The moment you are handed a severance package can stop you in your tracks. One minute you are processing the shock of losing your job, the next you are staring at a dense legal document full of deadlines, waivers, and promises that sound official but are written to protect the company, not you. Most employees are told the same line: “This is standard.” “It’s non-negotiable.” The truth is, almost every initial severance agreement can be improved. If you want to maximize your severance offer, the key is knowing where your leverage is and how to use it.
I’m Matt Ruggles, and for more than 30 years I have helped employees and executives throughout California negotiate stronger and smarter severance agreements. I have seen every version of this process: some that ended in major wins, and others where people gave up leverage they did not even realize they had. I wrote this guide because too many employees walk into severance negotiations blind, and one wrong move can cost them months of pay, unvested stock, or their professional reputation.
This blog outlines five proven strategies that consistently help California employees maximize their severance offers, along with the five most common mistakes that can destroy a good negotiation before it begins. Each strategy is drawn from real-world cases and tested in negotiations against some of the largest employers in the state.
The goal here is simple: when you finish reading, you’ll understand not just what to negotiate, but why it works. You’ll see how to recognize hidden leverage, how to spot and counter the lowball tactics employers use to rush signatures, how to protect yourself from the quiet traps buried in their ‘standard’ agreements, and how to leave with your reputation and legal rights intact.
Why Leverage Matters Most When You Maximize Your Severance Offer in California
A severance negotiation is are not about fairness; it’s about leverage.
That is the first truth most employees miss. The company is not paying you severance because it feels bad or wants to reward loyalty. It is paying to solve a problem: the termination of your employment without any post-termination problems (e.g. a lawsuit).
That problem is risk. When a company hands out severance, it is trying to buy peace and certainty and therefore eliminate risk. Your departure could trigger legal exposure, bad publicity, disruption inside the team, or a future claim they do not want to defend. Severance is how they pay to make those risks go away.
From the company’s point of view, severance is not a thank-you gift. It is a business transaction. They are purchasing your signature on a release of claims that protects them from being sued. They are paying for you to walk away quietly, to hand back company property, to keep trade secrets confidential, and to agree not to damage their reputation.
If you represent no risk and create no discomfort, there is no incentive for them to increase the initial severance offer. But if your situation exposes them to legal, reputational, or operational pain (risk), the calculation changes. The more legitimate or prospective risk you represent, the more the severance payment tends to go up.
If you’ve just been handed a severance agreement, don’t go it alone. Contact the Ruggles Law Firm at (916) 758-8058 to talk with me before you sign anything.
Here are the most common forms of leverage that actually move the needle:
Leverage Type #1: Legal Risk to the Employer in California Severance Negotiations
The risk of a potential lawsuit is the strongest and most reliable form of leverage. If your employer violated California or federal law regarding your employment or termination, that exposure creates a financial risk they will want to neutralize. Claims of discrimination, retaliation, harassment, or unpaid wages are the heavy hitters here.
California’s employment laws give employees powerful rights under the Fair Employment and Housing Act (FEHA) and the Labor Code. For example, if you were fired after reporting unsafe conditions, objecting to illegal conduct, or requesting a medical accommodation, that may trigger protection under Labor Code section 1102.5 or Government Code section 12940, et seq. When those facts exist, the employer knows that cutting a larger severance check is cheaper than defending a lawsuit.
If you want to understand how legal risk translates into bargaining power, read my blog “How to Use Leverage in Severance Negotiation,” where I explain how even a potential claim can change the company’s entire risk calculation.
Leverage Type #2: Reputation Concerns That Influence Severance Offers
Employers, especially high-profile ones, care deeply about optics. They do not want former employees talking about unfair treatment or discrimination on LinkedIn, Glassdoor, or in the industry grapevine. I have seen companies double their offers simply to make a quiet problem go away.
If you have a visible role or strong network, that is leverage. Use it wisely. Mention your preference for a professional, private resolution rather than threats of publicity. That signals you are reasonable, but that you also understand the stakes.
Leverage Type #3: Institutional Knowledge That Strengthens Your Severance Leverage
If you are the person who manages key accounts, controls critical systems, or carries institutional knowledge no one else has, the company will want a clean transition. That is leverage.
In one case I described in “How to Negotiate an Executive Severance Package: Real Case Study of Success”, the client’s control over marketing data systems gave him quiet but enormous power. We used that to negotiate months of extra pay and accelerated stock vesting. The lesson is simple: the harder you are to replace, the more leverage you have.
