If you were just laid off, you may still be trying to process what happened. One day you were part of a corporate team, and the next you were told your position was eliminated and handed a severance package you are expected to review quickly. In moments like this, employees often feel pressure to accept the first offer without understanding how California severance negotiation after layoffs really works.
I’m Matt Ruggles, and I’ve been practicing employment law in California for more than 30 years. I’ve negotiated countless severance agreements for every type of California employee, from front-line workers to C-suite executives.
Recent large-scale layoffs, including Target’s decision to cut thousands of corporate roles, have made it clear that even highly skilled professionals in finance, tech, marketing, HR, and operations can be forced out suddenly. When this happens, most people have no idea whether their severance offer is fair, whether it can be negotiated, or whether they have any legal leverage at all.
I wrote this blog to help California employees understand the basics of severance negotiation after layoffs, including why you should not assume the first offer is final, how to recognize the kinds of legal leverage that can increase your payout, and what steps to take before signing anything.
If you were just laid off and given a severance agreement, call me before you sign. I review these agreements every week and can help you understand your leverage. Reach me at the Ruggles Law Firm at (916) 758-8058.
If your layoff happened suddenly and you are unsure about your next move, read my blog: I Just Got Fired: What Should I Do Right Away to understand the first steps that protect your rights.
Section 1: Why Layoffs Are Increasing and What It Means for Your California Severance Negotiation After a Layoff
Target’s recent decision to eliminate approximately 1,800 corporate positions and close 800 open roles is not a one-off corporate move. It is part of a broader economic trend. Corporations across industries are tightening budgets in response to slower consumer spending, revised earnings forecasts, and shareholder expectations for higher efficiency and lower payroll costs. When this happens, white-collar employees are increasingly among the first to be cut, even if they have years of strong performance.
For most employees, the emotional cycle unfolds quickly.
Shock: “I did not see this coming.”
Fear: “How will this affect my income and my career?”
Urgency: “I need financial security as fast as possible.”
Risk: “I should probably sign whatever they are offering and just move on.”
That final step is usually where people lose the most money.
Employees often assume that because they were part of a layoff, there is nothing they can do except accept the deal placed in front of them. Meanwhile, the company has already run the numbers with its HR team and legal counsel, preparing a package that protects the employer first. In this phase of panic and confusion, many people sign away valuable claims, stock rights, or additional compensation without understanding their full position.
In more than 30 years of negotiating severance agreements for California employees, I have seen the early panic stage consistently lead to the smallest payouts and the weakest legal protections. The initial emotional shock often causes people to agree to terms that could have been negotiated for significantly more value.
If you want to understand how timing affects your leverage during layoffs, read my blog: How to Maximize Your Severance Offer in California.
Section 2: Why the First Offer in a California Severance Negotiation After Layoffs Is Almost Never Final
One of the most damaging assumptions employees make during layoffs is believing the severance package they receive is fixed and non-negotiable. California law does not define any “standard severance.” Employers create each offer with their legal and financial teams to minimize liability and reduce costs as much as possible. This is why California severance negotiation after layoffs is rarely a take-it-or-leave-it situation.
There Is No Such Thing as a Standard Severance Offer in California
When employers call a severance package “standard,” they are using that label to create a false sense of uniformity and fairness. They want employees to believe everyone receives the same offer and that negotiating would be unreasonable or inappropriate. In reality, employers draft severance agreements to protect themselves from future legal claims, and they determine what they are willing to pay based on the level of risk they believe you pose.
Why “Non-Negotiable” Severance Offers After Layoffs Are Meant to Pressure You
HR representatives often describe severance agreements as “non-negotiable” to create urgency and discourage pushback. They know that employees who feel uncertain, anxious, or inexperienced in negotiation are more likely to accept less than they may be entitled to.
If an employer tells you your severance agreement is non-negotiable, that is completely false; to understand why and how to respond, read my blog, Non-Negotiable Severance in California: 5 Myths Dispelled by a Lawyer.
California Employers Often Expect Negotiation After a Layoff
Most companies expect employees to negotiate, especially when they have long tenure, strong performance records, access to sensitive internal information, or potential legal claims such as discrimination, retaliation, or unpaid compensation. In many cases, the first offer serves as the employer’s opening position, and they are ready to improve it when properly challenged.
To understand how to approach negotiation like a professional and recognize opportunities to push back, read my blog: How to Negotiate Severance Like an Employment Lawyer.
