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Severance in the Golden State: Is it written in your contract?

On Behalf of | Mar 21, 2024 | Employment Law

Job loss can be a stressful experience, and navigating the legalities surrounding it can add another layer of complexity. California, in particular, has strong employee protections, and understanding your rights regarding severance is crucial.

One of the first questions that might pop up in the event of job loss is: Was a severance package included in your employment contract? Familiarizing yourself with California’s severance laws can help ensure you understand how they intersect with your employment agreement.

Severance in California

California is an “at-will” employment state, meaning both employer and employee can terminate the employment relationship at any time, with or without cause, and with or without notice. However, this doesn’t necessarily translate to an absence of severance.

If your employment contract explicitly mentions a severance package outlining the terms and conditions, then that’s the prevailing document. In such cases, your employer is legally bound to provide the severance as stipulated in the contract.

Now, what happens if your contract is mum on severance? Here’s where California law comes into play. There is no legal mandate in California requiring employers to offer severance pay. However, companies often use severance packages as a strategic tool to secure a release of claims. In exchange for severance pay, the employer might seek a signed agreement from the departing employee, releasing them from potential legal claims related to the termination.

However, even in the absence of a specific clause in your contract, some companies have established severance policies outlined in employee handbooks. These might offer a clearer picture of whether severance is offered and under what circumstances.

Understanding California’s severance laws and how they may affect your employment contract situation can empower you during a potential job separation. Remember, even if your contract doesn’t explicitly mention severance, it’s always worth having an open conversation with your employer to explore your options. If the legalese gets overwhelming, you can consider seeking legal counsel to help ensure that your rights are protected.

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