Keep this in mind: it is never appropriate to publicly disclose confidential and/or proprietary trade secret information of your employer in order to gain an advantage in a severance negotiation. Even an improper threat to do so can flip an otherwise promising severance negotiation on its head, resulting in potential personal liability for the offending employee.
Leverage Type #4: Timing and Company Pressure When Negotiating a Severance Offer
Timing is one of the most underestimated tools in negotiation. When the company is under financial stress, merging, or reducing staff, decision-makers want closure fast. Their goal is to keep the layoff cycle clean and avoid new legal headaches. If you know the company is pushing to finalize layoffs or restructure before quarter-end, that time pressure can work in your favor.
For executives or senior managers, this often ties into negotiated exits. As I explain in “Negotiated Exits for Executives in California: How to Secure a Smart Departure,” approaching the company before termination, while you still have influence and access, creates the strongest negotiating position. Once you are out the door, your leverage decreases.
Leverage Type #5: Credibility and Preparation That Maximize Leverage in Severance Negotiations
Leverage only matters if the other side believes you know how to use it. Employers spot the difference between an emotional reaction and a well-prepared counter. When you can identify the legal exposure, cite the relevant contracts, agreements or policies, and articulate your value calmly, they recognize that you are not guessing. You are negotiating.
This is why I always tell people: do not go it alone. Consult an employment lawyer before making any response to an initial severance offer. A short consultation can surface leverage points you did not know existed. I covered this in “California Severance Agreements: Why You Must Act Fast and Hire a Lawyer,” which explains why timing and counsel can be the difference between a weak payout and a strong one.
When it comes to severance, fairness does not win. Facts, law, timing, and leverage do. Once you understand where your leverage comes from, you can negotiate from strength instead of fear. The rest of this guide will show you how to use those leverage points to maximize your severance offer and avoid the mistakes that cost employees real money.
5 Strategies to Maximize Your Severance Offer in California
Strategy #1: Common Legal Violations That Create Leverage in California Severance Negotiations
California has some of the toughest employment laws in the country. When companies ignore them, they create legal risk, and risk equals leverage.
Violation Type #1: Retaliation or Whistleblower Claims That Increase Severance Leverage
If you were fired, demoted, or treated differently after raising a concern about illegal or unsafe practices, you may have a claim under Labor Code section 1102.5 or Labor Code section 6310. These laws protect employees who report unlawful conduct or unsafe working conditions.
This includes everything from calling out falsified reports or billing irregularities to telling management that a workplace hazard is being ignored. Even internal complaints, those made to HR or a supervisor, count as protected activity if the complaint concerns illegal activities, an unsafe workplace or opposition to conduct prohibited by the FEHA or the Labor Code.
Employers fear these claims because whistleblower retaliation carries steep penalties and can expose them to public scrutiny. Many employers would rather write a check than defend against one of these cases in court.
Violation Type #2: Discrimination or Harassment Under California’s FEHA
The Fair Employment and Housing Act (FEHA) prohibits discrimination and harassment based on protected categories such as disability, age, gender, and race, and many others.
For instance, if you were targeted for termination after requesting a reasonable accommodation, returning from medical leave, or raising a concern about unfair treatment, that falls under the FEHA and could be illegal retaliation. These claims can justify significant severance increases because the damages include emotional distress, lost wages, and even punitive damages.
You do not need to prove a full-blown lawsuit to use this leverage effectively. Simply showing that you understand how the FEHA works can shift the balance in your favor.
For more information on your rights under California’s Fair Employment and Housing Act, visit the California Civil Rights Department (CRD)
Violation Type #3: Unpaid Wages and Commission Violations That Affect Severance Offers
If your employer failed to pay all wages, bonuses, or commissions earned before termination, you may have a claim under Labor Code sections 201–203. Late payment triggers waiting time penalties worth up to 30 days of wages.
In some industries, especially sales and tech, employers also make illegal “chargebacks” or clawbacks of commissions after termination. I explain how to identify and calculate these unpaid wages in “How to Calculate an Effective Severance Pay Demand.”
When the company knows its payroll practices won’t hold up under scrutiny, the company ordinarily is more motivated to resolve the claim.
Violation Type #4: Disability Accommodation and Retaliation Violations Under California’s FEHA
California’s Fair Employment and Housing Act (FEHA) requires employers to provide reasonable accommodation to employees with disabilities or medical conditions that affect their ability to perform their jobs. Employers must also engage in a good-faith interactive process to explore solutions that allow the employee to keep working safely and effectively.