Section 3: Mistakes That Ruin California Severance Negotiation After Layoffs (and How to Avoid Them)
The first 72 hours after a layoff are when most employees lose the most leverage. Fear, shock, and confusion often drive rushed decisions that weaken their ability to negotiate a stronger severance. These are the most common mistakes I have seen employees make immediately after a termination meeting. Avoiding these missteps is critical in any California severance negotiation after layoffs.
Mistake #1: Signing a Severance Agreement Too Quickly After a Layoff
Employers rely on emotional panic to push employees into signing before they fully understand what they are giving up. Signing prematurely can permanently waive legal claims, stock rights, unpaid bonuses, or future negotiation opportunities.
Mistake #2: Believing Layoffs Eliminate Your Legal Rights in California
Employers may call a termination a “restructuring” or “position elimination,” but that does not free them from legal exposure. Layoffs may still involve unlawful discrimination, retaliation, WARN Act violations, or unpaid wage issues.
Mistake #3: Publicly Announcing Your Layoff Before Negotiating Severance
When employees announce they are unemployed, they often weaken their leverage by signaling vulnerability. Employers may assume the employee will accept any offer just to move on, which reduces the incentive to improve compensation.
Mistake #4: Threatening Legal Action Without a Strategy or Attorney
Employees who declare they plan to hire a lawyer without a strategy in place often trigger the company’s legal team prematurely. This can make the employer more guarded before the employee fully understands their leverage.
Mistake #5: Taking HR Conversations at Face Value During Severance Negotiation
HR may sound supportive, but they work to protect the company’s interests. The severance agreement they present is designed to limit the employer’s risk, not to maximize the employee’s financial outcome.
To better understand how these mistakes reduce severance value and weaken negotiation strength, read my blog: 7 Employee Mistakes That Ruin Severance Negotiations.
Employers already have legal teams protecting their interests. You deserve someone protecting yours. If you were laid off and need help evaluating or negotiating your severance package, call the Ruggles Law Firm at (916) 758-8058. I will walk you through your options, identify potential legal leverage, and help you negotiate from a position of strength.
Section 4: Where Legal Leverage Comes From in California Severance Negotiation After Corporate Layoffs
Many employees assume they lose all leverage once the company lays them off. In reality, employers often offer severance because they want to eliminate legal exposure. The amount of leverage you have depends on how much legal and reputational risk the company believes you present if you choose not to sign.
Here are the most common sources of leverage in California layoffs:
Source #1: Legal Leverage from FEHA Retaliation or Discrimination After Layoffs
If you reported discrimination, harassment, disability accommodation issues, or unfair treatment before the company laid you off, your employer may face liability under the Fair Employment and Housing Act (FEHA). The California Civil Rights Department (CRD) enforces the FEHA and can award back pay, emotional distress damages, and attorney’s fees in retaliation claims.
To get a clear overview of how the FEHA protects you against discrimination, harassment, or retaliation in the workplace, read my blog: FEHA: How It Protects California Employees.
California Labor Code §1102.5 also protects employees who report illegal activity, wage violations, safety concerns, or regulatory misconduct. The California Labor Commissioner’s Office enforces this whistleblower statute and may hold employers legally accountable when they retaliate through layoffs. These protections often increase the employer’s risk and create strong leverage during severance negotiations.
When layoffs occur shortly after protected complaints or reports, employers frequently increase severance to avoid retaliation claims, which often become some of the most costly and damaging cases they face.
Source #2: WARN Act Violations Can Strengthen California Severance Negotiation After Layoffs
Under California’s WARN Act, certain employers must provide at least 60 days’ notice before conducting large-scale layoffs. When employers fail to meet these requirements, employees may qualify for back pay and penalties. This legal exposure often motivates employers to offer stronger severance packages.
Source #3: Suspicious Termination Timing as a Leverage Point
If your termination closely follows protected conduct such as requesting medical leave, reporting misconduct, or asking for accommodations, the timing may suggest retaliation. Employers often improve severance terms to avoid legal scrutiny or the appearance of unlawful termination.
If you filed a complaint and were later fired, you may have a wrongful termination claim based on workplace retaliation. To learn more about this subject, read my blog, Is Being Fired After Filing a Complaint Considered Wrongful Termination?
Source #4: Equity, Bonuses, and Contract-Based Leverage in Severance Negotiations
Executives and employees with stock plans, bonus agreements, commission structures, or employment contracts may have additional compensation rights if the company terminates them without cause. Employers often try to minimize or ignore these contractual rights in the first severance offer, which opens the door for negotiation.
