Employment separation agreements are enacted between an employer and their soon-to-be former employee. These agreements can help protect a company from liability while providing the employee with certain benefits. However, if you plan to use a California employment separation agreement, it needs to comply with all applicable state and federal laws.

Because California has some of the strongest worker protections in the nation—and because employment laws often change on both the state and federal levels—it’s important to research and draft your separation agreement accordingly. Otherwise, you could expose your company to significant risk. Fortunately, SixFifty helps organizations generate compliant, customized documents in every state.

What is a CA employment separation agreement?

A California employment separation agreement can be used to set terms when employment ends. Instead of them quitting or being fired, which are one-sided decisions, a separation agreement is mutual. Both parties receive a benefit, and both parties are entitled to negotiate for more favorable terms.

California employers often use separation agreements to protect themselves from liability. For instance, they may ask an employee to waive their right to sue under certain statutes in exchange for a significant severance package.

Keep in mind that separation agreements are not mandatory. Employers are not required to offer one, and employees are not required to sign the agreement. Finally, if your separation agreement runs afoul of California or federal law, it could be rendered unenforceable in whole or in part.

Benefits of using a California employment release agreement

Employment separation agreements offer several benefits. Employers primarily use them to limit their liability regarding any claims which may have arisen prior to the agreement. They can also include other agreements, such confidentiality provisions to protect certain company information, even after the employee leaves the organization.

Employees, on the other hand, typically receive severance packages upon signing an agreement. This might be financial compensation, extended healthcare, a neutral reference agreement, and other benefits. The severance benefits are the consideration, or compensation, required to ensure that a contract is enforceable.

Finally, separation agreements can help employer and employee part ways on amicable terms. Instead of quitting or being abruptly terminated, both parties can negotiate terms and decide on a mutually agreeable employment end date.

Employment termination agreement sample

When drafting a California employment separation agreement, the agreement must explicitly list the claims the employee releases under state and federal law. In California, these claims may include wrongful termination in violation of public policy, breach of contract, breach of the implied covenant of good faith and fair dealing, privacy violations, defamation, intentional infliction of emotional distress, and discrimination and harassment claims under California’s Fair Employment and Housing act.

Furthermore, employees may waive claims based on state, local, or municipal employment discrimination laws, both known and unknown. However, California state law requires that if an employer is including known and unknown claims, they must include a clause that explicitly waives California Civil Code Section 1542. There must also be independent evidence that the employee intended to release unknown claims. Many employers choose to include the regulatory language to ensure they are providing all the requisite information.

This sample California employment separation agreement is from CalCPA. It contains an explicit list of claims the employee is releasing, including a waiver of Section 1542. Note that the agreement also includes a non-disparagement provision, a confidentiality provision, and key clauses regarding healthcare coverage. This is a good example of how certain California state requirements may be used in a separation agreement—but it is by no means a one-size-fits-all agreement that will apply to every employer or employee.

How to create a CA employment separation agreement

When you’re ready to create your own California separation agreement, you have a few options. First, you can research the laws and draft your own agreement. That can be time-consuming and may not cover all the important provisions. Second, you can hire an attorney—but that’s expensive as well as time-consuming. Third, you can roll the dice with other people’s templates.

Instead of racking up billable hours or putting yourself in legal risk, let SixFifty do the heavy lifting for you. Our Employment Docs platform is designed to guide employers through every stage of the employment lifecycle, from hiring to termination. You can generate top-tier California employment separation agreements quickly and cost-effectively. Plus, our legal team keeps a close eye on employment legislation nationwide. Rest assured that when you generate an employment separation agreement or other employment document, it’ll be current with all state and federal laws.

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