When an employer ignores a request for accommodation, refuses to discuss options, or terminates the employee instead of working through that process, it’s a violation of the FEHA. The same applies if the employee is punished or fired soon after requesting an accommodation or medical leave, that may be retaliation, and it may create strong legal leverage in severance negotiations.
If you were terminated, disciplined, or ignored after requesting an accommodation, the employer may have violated the FEHA. I see this constantly: employees punished for being injured or for needing time to recover. That is not just unethical, it is illegal.
These cases carry strong leverage because juries react poorly to employers who mistreat injured workers, and employers know it.
Violation Type #5: Promissory Fraud or False Recruitment Promises in California Employment
A less obvious but powerful claim arises when the company induces you to take a job under false pretenses. Under California Civil Code section 1709 and Labor Code section 970, this can qualify as promissory fraud or fraudulent inducement.
If you were recruited with promises of long-term employment, specific job duties, or financial incentives that vanished after you started, you may have a case. For example, being hired for a management role and then quickly reassigned or terminated once you relocate or turn down another offer can establish this claim.
I have seen employers use “bait and switch” hiring tactics to fill short-term needs. When that happens, we treat it like what it is, fraud, and it becomes a strong leverage point in severance negotiations.
Why Legal Claims Are the Strongest Leverage to Maximize Your Severance Offer
Employers fear lawsuits not because they think they will lose every case, but because they know how expensive and public they can become. The mere existence of a credible claim changes the risk calculus.
When I contact opposing counsel, I make that clear. Litigation does not just cost money; it costs time, morale, and reputation. A fair severance is the cheaper option. Even if you never plan to sue, showing that you recognize your rights and can articulate specific legal violations immediately changes the conversation.
You are no longer the employee hoping for a favor. You are a legal risk the company needs to resolve.
Practical Steps for California Employees to Strengthen Legal Leverage in Severance Negotiations
- Document your timeline. Write down every key event: your complaint, any HR meetings, and when retaliation began.
- Save proof. Keep copies of emails, texts, or messages that show you made a protected complaint or that promises were broken.
- Consult counsel early. Once you sign the release, you lose your leverage. A short consultation can uncover claims worth far more than your initial offer.
If you want to understand how legal and business leverage combine in real-world cases, read “How to Negotiate an Executive Severance Package: Real Case Study of Success,” which breaks down how one client used documented violations to double his payout.
Before you accept what the company offers, let’s talk about what they’re really paying for. Call the Ruggles Law Firm at (916) 758-8058 to make sure you’re not leaving money on the table.
Strategy #2: Emphasize Your Value to Maximize Your Severance Offer
Most employees underestimate how much value they carry out the door. If you want to maximize your severance offer, start by understanding how difficult it will be for the company to replace you. The harder that replacement is, the more leverage you have.
Companies do not pay severance because they suddenly feel generous. They pay because they want control over the transition. When you hold key knowledge, client trust, or technical know-how, you have something they need, and they will pay for it.
Why Demonstrating Your Value Helps Maximize Your Severance Offer
When the company realizes that losing you will cause disruption, delay, or embarrassment, it changes the dynamic. They may start out treating you as replaceable. The moment they see that you are not, the conversation shifts from “take it or leave it” to “what will it take to make this clean?”
I have seen this countless times. In one case described in “How to Negotiate an Executive Severance Package: Real Case Study of Success,” an executive’s control over client data systems and vendor relationships gave him quiet but decisive leverage. The employer’s top priority became a smooth exit, not a cheap one. The result was months of additional pay and accelerated stock vesting.
The principle is the same whether you are a senior executive, project lead, or key technical contributor. The employer wants you to leave without chaos. Your knowledge is leverage.
Types of Institutional Knowledge That Increase Leverage
Not all value is measured in dollars. Sometimes it is what you know that no one else does. These are the most common leverage points:
- Client and vendor relationships. If customers or vendors deal with you directly, the company will want those relationships handed off carefully.
- Proprietary systems or processes. If you built or maintain workflows that others depend on, losing you could mean months of disruption.
- Regulatory or compliance expertise. In fields like healthcare, finance, or tech, one knowledgeable employee leaving abruptly can expose the company to serious risk.
- Team stability. If your departure could cause others to leave or demoralize a team, that matters. Employers will quietly pay more to keep morale intact.
Each of these gives you leverage not because you threaten to use it, but because the company knows the consequences if you walk out cold.