Source #5: Why Public Reputation Risk Motivates Employers to Offer More Severance
Large consumer-facing employers, such as Target, actively try to avoid reputational harm when layoffs appear unfair or retaliatory. When employees have raised protected concerns or appear to belong to legally protected groups, the threat of negative publicity often drives employers to increase severance payouts to protect their brand.
If you want to understand why employers often pay more when there is a risk of discrimination or retaliation under the FEHA, read my blog: Wrongful Termination Lawsuits Under the FEHA: A Costly Gamble for Employers.
To better understand how to identify leverage and use it to strengthen your severance outcome, read my blog: How To Use Leverage in Severance Negotiation.
Section 5: What California Employers Are Really Buying in a Severance Package After Layoffs
A severance package is not a gift. The employer is entering into a business transaction where it buys something from you in exchange for money and limited benefits. To negotiate effectively, you must understand what is actually on the table and how each term can be improved. This awareness is key to maximizing results in California severance negotiation after layoffs.
Here are the most common elements inside a severance package and why they matter:
Term #1: Lump Sum vs. Salary Continuation in California Severance Packages
Employers may offer a lump sum or choose to spread payments over time. A lump sum gives you certainty and immediate financial security. Salary continuation may keep your benefits active longer, but the employer often attaches conditions, such as ongoing compliance with company directives.
Term #2: Why the Legal Release Is What California Employers Are Really Paying For
The employer is not paying you for past work. It is paying for your agreement not to sue. The release of claims is the core reason employers offer severance. When there is risk of legal exposure under the FEHA, the Labor Code, whistleblower statutes, or WARN Act violations, this release becomes significantly more valuable to the employer.
Term #3: How Confidentiality and Non-Disparagement Clauses Affect Your Severance Rights
Employers frequently include provisions that restrict what you can say about the company and sometimes attempt to limit future competitive activity or solicitation of clients or employees. These terms can affect your career prospects and reputation if you do not negotiate them carefully.
Term #4: Health Coverage, PTO Payouts, and Equity Rights in California Severance Agreements
Employers may offer temporary health insurance support through COBRA or agree to pay out accrued PTO. However, they often try to minimize or overlook issues involving unvested stock, performance bonuses, or long-term incentive plans, even when you may already have a legal right to a portion of those benefits.
Term #5: Why Severance Terms After Layoffs Are Only a Starting Point for Negotiation
Employers typically draft severance agreements as starting points that favor their interests. In many cases, you can negotiate improvements in financial compensation, benefits continuation, equity treatment, reference language, and confidentiality or non-disparagement restrictions.
To better understand each clause that typically appears in a severance agreement and how to negotiate them, read my blog: All Common Severance Agreement Clauses Explained.
Section 6: What to Do (and Not Do) Before Signing a Severance Agreement After a Layoff in California
Once you receive a severance agreement, the way you respond can significantly affect your final outcome. Employers often expect employees to react emotionally and accept the offer quickly. When you take deliberate, informed action, you prevent costly mistakes and increase your leverage.
What you SHOULD do:
- Stay calm and review everything carefully. Emotional reactions often lead employees to make rushed decisions. When you remain objective, you can evaluate your options strategically.
- Gather key documents. Collect offer letters, compensation plans, performance reviews, stock agreements, emails involving complaints or accommodations, and any proof of bonuses or commissions owed.
- Request time to review the agreement. California employees over age 40 often receive at least 21 days to consider a release agreement and seven days to revoke a signed agreement. Even when employers are not legally required to offer additional time, employees can typically request it.
- Speak with an employment lawyer before responding. A lawyer can identify leverage you may not see, prevent missteps, and develop a negotiation strategy that creates legal risk for the employer.
What you should NOT do:
- Do not sign in panic just to move on. Once you sign, most severance agreements cannot be undone, and you may lose valuable legal claims or financial rights.
- Do not negotiate emotionally or guess at your leverage. Without understanding legal exposure, you may ask for too little or present arguments that weaken your position.
- Do not disclose your next steps or appear desperate. When employees tell HR they urgently need the money or announce plans to hire a lawyer without a strategy, they often lose credibility.
- Do not share details publicly or on social media. Public announcements can weaken your negotiation leverage and complicate legal strategies.
To understand how early decisions affect your ability to negotiate, read my blog: How Do I Avoid Mistakes When Negotiating a Severance Agreement?
Section 7: Why Hiring a California Severance Lawyer Can Increase Your Payout After a Layoff
Severance agreements do not exist to reward past service. Employers use them to protect themselves from legal exposure. When you negotiate on your own, the company typically evaluates you as someone unlikely to challenge them legally. Once an employment lawyer becomes involved, the employer must reassess that risk and often increases what they are willing to offer. Legal representation often changes the trajectory of California severance negotiation after layoffs.
