What Are My Rights to Review, Accept, or Reject a Severance Package in California? 2025

Losing a job can make for uncertain times in your life. If you’re presented with a severance package in California, it’s important to understand your rights. Severance packages are not legally required in most cases, but many employers have them in their contracts or company policies. You may be asking, “What are my rights to review, accept, or reject a severance package in California?”

Understanding Severance Packages

A severance package is a financial compensation and benefits agreement offered by an employer to an employee upon termination. These packages might include:

• Severance pay
• Continuation of health benefits (or COBRA coverage assistance)
• Outplacement services
• Non-disclosure agreements
• Non-compete or non-solicitation clauses
• Waiver of legal claims against the employer

While severance packages might seem like a generous offer, clarifying the terms and conditions is imperative in determining if the offered severance agreement is fair and legally compliant. A severance agreement attorney can help you answer your questions.

Are Employers Required to Provide Severance Pay in California?

In California, employers are not legally required to provide severance pay unless it is specified in the employment contract or collective bargaining agreement, if it is part of a company policy, or if the employer has made a verbal or written promise to provide severance. Employees then have the right to review a severance package before signing and are not required to sign an agreement on the spot. Employers should allow a few days for review.

Legal counsel is also a right, and employees can consult an attorney to assess whether the severance offer is fair prior to signing. If you suspect wrongful termination, discrimination, or retaliation from your employer, legal representation is essential to protecting your rights and ensuring a fair severance agreement.

Be sure to carefully read through the agreement’s fine print and pay attention to non-compete clauses that may affect your future employment prospects. Also, determine if the severance pay offsets any eligibility for unemployment.

Your Right to Negotiate a Severance Package

Employees are not required to accept an initial severance package and may be able to negotiate the terms. When approaching negotiations, review the following:

• Assess the offer. Compare your offer to industry standards and company policy. Calculate whether the financial package covers your transition period and whether benefits should be included.
• Identify key areas for negotiation. You might be able to ask for more weeks of pay, continued employer health coverage, and a recommendation letter for future employers. Ensure there are no restrictive clauses that limit future employment opportunities and that vacation and benefit bonuses are included.
• Leverage legal or contractual rights. If you have an employment contract, check that severance is guaranteed and to what extent. If you suspect wrongful termination, you can use this to secure a better deal.
• Communicate professionally. Submit your counteroffer in writing, but be professional and reasonable in your requests. If negotiations fail, assess whether you need to walk away or seek legal help.

Negotiating a severance package can be challenging. Legal guidance can maximize your benefits and protect your rights.

Your Right to Reject a Severance Package

You have the absolute right to reject a severance package if it does not meet your needs. Rejecting does not affect unemployment benefits, but it does protect your legal rights. Many severance agreements require you to waive your right to sue the employer. If you believe you were fired unlawfully, such as in cases of discrimination or retaliation, rejecting a severance package protects your right to file a claim against your employer.

Employees have many rights to review, accept, or reject a severance package in California. While severance is not mandatory in most cases, employers often offer it to ensure a smooth departure and prevent future legal disputes. Before signing any severance agreement, take time to carefully review the terms, negotiate for better benefits, if necessary, and consult a legal professional to ensure your rights are upheld and protected.

FAQs About Severance Package Rights in California

Can You Decline a Severance Package?

Employees can decline a severance package, especially if the terms are unfavorable or contain restrictive clauses, such as a non-compete agreement. If the severance agreement requires waiving legal rights, employees should evaluate whether the compensation justifies giving up potential claims. Declining severance may be beneficial if an employee intends to pursue legal action for wrongful termination.

How Long Do You Have to Review a Severance Agreement in California?

California law, employees must be given at least five business days to review a severance agreement before signing. Employees should use this time to evaluate the terms carefully. If any questions arise, employees should consult with an experienced severance agreement attorney within the five-day period.

What Is the New Law for Severance Agreements in California?

California’s “Silenced No More Act” began in January 2022 and impacted severance agreements by prohibiting employers from including non-disclosure and non-disparagement clauses where it relates to harassment, discrimination, and retaliation. Employers must provide employees enough time to review their severance agreement prior to signing, during which time they have the opportunity to consult an attorney if they believe the termination or severance package offered is unfair.

What Is the Rule of 70 for Severance?

The “Rule of 70” is an informal guideline companies use to determine eligibility for benefits. This rule suggests that if the employee’s years of service and age add up to more than 70, they may be granted additional severance package benefits, such as lengthier healthcare coverage or more weeks of pay. Severance terms ultimately depend on the company policy, employment contracts, and the negotiations between the employer and the departing employee.

Get in Touch with a Severance Agreement Lawyer Today

What are your rights to review, accept, or reject a severance package in California? Signing a severance agreement may waive your legal rights. Before you sign, let an experienced severance attorney answer your questions and review the terms of your severance package to ensure fairness.

The Law Offices of Corbett H. Williams have experience assisting employees with severance packages in California. We can identify hidden clauses, negotiate stronger benefits, and protect your future employment opportunities. Contact us today to schedule a consultation.