After losing a job, especially at the executive level, legal strategy is rarely the priority, yet a severance package may be more than a financial cushion. It may quietly extinguish your right to challenge how you were let go. For anyone in this situation, talking with a San Francisco executive level wrongful termination attorney can be eye-opening. What looks like a generous offer on the surface may conceal a waiver of your most important legal claims.
What a Severance Agreement Really Is
At its core, a severance agreement is a contract. Your former employer offers money and benefits in exchange for waiving claims for wrongful termination, discrimination, harassment, or retaliation. Most of these documents include a broad release of claims that essentially prevents you from suing for almost anything related to your job or your firing.
Because California law does not require severance, these packages are rarely about generosity and are, instead, calculated risk-management tools. If an offer seems surprisingly large, or the whole process feels rushed and overly scripted, it is often because their lawyers have already spotted a potential legal problem.
How Severance Agreements Can Mask Wrongful Termination
This is where severance agreements can quietly conceal misconduct. Most executive severance agreements include language releasing any and all claims, known or unknown. In California, employers often go a step further by requiring a waiver of Civil Code § 1542, a statute that normally protects individuals from giving up claims they do not yet know exist.
By waiving § 1542, an executive may forfeit claims that come to light later, such as discrimination, harassment, or fraud discovered months after departure. What looks like boilerplate language can have extensive consequences.
Red Flags That Deserve Scrutiny
Executives should pay close attention to the timing of their termination. Severance offers frequently follow events that are legally protected, including:
- Raising concerns about financial irregularities or regulatory compliance
- Reporting safety issues or unethical conduct
- Requesting medical leave or accommodations
- Objecting to pay inequity or governance decisions
When termination closely follows one of these events, a severance agreement may function less as goodwill and more as an effort to resolve a potential retaliation claim quietly.
Pressure, Deadlines, and Manufactured Urgency
Another red flag is a sense of manufactured urgency. Your employer might insist you sign immediately, hint that the offer will disappear, or claim the document is standard and non-negotiable. While deadlines are common, pressure is not.
Certain employees, particularly those over age 40, are entitled to statutory review periods before waiving age-related claims. Even when those protections do not apply, no executive is required to sign a severance agreement on the spot or without careful review.
Hidden Career Consequences Beyond the Payout
Broad confidentiality and non-disparagement clauses in severance agreements can limit what you can say about your departure, even if the company later controls the narrative about your exit. For senior leaders, this can directly affect professional reputation and future opportunities.
Some agreements also include aggressive non-solicitation provisions that restrict contact with former colleagues or clients. While California limits the enforceability of many post-employment restrictions, the language itself can still stunt career mobility.
Looking Past the Dollar Amount
After the shock of being let go, a severance check can feel like a lifeline. However, the true cost is not always obvious. What matters is not what you are getting, but what you might be giving up. For any executive, understanding that trade-off is critical. That severance agreement may be doing more than helping you move on. It might be helping your former company get away with wrongful termination.