Here is why legal representation changes everything:
Reason #1: Employment Lawyers Identify Leverage Employees Overlook
An employment lawyer knows how to identify legal violations that increase the employer’s risk. These may include retaliation under the FEHA, wrongful termination, whistleblower claims, WARN Act violations, unpaid wage or commission claims, misclassification issues, or equity triggers hidden in contracts. Each of these can justify a stronger severance demand.
Reason #2: Severance Is a Legal and Financial Transaction, Not an HR Courtesy
HR may present severance as a courtesy or standard policy, but the employer’s true objective is to secure a legal release of claims. A lawyer reframes the negotiation around liability, contract terms, and legal exposure, which shifts the discussion from internal “policy” to potential litigation.
Reason #3: Legal Representation Triggers a Different Response from Corporate Counsel
Once a lawyer becomes involved, internal legal teams immediately treat the negotiation more seriously. They understand that a poorly structured agreement or inadequate offer may result in lawsuits, costly discovery, or public claims of unlawful termination.
Reason #4: DIY Severance Negotiation Signals Low Legal Risk to Employers
Employees who negotiate on their own often rely on fairness-based arguments that carry little legal weight. Employers can easily recognize when someone lacks the legal ability or willingness to escalate the dispute, which leads to weaker offers and minimal concessions.
Reason #5: Legal Strategy Converts Panic into Negotiation Power
When a lawyer presents a structured argument backed by legal claims, the employer must weigh financial exposure. This often leads the company to increase severance pay, improve treatment of bonuses or equity, offer stronger reference protections, and provide more favorable confidentiality or non-disparagement language.
When you are ready to hire legal counsel but want to make sure you choose the right person to negotiate your severance, read my advice: How Do I Select a California Employment Lawyer?
To see how legal strategy affects outcomes in real-world scenarios, read my blog: How to Negotiate Severance Like an Employment Lawyer.
Section 8: Key Outcomes of a Successful California Severance Negotiation After Layoffs
A strong severance negotiation does more than increase your payout. It secures financial stability, protects your reputation, preserves your future career opportunities, and prevents the employer from pursuing restrictive terms or future disputes. A successful outcome must check multiple boxes, not just one.
Here are the key results a well-negotiated severance agreement should achieve:
Goal #1: Maximize the Financial Payout of Your California Severance
The severance amount should increase based on your tenure, performance history, the legal exposure the employer wants to avoid, and any contractual triggers tied to termination without cause.
Goal #2: Preserve or Accelerate Bonuses, Commissions, and Equity
If you have rights to bonuses, commission payouts, or stock vesting under certain conditions, the negotiation should evaluate and preserve those rights wherever possible. In some cases, the negotiation can accelerate or partially recover unvested equity.
Goal #3: Negotiate Employer-Paid COBRA or Insurance Support
Because health insurance is often a major concern during job loss, strong negotiation should secure extended employer-paid COBRA coverage or supplemental payments that offset healthcare costs.
Goal #4: Protect Your Reputation and Secure Neutral References
Your severance agreement should protect your reputation throughout future hiring processes. Strong negotiation often results in reference language, restrictions on negative internal disclosures, and mutual non-disparagement protections.
Goal #5: Avoid Career-Limiting Restrictions in Severance Agreements
Overly broad non-compete, non-solicitation, or confidentiality provisions can limit your ability to continue working in your field. You should review and narrow these terms where necessary to protect your career mobility.
Goal #6: Ensure the Severance Agreement Is Clear and Enforceable
Ambiguous or poorly drafted terms often lead to future conflict, especially concerning performance bonuses, cooperation requirements, or confidentiality obligations. Strong negotiation should produce a severance agreement that provides clarity and legal certainty.
To see how real employees have secured better outcomes through strategic negotiation, read my blog: Examples of Successful Severance Negotiation.
Key Takeaways for California Employees Facing Severance After a Layoff
- A severance offer functions as a legal transaction, not a thank-you for past work.
- Employers use severance agreements to buy legal protection, which means the terms are negotiable in most California severance negotiations after layoffs.
- You may have leverage if your layoff followed discrimination complaints, FEHA-protected activity, whistleblower reports, WARN Act violations, unpaid compensation issues, or equity triggers.
- Signing too quickly can cause you to give up legal claims, stock rights, unpaid bonuses, and future negotiation opportunities.
- If you publicly announce your layoff or negotiate emotionally, employers may assume you will accept a lower offer without pushing back.
