Severances & Negotiated Exits

Should you sign that severance agreement? What you're really giving up

By Bruce Weisenberg · Published July 31, 2026 · Last reviewed July 31, 2026 · 7 min read

A severance agreement is a trade: money for your signature giving up your legal claims. Before you sign, three things are worth understanding. The release — not the check — is what the company is actually buying. The release can reach claims you don't yet know you have. Both the number and the terms are usually negotiable. Whatever the deadline says, have the agreement looked at before you sign.

It's not a gift. It's a purchase.

A severance offer reads like a gift — a little cushion on the way out. It isn't. It's a purchase. The company is paying you to sign a release: a promise not to sue over anything that happened during your employment. That release is the product. Everything else in the document exists to make the release stick. Which means the real question is never whether the amount is generous. It's whether the amount is a fair price for what you're selling — and you can't answer that without knowing what you might have.

The clause doing the heavy lifting: the § 1542 waiver

Buried in almost every severance agreement is a waiver of California Civil Code § 1542. Here's what that section normally does for you: it says a general release does not extend to claims you don't know or suspect exist when you sign. It's the law's way of saying you can't sell what you don't know you own. When an agreement asks you to "waive § 1542," it's asking you to give that protection up — to release not just the claims you know about, but the ones you don't yet know you have. The write-up that was really retaliation. The overtime that was never quite right. The pattern you won't see until someone lays the timeline out in front of you. That is a great deal to hand over — which is why the moment to understand your situation is before the signature, not after.

What might actually be in your hand

Depending on your facts, the claims you'd be releasing could include discrimination, harassment, or retaliation under FEHA, whistleblower claims, unpaid wages or overtime, and more. Sometimes those claims are worth far more than the severance on the table. That's not a reason to reject an offer — it's a reason to know what's in your hand before you fold it.

What they can't buy: SB 331, the Silenced No More Act

California law puts real limits on what a severance agreement can do to you. Under SB 331, the Silenced No More Act (in effect since January 1, 2022, codified in part at Government Code § 12964.5), an agreement can't stop you from disclosing information about unlawful acts in the workplace — including harassment, discrimination, and retaliation. Non-disparagement and confidentiality clauses must carve out your right to discuss that conduct. And when a separation agreement is offered, the employer must tell you that you have the right to consult an attorney, and give you at least 5 business days to consider it. If a draft tries to gag you about unlawful conduct, that clause may be unenforceable — and it tells you something about who you're dealing with.

40 or older: the clock, and the list they hand you

Federal law adds protection when age claims are in play. Under the Older Workers Benefit Protection Act (OWBPA), a waiver of age-discrimination (ADEA) claims is generally valid only if you get at least 21 days to consider the agreement — 45 days in a group layoff — plus 7 days to revoke after you sign. A severance that doesn't give you those windows can't validly waive your age claims, no matter what it says.

In a group layoff, the OWBPA requires one more thing, and it may be the most overlooked document in the packet. The employer must disclose, in writing, the job titles and ages of everyone selected for the program — and the ages of everyone in the decisional unit, the group compared, who wasn't. It arrives as a dry exhibit stapled behind the release, and most people never read it. Read it. A selection list clustered at the older end, against a kept group clustered at the younger end, is the statistical spine of an age-discrimination claim — handed over voluntarily, during the very review window the law guarantees before your release becomes binding. The company is required to show you the pattern before you sign away the right to complain about it.

The number can move — and so can the terms

The severance amount is rarely as fixed as it's presented. Beyond the dollars, the terms can move too: a mutual (not one-way) non-disparagement clause, an agreed neutral reference, the timing of payments, continued benefits, and how your departure is described. Where you have real leverage — because you have potential claims — the whole package can shift. The headline is simple: an opening offer is an opening, not a verdict.

The deadline is doing a job

The deadline on a severance offer is a pressure tactic as much as a real limit. In most cases you can ask for more time, and reasonable employers grant it — so ask. The other question people sit on until it's too late: will showing this to a lawyer make the offer disappear?

A short review by someone who does this for a living tells you whether the number matches the release. That's the question everything else on this page comes down to.

Common questions

Bruce Weisenberg represents employees — only employees — across California (State Bar No. 260521). More than seventeen years in employment law, on his own since 2014, working on contingency. Read about Bruce →  ·  Tell me what happened →