If your employer lays you off or terminates you, they might provide you with a severance agreement. While the financial cushion may seem fair during a challenging transition, that document is rarely just a gift.
In California, these agreements help protect the company, not you. By putting your signature on the document, you consent to a “general release” that waives any claim against your employer for workplace discrimination or harassment.
The hidden reach of broad release clauses
Employers use broad, all-encompassing language in severance agreements to ensure they are buying peace. When you sign, you are not just agreeing “not to sue” for the termination itself; you are waiving your right to bring any legal claim against the company.
These releases are intentionally expansive, covering everything from wage disputes to emotional distress. If you suffered in a hostile work environment but did not realize you had a legal claim until after you signed, the broad language of the document may bar you from seeking justice in court.
The trap of unknown claims and future evidence
A severance agreement may ask you to give up claims you do not know about yet. California Civil Code Section 1542 protects you from waiving those claims unless you agree to give up that protection.
This means that even if you discover “smoking gun” evidence of discrimination months after you leave, your signature has already voided your ability to use it in a lawsuit.
Your FEHA statutory rights
The Fair Employment and Housing Act (FEHA) is your primary shield against discrimination in California. However, employers often include provisions that waive your rights under GOV § 12965.
This code section governs your ability to file a civil action and receive a “right-to-sue” notice from the Civil Rights Department. Once you sign a valid release, you are forfeiting the protection of FEHA, including seeking remedies provided by the state.
Strict OWBPA compliance requirements
If you are over the age of 40, you have additional protection under the federal Older Workers Benefit Protection Act. For a waiver of age discrimination claims to be “knowing and voluntary,” your employer must follow strict rules.
For instance, you must have at least 21 days to review the offer (or 45 days with a mass layoff) and a seven-day period to revoke your signature after you sign. Many employers intentionally violate these by pressuring you to sign on the spot or ignoring the mandatory revocation window.
Ignoring these rules may invalidate your waiver of age discrimination claims even if you accepted the money.
Why you should consult a lawyer before signing
In California, once the ink is dry on a severance agreement, it is incredibly hard to undo. Before you sign away your career’s legal protections, find a lawyer who can review the document for compliance with the “Silenced No More Act” (SB 331), which limits an employer’s ability to use nondisclosure agreements to hide acts of discrimination.
Before accepting the offer, ask your attorney what your legal claims may be worth. That brief pause could make the difference between accepting modest payment and pursuing a much larger recovery.