How to Use Your Value Strategically to Maximize Your Severance Offer
This part is critical. Do not volunteer your value too early. Most employees hand over their leverage by offering help before any negotiation begins. That is a mistake.
Use your institutional knowledge as a bargaining chip, not a gift. Here is how:
- Document your impact. Make a short list of the systems you manage, key accounts you service, or projects only you can complete. Bring it up only if the company resists improving your offer.
- Offer limited transition support. A short consulting period, one or two weeks at an agreed hourly rate, can justify higher severance while showing professionalism.
- Protect boundaries. Never agree to unlimited access or unpaid assistance after your termination date. If they want your help, they can pay for it.
In “Negotiated Exits for Executives in California: How to Secure a Smart Departure,” I explain how this same principle applies at higher levels. A well-timed offer of cooperation signals professionalism and keeps the negotiation businesslike. It tells the company, “I am willing to help you, but not for free.”
Why This Strategy Works
At its core, this is about shifting from employee mindset to business mindset. You are not begging for severance; you are negotiating a contract that benefits both sides. The company wants continuity and peace of mind. You want fair compensation for the value you built.
When you show them what they stand to lose, you replace emotion with logic. That is how leverage works.
Strategy #3: Leverage Timing and Business Pressures to Maximize Your Severance Offer
Timing is one of the most overlooked tools in severance negotiation. If you want to maximize your severance offer, pay attention not just to what is happening with you, but to what is happening with your employer.
Companies make financial decisions under pressure. When they are in the middle of layoffs, mergers, or leadership changes, their top priority is to close the book on potential problems quickly and cleanly. The more they need the situation resolved, the more leverage you have.
The worst mistake you can make is thinking you are negotiating in a vacuum. You are not. You are negotiating in the middle of the company’s own timeline, and understanding that clock can change everything.
Why Timing Changes Leverage
Employers like control. Anything that threatens to disrupt their schedule such as delays in closing layoffs, bad optics before a merger, or the risk of a complaint during a restructuring creates anxiety. Severance money is how they buy certainty.
I have seen this play out hundreds of times. In one case I described in “Negotiated Exits for Executives in California: How to Secure a Smart Departure,” a senior manager realized the company was about to announce a major reorganization. By approaching the employer first and proposing a clean, confidential exit, he shifted the negotiation in his favor. The company paid more because it wanted one less loose end before the announcement.
The same logic applies at every level. When the company has deadlines, leverage moves to your side of the table.
Situations Where Timing Works in Your Favor
Here are the most common circumstances that create negotiating power through timing and business pressure:
Situation #1: Company Restructures or Layoffs
When the company is downsizing or reorganizing, management wants quiet exits and no legal mess. A single wrongful termination claim can delay a whole layoff cycle. If you know you are part of a larger reduction, that urgency becomes your leverage. You are offering them a quick, clean resolution.
Situation #2: Mergers, Acquisitions, or Leadership Changes
During transitions, new leadership wants a clean slate. They are under pressure to finalize severance and avoid drama from the old regime. If you are being pushed out after new management takes over, they will often pay more to close the door behind you.
Situation #3: Financial Stress or Public Scrutiny
If the company is struggling financially or facing bad press, it cannot afford more instability. The last thing it wants is a public dispute with a former employee. I have seen employers under financial review or media attention increase severance offers simply to avoid the risk of negative attention.
How to Use Deadlines Wisely to Maximize Your Severance Offer
Never rush to sign. Pressure to sign quickly is often a tactic to limit your leverage. Under federal law (the Age Discrimination in Employment Act (ADEA)), employees over 40 who receive a severance tied to an age-discrimination release must be given at least 21 days to review the agreement. Even if you are younger, always request additional time.
Use that time strategically:
- Pause before responding. Employers expect an immediate reaction. Delaying your response signals that you are thinking critically and possibly consulting counsel.
- Set your own timeline. If the company is in a hurry, use that urgency to push for better terms. “I can review and respond within the week if we can address a few key items.”
- Do not bluff deadlines. If you claim to have other job offers or immediate plans, make sure it is credible. Credibility is what turns timing into leverage.
Recognizing Company Urgency
The signs are rarely subtle. Watch for clues like:
- HR suddenly pushing for a same-day signature.
- Management mentioning “company transitions,” “budget deadlines,” or “upcoming announcements.”
- References to “needing to wrap things up this quarter.”
Those statements are gold. They tell you the company has internal pressure. That pressure is worth money.
If you can spot these signs and stay calm, you will control the pace instead of reacting to theirs.
