What is a Severance Agreement, and How Does It Work?

Mar 31, 2023 | Tips on Contracts

A severance agreement is a legally binding document between an employer and an employee that outlines the terms and conditions of the employee’s departure from the company. This agreement typically comes into play when an employee is terminated or laid off from their job.

The purpose of a severance agreement is to provide the employee with certain benefits – such as financial compensation or continued access to health insurance – in exchange for their agreement to waive any legal claims against the employer. In other words, the employer agrees to provide the employee with certain benefits in exchange for the employee agreeing not to sue the company for wrongful termination or other legal claims.

Severance Agreement Terms & Provisions

The terms of a severance agreement can vary widely, depending on the circumstances of the employee’s departure and the company’s policies.

Some common provisions that may be included in a severance agreement include:

  • The amount of severance pay the employee will receive, if any
  • The length of time the employee will be eligible to receive continued health insurance coverage
  • A non-disclosure clause that prohibits the employee from sharing confidential information about the company
  • A non-compete clause that restricts the employee from working for a competitor for a certain period of time
  • A release of claims clause that requires the employee to waive any legal claims against the company

It’s important for both the employer and the employee to carefully review the terms of a severance agreement before signing it, and to seek legal advice if necessary. Once signed, a severance agreement is generally binding and enforceable, so it’s important to make sure that all parties fully understand the terms and implications of the agreement.

Learn More about Severance Agreements in CA

Contact Gallagher Krich APC, attorneys at law at (858) 926-5797 or by email at info@tomgallagherlaw.com for more information about a severance agreement in the State of California. Keep reading on California severance agreements here ›

Gallagher Krich, APC is a San Diego, California, based law firm. Attorney Tom Gallagher is responsible for this attorney advertising. This article does not establish an attorney-client relationship, which requires a written agreement.

Contact our California lawyers today at (858) 926-5797 or fill out our Contact Form.

Latest News & Updates

Meet Our San Diego Attorneys

Thomas F. Gallagher, Esq.

Troy B. Krich, Esq.

Contact Gallagher Krich, APC

What Clients Say:

Mike K., Google

Rated 5.0 out of 5
August 11, 2023

Thank you so much for all your help in resolving a real estate matter so quickly and efficiently.

Mike K
Verified

What Clients Say:

Jonas Y., Google

Rated 5.0 out of 5
December 28, 2022

If you need a “ Closer”, go see Troy. Troy has been one of the best attorneys I have ever worked with. I don’t typically give reviews but after the last case Troy helped me settle out of court, I won’t hesitate to use Troy again! Thanks for all you do Troy !

Jonas Y
Verified

What Clients Say:

Daniel E., Google

Rated 5.0 out of 5
October 11, 2022

I left a voicemail for Tom late Sunday evening and received a phone call first thing the next morning.

Tom was very quick to reply to any questions I had, and if he was caught up in a meeting, he was sure to return my call promptly.

Tom provided sound and logical advice, during a very stressful and uncertain time. At times I asked him to be more aggressive and was often met with the pros and cons of that decision, allowing me to understand the approach and thought process behind his strategy.

Ultimately he provided options for several paths for us to take, worked swiftly, and got us where we needed to be.

He reached out several times to check on my sanity and make sure I was good.

As someone with very high expectations, I would highly recommend his services. He provided expertise that proved to be successful, and also took the time to make sure I was emotionally solid.

Tom assisted with me with a 50% / 50% ownership conflict.

Daniel E
Verified

What Clients Say:

Deanna, LawConnect.com

Rated 5.0 out of 5
February 23, 2022

Really informative and actionable, very grateful to have connected and I look forward to working more with them in the future.

Deanna
Verified

What Clients Say:

Marilyn, LawConnect.com

Rated 5.0 out of 5
February 8, 2022

i liked that a lawyer, and not a staff member, called me to get the details and he gave me his opinion of what his initial thoughts are about my case.

Marilyn
Verified

What Clients Say:

Bob W., Google

Rated 5.0 out of 5
August 30, 2021

What was thought to be a simple breach of contract turned into a nightmare. Through their tenacity and their deep knowledge of the law, we were successful. There is no reason to look any further as you will not get any better representation than this firm. I highly recommend them and strongly suggest that if you are considering starting a business or are already managing one, this firm will guide you, avoiding the troubled waters businesses sometimes find themselves in.

Bob W
Verified

What Clients Say:

Rasmita M., Google

Rated 5.0 out of 5
August 13, 2021

Johnny Nitti helped us with our estate plan. He was very meticulous while drafting the plan and spent enough time to explain the details to us. He filed the deed with county recorder and paid for the fees himself. Overall, Johnny did a great job and we definitely plan to work with him in the future for any updates to our EP.

Rasmita M
Verified

What Clients Say:

George A., Google

Rated 5.0 out of 5
August 7, 2021

Johnny Nitti helped me with my estate planning (will, living trust, etc.) and made the process smooth. He is very responsive and organized. I highly recommend contacting Johnny.

George A
Verified

What Clients Say:

Ashley C., Google

Rated 5.0 out of 5
July 18, 2020

Tom Gallagher is very knowledgeable and helpful when it comes to business law. I reached out to him reguarding the Pandemic and my salon and I’m so glad I did. Many times stress and hard times can fog clarity and he really helped me understand the laws.

Thanks Tom!!!

Ashley C
Verified

What Clients Say:

Evan D., Google

Rated 5.0 out of 5
July 16, 2019

Thank you Troy for everything! Professional, prompt, and smooth handling of my case. I will be recommending to anyone that is in need of a lawyer.

Evan D
Verified