- When a lawyer enters the negotiation and outlines legal exposure, employers often reassess risk and improve the severance offer.
- A successful California severance negotiation after layoffs should result in higher pay, stronger reference terms, protection for bonuses or equity, better health benefits, and fewer career restrictions.
- Your actions in the first few days after receiving a severance offer can significantly influence the final outcome.
Section 9: FAQs About California Severance Negotiation After Corporate Layoffs
FAQ #1: Do I still have leverage in a California severance negotiation after a layoff?
Yes. Layoffs do not erase legal exposure for employers. Even when a termination is labeled a “position elimination,” there may still be violations of the FEHA, whistleblower laws, WARN Act notice requirements, unpaid wage or commission issues, or equity rights that trigger upon termination. These legal risks can create powerful leverage in severance negotiations.
FAQ #2: Can I negotiate my severance if the company says it is non-negotiable after a corporate layoff like Target’s?
Yes. “Non-negotiable” is often a psychological tactic meant to discourage pushback. In reality, most employers expect some negotiation, especially when the employee may have legal claims or contractual rights at stake. A lawyer can determine whether the offer reflects your actual leverage under California law.
FAQ #3: What if I already signed my severance agreement after being laid off in California? Can I still challenge it?
In some situations, you may still have a limited right to revoke, especially if you are over age 40 and the employer did not comply with Older Workers Benefit Protection Act timing rules. Outside of revocation windows, signed agreements are often difficult to undo unless there was fraud, coercion, or withheld information.
FAQ #4: Is severance pay required under California law after layoffs?
No. Employers are not legally required to provide severance pay in California. However, companies frequently offer severance after layoffs to secure a legal release and minimize the risk of litigation. The fact that severance is voluntary is exactly why negotiation matters. If they are paying for your release, the value can often be increased.
FAQ #5: Can I negotiate a severance package if I am over 40 and laid off in California?
Yes. Employees over 40 often receive at least 21 days to review a severance agreement and 7 days to revoke their signature. This extended timeline gives more room to evaluate potential age discrimination or FEHA retaliation issues, which may increase negotiation value.
FAQ #6: Do I need a lawyer for California severance negotiation after a layoff, or can I negotiate on my own?
You are not legally required to hire a lawyer, but negotiating on your own rarely produces the best outcome. Without legal representation, employers may assume you will not pursue litigation, which reduces your leverage. Employment lawyers identify legal violations, quantify risk, and apply pressure in a way employees typically cannot.
FAQ #7: Should I update LinkedIn or announce my layoff publicly before negotiating severance?
No. Publicly announcing your layoff may weaken your bargaining position by making you appear desperate or easily replaceable. It is generally better to complete your California severance negotiation after a layoff before changing your public employment status.
FAQ #8: What if I worked in tech, finance, or another competitive industry…does my severance negotiation change after layoffs?
Yes. Certain industries, especially tech and executive roles, often involve stock vesting schedules, RSUs, equity acceleration, confidential intellectual property, and non-solicitation concerns. These issues must be reviewed carefully to preserve financial value and protect your future employment options.
To understand how negotiation strategy shifts based on your role and industry, read my blog: How to Negotiate Severance in California’s Tech Industry.
If you are facing a severance decision after a layoff, do not go through the process alone. I have practiced employment law in California for over 30 years and have negotiated severance agreements for employees at every level, from hourly workers to executives. Call the Ruggles Law Firm today at (916) 758-8058 for a confidential review of your situation and a strategy session on how to move forward.
Conclusion: You Have More Power Than You Think
A layoff can feel like the ground just shifted under you, especially when you are immediately handed a severance agreement and told you need to act quickly. But receiving an offer does not mean the company has all the power. In most cases, it is simply their opening position.
Your severance package is not automatically fair or final. With the right legal strategy, many California employees discover they have more leverage than they realized, especially when legal risk or contractual rights are involved.
Do not let urgency or uncertainty push you into signing before you understand your full position. When you work with someone who knows how to negotiate severance agreements in California, you gain control of the process instead of reacting to it.
Contact the Ruggles Law Firm at 916-758-8058 to Evaluate Your Severance Offer
Matt Ruggles has a thorough understanding of California severance agreements and decades of practical experience litigating employment law claims in California state and federal courts. Using all of his knowledge and experience, Matt and his team can quickly evaluate your potential claim and give you realistic advice on what you can expect if you sue your former employer.
Contact the Ruggles Law Firm at 916-758-8058 for a free, no-obligation evaluation.
Blog posts are not legal advice and are for information purposes only. Contact the Ruggles Law Firm for consideration of your individual circumstances.
