Severance Pay
Separation Agreement
Severance Negotiation
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Severance "Severance Pay" "Employment Separation" "Separation Agreements" "Employer Negotiation" "At Will" severance negotiation, executive law, noncompete
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THOMAS C. WALKER
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s i l i c o n v a l le y - s f e a s t b a y a r e a - c a l i f o r n i a
NOTABLE EMPLOYMENT LAW SEVERANCE CASES & QUOTES
THE LEGAL INFORMATION CONTAINED IN THIS SITE IS OF A GENERAL RESOURCES NATURE AND MAY HAVE BEEN SUPERSEDED; IT IS NOT A SUBSTITUTE FOR LEGAL ADVICE IN ANY PARTICULAR SITUATION. YOU SHOULD CONSULT A LICENSED LAWYER WHO IS KNOWLEDGEABLE ABOUT THE AREA OF LAW IN QUESTION BEFORE YOU TAKE ACTION TO ADDRESS YOUR RIGHTS. DON’T DELAY; YOU MAY LOSE YOUR RIGHTS.
Typical employers of my employee-clients:
- Valley Technology Start-ups
- Fortune Companies
- SF Bay Area Mid-Sized Companies
- California Private & Non-Profit Employers
Typical results:
- Better Money, Terms, Agreements, Planning
Common Myths & Misconceptions about Severance:
"Severance pay is a gift."
"My employer doesn't pay severance."
"Since they made an offer of severance I can always counter for more,"
"My employer says they never pay more than one week for each year of service."
"My separation agreement has a 21 day review and 7 day revocation clause; it must be fair."
"The release clause of the separation agreement could jeopardize my COBRA and 401(k) account!"
"I can't collect unemployment because I was paid severance, even though I was terminated by my employer "
"I'm quitting, so I can't ask for severance."
"My company says cash is too tight to pay any severance."
Talk to an expert.
SCHACHTER v. CITIGROUP, INC. S161385 An employee may accept as partial compensation shares of restricted stock or stock options that do not vest until after a specified period of employment (e.g., 2 years). Such contingent, nonvested rights are nonetheless “wages” for Labor Code purposes. “If the employee is discharged before completion of all of the terms of the bonus agreement, and there is not valid cause, based on conduct of the employee, for the discharge, the employee may be entitled to recover at least a pro-rata share of the promised bonus.” (Ibid.; DLSE Opn. Letter No. 1987.06.03 (June 3, 1987).) In the analogous context of commissions on sales, it has long been the rule that termination (whether voluntary or involuntary) does not necessarily impede an employee‟s right to receive a commission where no other action is required on the part of the employee to complete the sale leading to the commission payment. (See Willison v. Turner Resilient Floors (1949) 89 Cal.App.2d 589.) This concept has been colorfully described as “ „ “He who shakes the tree is the one to gather the fruit.” ‟ ” (E. A. Strout Western Realty Agency, Inc. v. Lewis (1967) 255 Cal.App.2d 254, 259, quoting Sessions v. Pacific Improvement Co. (1922) 57 Cal.App. 1, 18; see also DLSE, Enforcement Policies and Interpretations Manual, supra, § 34.6.)
PEREZ V. ULINE, INC. (2007) [157 CAL.APP.4TH 953 .. Plaintiff, a college graduate who reads and speaks English fluently, read the agreement more than once. He believed it was “entirely up to [him]” whether to execute the agreement. He knew that if he did not sign it within the time limit he would not receive severance pay; he unsuccessfully negotiated with defendant to obtain more money. Although he did not understand the meaning of “advisor,” he assumed it might have been a lawyer. He thought about talking to a lawyer before he signed the agreement but did not remember if he actually did. On the last day of the offer, plaintiff signed the agreement and was paid according to its terms.
MURPHY V. KENNETH COLE PRODUCTIONS, INC.(2007) 40 CAL.4TH 1094, 56 CAL.RPTR.3D 880, 155 P.3D 284 …Indeed, the Legislature has frequently used the words “pay” or “compensation” in the Labor Code as synonyms for “wages.” (E.g., §§ 96, subd. (h) [“vacation pay” and “severance pay”], 511 [“overtime compensation”], 1043 [“time off with pay”].) The same is true of the IWC wage orders. (E.g., Cal. Code Regs., tit. 8, § 11070, subds. 3 [“regular rate of pay” and “overtime compensation”], 5 [“reporting time pay”].
ASMUS V. PACIFIC BELL (2000) 23 CAL.4TH 1, 96 CAL.RPTR.2D 179, 999 P.2D 71 … In Scott, we stated that, in light of Foley, we could find "no rational reason why an employer's policy that its employees will not be demoted except for good cause, like a policy restricting termination or providing for severance pay, cannot become an implied term of an employment contract. In each of these instances, an employer promises to confer a significant benefit on the employee, and it is a question of fact whether that promise was reasonably understood by the employee to create a contractual obligation."
BARTON V. ELEXSYS INTERNAT., INC. (1998) 62 CAL.APP.4TH 1182, 73 CAL.RPTR.2D 212 … Barton's severance agreement, […] , did not anywhere discuss "stock," "stock options," "vesting," or "exercise" of stock options. The focus of the agreement was instead on "payments" of "salary" should Barton's employment be terminated: "In the event your employment is terminated without cause by the Company, you will receive monthly payments equal to your monthly salary at the time of termination for twelve (12) months or until earlier employment." … Barton has failed to show that the severance agreement, which never mentioned stock options, was intended by the parties to alter the terms of the written stock option agreements. Accordingly, his breach of contract claim cannot be based on the written terms of the severance agreement.
SKRBINA V. FLEMING COMPANIES (1996) 45 CAL.APP.4TH …. the plaintiff, laid off by the defendant, signed a release in exchange for severance pay. In the document the plaintiff agreed he was releasing the defendant from all claims, known or unknown, that he had currently or in the past, or that he may have in the future. The agreement did not refer to Civil Code section 1542. In upholding the validity of the release the court held that “‘[r]elease, indemnity and similar exculpatory provisions are binding on the signatories and enforceable so long as they are . . . “clear, explicit and comprehensible in each [of their] essential details. Such an agreement, read as a whole, must clearly notify the prospective releasor or indemnitor of the effect of signing the agreement.”’
Typical engagements:
- Separation Timing & Strategy
- Optomizing Severance Pay & Terms
- UI, COBRA, Benefits Continuation
- Non-Compete Clauses
- Deferred Compensation
- Equity Protection & Cash-Outs
- Restrictive Covenants
- Afterglow Considerations
EMPLOYMENT SEPARATION STRATEGY
Severance Negotiation & Coaching