Turning Timing into Strategy
Sometimes the way to maximize your severance offer is to wait. Other times, it is to strike first. If you know your role is being eliminated or your department is about to restructure, approaching the company before they act can put you in control.
This approach, known as a negotiated exit, is one of the smartest plays in employment law. It lets you propose your own terms while the company still needs your cooperation. I explain exactly how this works in “Negotiated Exits for Executives in California: How to Secure a Smart Departure,” which applies even if you are not in an executive role.
The earlier you act, the stronger your position. The later you act, the more leverage you lose.
Strategy #4: Negotiate Beyond Money to Maximize Your Severance Offer in California
When most people think of severance, they focus on the dollar amount of the severance payment. That is a mistake. Cash is important, but it is only one part of the negotiation. A severance agreement is a contract, and the real value often lies in the details buried behind the check.
If you want to maximize your severance offer, you need to look past the headline number. Many of the best terms have nothing to do with the base payout. They are the benefits that protect your future, reduce your costs, and keep your career intact.
Why Cash Alone Is Not Enough
I have seen employees walk away with decent severance pay only to discover that the agreement cost them far more in lost benefits and future opportunities. They got a check but signed away their health coverage, stock options, and their right to speak freely about what happened.
That kind of one-sided deal is preventable. A complete severance negotiation considers everything that touches your financial stability and your professional reputation. When you treat the agreement as a package, not a paycheck, you walk away in control instead of in debt.
Non-Cash Terms That Add Real Value
Here are the key non-cash terms that can make or break a severance package:
Non-Cash Term #1: Continued Health Insurance Contributions (COBRA)
Health coverage is one of the simplest things to negotiate and one of the most valuable. Under COBRA, you can continue your existing health plan after termination, but the cost often jumps dramatically because the employer stops contributing.
A smart severance negotiation includes continued employer contributions for the duration of your severance period. For example, if you are receiving four months of severance pay, request four months of employer-paid COBRA coverage. It costs the company less than cutting a bigger check but can save you thousands of dollars.
Non-Cash Term #2: Stock Options, RSUs, and Bonus Eligibility
If you are close to a bonus payout, stock vesting, or profit-sharing date, bring it up. Many employees assume that once they are terminated, they lose those benefits automatically. That is not always true.
Employers sometimes have discretion to accelerate vesting or treat bonuses as earned through your termination date. In “How to Negotiate Executive Severance Agreement Terms,” I explain how equity, deferred compensation, and milestone bonuses can be negotiated even after separation. The key is to know the schedule and raise the issue before signing the release.
If the company refuses acceleration, consider requesting partial vesting or a cash equivalent. Even a small adjustment here can be worth far more than an extra week of pay.
Non-Cash Term #3: Neutral Reference and Non-Disparagement Clauses
Your professional reputation is part of your compensation, whether you realize it or not. A hostile or silent reference can derail future job opportunities. A neutral reference clause ensures that if future employers call, HR will confirm only your dates of employment and title, nothing more.
Pair that with a mutual non-disparagement clause, which prevents both sides from badmouthing the other. This is especially important if you were in a public-facing or leadership role. Protecting your reputation can matter more than a few thousand dollars on a severance check.
I discuss this in “Boost Your Executive Severance Pay: Demand Letter Tactics,” where we used a mutual non-disparagement agreement to safeguard a client’s reputation after a contentious termination. That single clause preserved his career prospects and peace of mind.
Non-Cash Term #4: Outplacement and Transition Support
Outplacement services i.e. career counseling, résumé assistance, or job search support are often overlooked but can be included in larger companies’ severance policies. If you are leaving a high-visibility role, these services help you re-enter the market faster.
Even if the company does not offer them upfront, you can request reimbursement for outplacement expenses as part of your negotiation. Employers like these terms because they look professional and cost little compared to legal risk. Additionally, former employers generally want former employees to quickly become reemployed at a subsequent employer because it significantly reduces the risk that a lawsuit will develop because the former employee is focused on the employee’s new job, not what happened at the former employer.
Non-Cash Term #5: Non-Compete and Confidentiality Adjustments
In California, non-compete clauses are generally unenforceable under Business and Professions Code section 16600, et seq., but companies still include them in severance agreements. Do not ignore them.
Ask that any non-compete, non-solicitation, or overly broad confidentiality language be removed or narrowed. A few words in a contract can limit your ability to work for competitors or talk about your experience. Fixing that upfront is worth more than any short-term payout.
