How to Negotiate a Severance Package in Los Angeles

Disclaimer: This content is for informational purposes only and does not constitute legal advice. Every employment situation is unique, and severance package negotiations can carry legal implications. To understand your rights under California employment law, speak with an employment attorney licensed in California.

At Fraigun Law Firm, we advocate for employees across Los Angeles and Southern California. If you’ve been terminated or offered a severance agreement, contact us for a free consultation.

Why Severance Agreements in California Matter

If you’ve been laid off or terminated from your job in Los Angeles, chances are your employer has offered—or will offer—a severance agreement. While California law does not require employers to provide severance pay, employees have the right to review and negotiate the terms if one is offered.

According to the California Labor Code, employers must provide final wages immediately or within 72 hours (Cal. Labor Code § 201–203), but severance is typically voluntary unless otherwise promised in a contract, company policy, or collective bargaining agreement.

However, many severance agreements include clauses that waive your rights to bring legal claims, restrict your ability to work for competitors, or silence you through non-disparagement language. That’s why understanding what you’re being asked to sign is essential.

What Should You Look for in a Severance Package?

In Los Angeles and throughout California, severance agreements often go beyond compensation. Typical terms include:

• Amount and structure of payment (lump sum vs. installments)

• Extension of benefits, including COBRA health coverage (see U.S. Department of Labor COBRA FAQs)

• Waivers of claims under state and federal laws like the California Fair Employment and Housing Act (FEHA) or Title VII of the Civil Rights Act

• Non-disclosure, non-disparagement, or non-solicitation clauses

• Time to review the agreement, especially if you’re over 40 (per the Older Workers Benefit Protection Act)

In some cases, employers in Los Angeles may also include arbitration provisions governed by California Code of Civil Procedure § 1281, which may limit your access to court.

Can You Negotiate Your Severance Agreement in Los Angeles?

Yes. Severance agreements are negotiable; especially if you’ve worked for the company for a significant amount of time, held a leadership role, or if your termination was unexpected. Employees in California have successfully negotiated for:

• Higher severance payouts

• Extended benefits coverage beyond COBRA minimums

• Neutral reference language

• Removal or softening of overly broad restrictions

• Payment of unused vacation time (required under California Labor Code § 227.3)

Many employers in California offer “standard” agreements, but that doesn’t mean every term is set in stone. A fair negotiation is more than possible when approached thoughtfully.

What’s Usually in a Boilerplate Severance Agreement (Standard Language)

These are the common clauses employers include by default—often written to protect their interests:

General Release of Claims A broad waiver of your right to sue for almost any employment-related issue, including wrongful termination or discrimination under California or federal law.

Non-Disparagement Clause Language that prevents you from saying anything negative about the company, even if your statements are true.

Confidentiality Agreement A restriction on discussing the severance terms—or sometimes even the fact that you signed an agreement.

No Admission of Liability A clause that states the employer denies any wrongdoing, regardless of the situation that led to your departure.

Return of Company Property A provision requiring you to return all physical or digital property before receiving any severance pay.

Final Pay Language A statement confirming that you’ve received all compensation owed, including wages, bonuses, or unused vacation time.

What You Can Ask to Modify, Add, or Clarify (Creative but Fair Requests)

While not always offered up front, these items are negotiable and often entirely legal under California employment law:

Neutral Reference or Departure Statement Request that the employer agree to provide a neutral reference or a mutually agreed-upon statement for future employers. This protects your reputation without asking for a glowing review.

Extended Severance Pay or Lump Sum Option Ask for a longer payout period or a lump sum instead of installments, especially if you’re in between jobs.

Subsidized COBRA or Health Insurance Bridge
Employers aren’t required to pay for COBRA, but many will cover a few months of premiums if asked.

Payout for Unused Vacation Days
Under California Labor Code § 227.3, this isn’t negotiable—it’s required. Still, confirm that the amount is clearly stated in writing.

Revise Overbroad Clauses
Narrow the scope of confidentiality or non-disparagement clauses so they don’t restrict your ability to discuss unlawful conduct or whistleblower protections under Labor Code § 1102.5.

Waive Non-Solicitation or Non-Compete (if present) Although non-compete agreements are generally unenforceable in California (Business & Professions Code § 16600), some employers include similar language. You can and should request these be removed or revised.

Equity or Bonus Vesting If you’re close to a vesting date or performance bonus milestone, you may be able to negotiate pro-rated or accelerated payments.

Job Placement Assistance or Outplacement Services Some employers—especially in larger Los Angeles-based companies—may offer support services if requested.

Legal Fees for Review In some severance negotiations, employers agree to contribute toward your attorney fees for reviewing the agreement—especially in high-level roles.

Your Rights Under California & Federal Law

A severance agreement often includes a release of claims. That means you may be giving up your right to sue for:

• Wrongful termination (in violation of public policy or retaliation protections under Cal. Labor Code § 1102.5)

• Discrimination, harassment, or retaliation under FEHA (California Government Code § 12940)

• Wage and hour violations, including missed meal or rest breaks

• Unpaid wages or final paycheck penalties

Once signed, the waiver is usually final. That’s why consulting an employment attorney before signing a severance agreement is highly recommended. In many cases, reviewing a severance agreement can help uncover potential claims you’re being asked to release—sometimes without even realizing it.

Timing Matters: Review Periods & Pressure Tactics

In California, employers must provide a terminated employee with their final paycheck within specific timeframes—immediately upon termination or within 72 hours if the employee resigns without notice (Cal. Labor Code §§ 201–202). But when it comes to severance agreements, timing is usually more flexible.

If you’re 40 or older and being asked to waive your rights under the Age Discrimination in Employment Act (ADEA), federal law under the Older Workers Benefit Protection Act (OWBPA) gives you 21 days to review and 7 days to revoke after signing. Employers must include that language in the agreement.

While these laws are federal, they apply to Los Angeles employees and California workplaces just the same.

If your employer pressures you to sign quickly, that could be a red flag.

Why Work With a Los Angeles Employment Attorney?

Severance negotiations often involve more than just money. They affect your career, future job prospects, and your legal rights. An employment lawyer familiar with Los Angeles and California employment laws can help:

• Identify unfair or illegal terms

• Determine whether you have claims you’re unknowingly waiving

• Negotiate stronger, more favorable terms

• Ensure compliance with both state and federal employment laws

At Fraigun Law Firm, we help employees across Los Angeles navigate severance agreements, employment disputes, and wrongful termination claims. We review agreements for legality, fairness, and long-term impact—often uncovering legal concerns that clients didn’t know existed.

Take the Next Step with Fraigun Law Firm

Negotiating a severance agreement in Los Angeles isn’t just about maximizing your payout—it’s about protecting your rights, your future, and your peace of mind. Whether you’ve been laid off from a tech company in Santa Monica, let go from a firm in Downtown LA, or terminated without explanation in the Valley, you deserve to understand your options.

Fraigun Law Firm is here to help. Based in Los Angeles and serving clients across California, we focus on protecting employee rights. If you’ve received a severance agreement, don’t sign until you’ve spoken to someone who can advocate for you.

📞 Schedule a Free Consultation

Call Fraigun Law Firm or complete our online form for a free, confidential consultation. Let’s review your severance agreement and help you move forward with confidence.