one of the rights that are commonly waived in a severance agreement is the right to file a lawsuit against your employer.

An employment lawyer can help ensure that you are not waiving this right unnecessarily.

Eldessouky Law has extensive experience with severance agreement negotiations and can help you make sure that your rights are protected. Contact us today.

What Rights Are You Typically Waiving Away When You Sign a Severance Agreement?

The rights you may be waived when you sign a severance agreement can vary, depending on the specifics of your situation. Typically employers are offering you a severance package in exchange for x, y, and z rights.

These agreements are typically drafted by employers in order to safeguard themselves against any potential claims that you might have against them.

As such, you should weigh all your options before signing a severance agreement. Some common rights that are typically waived include:

Your employer will most likely outline the rights they are asking you to waive under the “release of claims” section. Make sure to read this section and any other part of the agreement carefully before signing it.

There are certain legal rights that cannot be waived in a general release agreement. These include:

  • Workers’ compensation benefits
  • Unemployment insurance benefits
  • Wages that you were already entitled to receive
  • File a discrimination claim with the Equal Employment Opportunity Commission (EEOC) or participate in a case brought by the Commission

If an employee signs a release that waives any of these rights, the waiver will not be enforced by the courts.

Should You Accept the Severance Package?

Before signing a severance agreement, it’s crucial to evaluate all available options. Negotiating for additional compensation or benefits, like extended health insurance coverage or outplacement services, may be possible.

Consulting with an employment lawyer can be beneficial in determining the fairness of the offer and receiving guidance on whether or not to accept it.

It is also important to understand that if you sign a severance agreement, you are typically agreeing not to sue your employer in the future. You should make sure that you are comfortable with this before signing the agreement.

If you have any questions about your rights or need help negotiating a better deal, contact Eldessouky Law for assistance. We represent employees across the state of California.

Our California employment lawyers are here to help you make sure that your rights are protected and that you receive a fair severance package.

We are available for video conference calls

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