If you are wrongfully terminated andyour employer makes you sign a form waiving lawsuit rights in order to receive a severance package, is that legal?

UPDATED: Dec 5, 2011

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If you are wrongfully terminated andyour employer makes you sign a form waiving lawsuit rights in order to receive a severance package, is that legal?

A previous employer terminated me for not meeting standards, which I dispute. Upon termination, they presented me with a form stating that if I don’t sign the form, I would be able to pursue legal action, but would not receive a severance package. If I signed the form, I would receive the severance package but would not be able to pursue legal action. I’m just curious if there is any grounds for legal action due to the fact that this company has a history of terminating associates in large numbers, quite frequently.

Asked on December 5, 2011 under Employment Labor Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

It is perfectly legal to offer an employee severance or other payment in exchange for signing a release, giving up the right to sue...and not only is it legal, it is quite common. A company would typically not offer severance unless by so doing, it could insulate itself from liability; otherwise, it would pay the employee money which it was not required to, while leaving itself open to a lawsuit for more, something which is hardly in its interest. Before signing, consult with an employment attorney about your situation--you can see whether you would have a case for wrongful termination or not, what it might be worth, and what  it might cost to pursue it, so you can make an informed decision as to whether to sign or not. Good luck.

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