How to Negotiate These Terms Effectively
You will not get what you do not ask for. The key is to present these requests as part of a fair, businesslike exchange, not as a wish list.
Here is how to approach it:
- Group your requests. Present all of your proposed changes together so the employer can see the full package, not isolated demands.
- Prioritize impact. Lead with the items that matter most, usually health coverage, equity, and references.
- Stay professional. Framing your requests as practical solutions for both sides keeps the discussion constructive. For example: “This will make the transition smoother for everyone.”
Employers appreciate calm, organized requests because they signal competence and reduces friction. That professionalism can translate directly into a stronger offer.
Strategy #5: Work with an Experienced Employment Attorney to Maximize Your Severance Offer
Every employer already has lawyers. Usually more than one. They do not make a single move in a termination or severance process without running it past legal counsel first. When employees try to handle their own severance negotiations, they are walking into a game that is already stacked against them.
If you want to maximize your severance offer, you have to level the playing field. The only way to do that is to bring in someone who knows the playbook and has spent years using it against them.
Why You Need an Employment Lawyer (and Not Just Any Lawyer)
A severance negotiation is not a generic legal matter. It is a specialized area of employment law that blends contracts, wage statutes, discrimination protections, and negotiation psychology. A criminal defense lawyer or a family lawyer may not see the leverage points that matter here.
The difference between a general practitioner and a focused employment lawyer is the same as the difference between a professional chess player and a grandmaster. The company’s counsel has likely negotiated hundreds, if not thousands, of severance agreements. They know every clause, every loophole, every emotional pressure point.
For you, this is probably the first time. For them, it is Tuesday.
And yes, you might think, “Of course a lawyer would say you need a lawyer.” Fair point. But I’m not telling you this as a sales pitch. I’m telling you because I’ve seen what happens when people go it alone. They sign away stock rights, waive potential claims, and agree to restrictions that cripple their future job prospects. Once you sign that release, there is no second chance.
The cold truth is this: trying to negotiate a severance without an experienced employment attorney is like trying to perform your own surgery. You might survive it, but it probably won’t go well.
What an Employment Attorney Actually Does for You
A good employment lawyer does not just “look over the paperwork.” In order to maximize your severance offer, they identify and use the leverage the employer is trying to hide. Here’s what that means in practice:
Advantage #1: Spotting Hidden Leverage
Employment lawyers know how to read between the lines. They can see the legal risks the company’s HR department hopes you never notice, retaliation exposure, wage issues, misclassification errors, or potential FEHA violations.
In “How to Use Leverage in Severance Negotiation,” I explain that the strongest leverage often lies in the facts the company least wants to discuss. An experienced lawyer will find those weak spots and use them to increase your payout.
Advantage #2: Protecting You from Hidden Traps
Most severance agreements include clauses that look harmless but aren’t. Overbroad confidentiality terms, non-disparagement clauses, and “return of property” provisions can strip away rights you never meant to give up. A lawyer recognizes these traps instantly and rewrites them to protect you.
For executives or high earners, this includes reviewing stock vesting, deferred compensation, and non-compete language, topics I cover in “How to Negotiate Executive Severance Agreement Terms.” Without legal review, you could unknowingly forfeit tens of thousands of dollars.
Advantage #3: Negotiating Your Severance Package from Strength
Once counsel is involved, the tone changes. The company realizes it cannot run the playbook it uses on unrepresented employees. When a demand letter arrives from an employment attorney, the employer’s risk calculation shifts overnight.
I explain this in “Negotiated Exits for Executives in California: How to Secure a Smart Departure.” The minute the company knows you have legal representation, the conversation more often is about resolution, not pressure to go away.
Cost and Payment: How California Severance Lawyers Work
Many employees hesitate because they assume hiring a lawyer will cost too much. The truth is, most experienced employment attorneys, including me, handle severance reviews on a contingency or partial contingency basis. That means you often pay nothing upfront. The attorney only earns a percentage of any improvement they negotiate.
This setup keeps the incentives aligned i.e. you only pay if you benefit. And when you have an attorney who knows what leverage points to push, the improvement in your severance payment is more likely.
The Cold Hard Truth
You are not on equal footing with your employer. They have counsel who wrote the agreement, reviewed it, and prepared the talking points HR will use to walk you through it. You have a few days and a lot of emotion.
If you try to negotiate alone, you are playing their game by their rules. Bringing in an employment attorney does not guarantee a miracle, but it guarantees you stop losing by default.
