Employment and Separation Agreements
Separation (severance) pay is not mandatory in California unless it is required by an agreement of employment. In cases of potential disputes with departing employees, it might be prudent for employers to offer severance pay in exchange for a signed severance agreement usually containing a release of claims. For employers, a release agreement can be a way to avoid costly litigation.
Employees who are offered separation pay, should consult an attorney to determine whether a release agreement should be signed in light of the termination itself. An oversight may also negatively impact an employee's future employment opportunities.