I have spent more than 30 years negotiating against employers who use the same tactics over and over. They count on employees to be intimidated, tired, or unaware of their rights. Once you bring in counsel who knows their playbook, everything changes. The tone changes. The numbers change. The respect changes.
That is not ego talking. That is just my experience.
5 Most Common Mistakes in California Severance Negotiation
Mistake No. 1: Signing the California Severance Package Too Quickly
The biggest mistake employees make is signing the severance agreement too fast.
The company wants that signature before you have time to think. HR will smile, tell you the offer is “standard,” and hand you a deadline designed to make you nervous. They’ll say things like, “We’d like to wrap this up today” or “We can’t hold this offer open forever.” That’s not urgency, that’s their strategy.
Once you sign, you give up all leverage. You waive every legal claim, every negotiating point, and every chance to improve the terms. It’s game over.
Employers know most people have never seen a severance agreement before. They know you’re emotional, caught off guard, and worried about income. They’ve done this hundreds of times. You haven’t. When you sign too fast, you’re walking right into the system they built for you.
I’ve seen employees lose tens of thousands of dollars this way. They later realize they waived claims for unpaid wages, discrimination, or retaliation, claims that could have doubled their payout. But by then, it’s too late. A signed release is nearly impossible to undo.
Why Employers Push California Employees to Sign Quickly
Companies apply pressure for a reason: the more time you have, the more likely you’ll discover your leverage. That’s why the first version of the severance agreement always favors the employer, it’s written by their lawyers to protect them, not you.
I explained this in “How Do I Avoid Mistakes When Negotiating a Severance Agreement,” where I break down how employers rely on employee hesitation to close deals fast. It’s not personal. It’s procedural.
They’ve likely consulted legal counsel before even handing you the document. You, on the other hand, might be reading it for the first time under fluorescent lights with an HR rep waiting for your reaction. That imbalance is exactly what they’re counting on.
What You Should Do Instead to Maximize Your Severance Offer
- Slow down. You are legally entitled to time to review. If you’re over 40, federal law gives you at least 21 days to consider the offer when it includes an age-discrimination release. Even if you’re under 40, you can and should ask for more time.
- Consult a lawyer before you sign. A short review by an employment attorney can identify illegal clauses, missing compensation, or hidden leverage.
- Ask yourself what the company gains by rushing you. If they need your signature today, it’s probably because you have more leverage than you think.
Mistake No. 2: Failing to Assess Legal Claims
Most employees assume their termination was “just business.” They don’t stop to ask whether it was legal. That’s a costly mistake.
In California, many terminations violate labor or discrimination laws, but the violations are often hidden under polite HR language like “position eliminated” or “restructuring.” Employers rely on that. If you don’t recognize a potential legal claim, you’re handing away leverage you didn’t know you had.
Why Overlooking Legal Claims Costs You Money
Severance agreements exist for one main reason: to make you sign away your right to sue. That release of claims is what the company is actually buying. The more exposure they have, the more they’re willing to pay to close the file.
When employees skip the legal review, they miss the leverage entirely. I’ve seen people accept lowball offers when their facts supported serious claims under California’s Fair Employment and Housing Act (FEHA), Labor Code section 1102.5 (whistleblower protection), or wage laws. They could have negotiated far higher payouts if they had known.
The worst part is that once you sign, it’s over. Even a clear violation won’t matter if you’ve already released the claim.
Common Claims Employees Miss in California Severance Offer Negotiations
- Retaliation or Whistleblower Complaints
If you reported unsafe working conditions, illegal practices, or violations of law and were fired shortly after, that’s retaliation and it’s protected under Labor Code section 1102.5.
Many employees think they were let go for “performance” when in reality, their employer was cleaning house before the issue drew attention. In “How to Use Leverage in Severance Negotiation,” I explain that retaliation claims carry enormous leverage because they expose the company to attorney’s fees and civil penalties.
- Discrimination or Harassment Under the FEHA
Terminated soon after disclosing a medical condition, requesting an accommodation, or taking medical leave? That’s not coincidence. It may violate the FEHA’s disability protections.
California law requires employers to engage in a good-faith interactive process to accommodate disabilities. When they don’t, or when they fire you instead, they’ve likely broken the law. Those facts can easily double or triple a severance payout when properly handled.
- Wage and Hour or Commission Violations
Unpaid wages, delayed final paychecks, or reversed commissions often violate Labor Code sections 201–203. I covered this in “How to Calculate an Effective Severance Pay Demand,” where unpaid wages and penalties significantly increased the client’s severance value.
Employers who owe money under wage laws know those claims are black-and-white. They pay to make them disappear.
- Promissory Fraud and Misrepresentation
Sometimes the legal claim starts long before the termination. If you were recruited with false promises i.e. a role, bonus, or advancement that never materialized, that can qualify as promissory fraud under Civil Code section 1709 and Labor Code section 920. When companies lure employees across the state or from stable jobs and then cut them loose, that’s leverage.
How to Avoid This Mistake
- Get a legal review before you sign anything. An employment lawyer can spot potential claims quickly and calculate how they affect your bargaining position.
- Map the timeline. Write down when key events happened: complaints, accommodations, reviews, warnings, and termination. The order matters.
- Look for inconsistencies. If your performance suddenly “declined” after you spoke up, or if your role changed right after medical leave, that’s a red flag.
As I explain in “California Severance Agreements: Why You Must Act Fast and Hire a Lawyer,” the sooner you identify these issues, the stronger your position becomes. Waiting too long or signing too early erases your chance to use them.
Mistake No. 3: Focusing Only on Salary Continuation
When employees hear the word “severance,” most think about one thing: the paycheck. They ask how many weeks or months of salary they’ll get and stop there. That narrow focus costs people money every single day.
If you want to maximize your severance offer, you have to think bigger than salary continuation. Severance pay is just one piece of a larger agreement that includes benefits, stock, reputation, and legal protection. Limiting your ask to the cash amount means leaving value on the table and that is value the company is more than willing to keep.
Why Salary Alone Misses the Real Value
Companies expect you to fixate on the number. They know most employees have never negotiated a severance before, and “weeks of pay” feels concrete and safe. But severance is a contract, not a tip. And contracts are where the real money hides.
In “How to Negotiate Executive Severance Agreement Terms,” I explain that for many employees, especially those with equity, bonuses, or seniority, the non-cash terms often outweigh the base payout. Extended health coverage, bonus eligibility, or even stock vesting can easily add the equivalent of months of salary.
When you focus only on salary continuation, you give the company permission to shortchange you everywhere else.
What You Might Be Overlooking
A well-structured severance agreement should address your financial, professional, and legal future. Here are the areas most employees miss:
- Health Insurance Contributions (COBRA)
Once you’re terminated, your health coverage doesn’t automatically continue. Under COBRA, you can stay on your company plan, but at full cost. That can mean thousands of dollars per month. Always request that the employer continue paying its share of health premiums during the severance period. They’ll often agree because it’s cheaper for them than adding more weeks of pay.
- Stock Options, RSUs, and Bonuses
If you’re close to a vesting date or bonus payout, bring it up. In many cases, companies can accelerate vesting or treat bonuses as earned through your termination date. I’ve used that leverage to add tens of thousands to a package, as described in “Boost Your Executive Severance Pay: Demand Letter Tactics That Work”. The key is to identify these items before you sign away your rights.
- References and Reputation
Your future employability has real financial value. A neutral reference clause i.e. one that limits HR to confirming only your title and dates of employment, can protect your professional credibility. Pair that with a mutual non-disparagement clause so neither side badmouths the other. In some cases, that single paragraph is worth more than an extra month’s pay.
- Retirement and Deferred Compensation
If you have 401(k) matches, deferred bonuses, or other employer-funded benefits, confirm how those will be handled. Too many employees assume those benefits continue automatically. They don’t.
How to Expand the Severance Negotiation
Here’s the mindset shift: stop thinking about severance as a lump sum and start thinking about it as a package of moving parts.
- Make a checklist. List every financial or professional interest affected by your departure including insurance, stock, commissions, reputation, references, and benefits.
- Rank by value. Figure out what matters most to you. For one person, it’s cash. For another, it’s healthcare or a clean reference.
- Negotiate the total package. Present your requests together, not one at a time. That shows professionalism and helps the company see the deal as a complete solution.
This approach works because it speaks the company’s language: risk and closure. The more cleanly they can resolve your exit, the more they’ll pay for it.
Mistake No. 4: Not Documenting Your Contributions
In severance negotiations, talk is cheap and documentation is leverage.
Employers respond to facts, not feelings. If you can show what you accomplished, what revenue you drove, or what projects you delivered, you immediately shift the tone from emotional appeal to business justification. That’s the kind of evidence that makes them think twice about lowballing you.
Without proof of your value, your argument for a better package sounds like wishful thinking. With proof, it sounds like risk management.
You don’t need a presentation deck. Start by listing key contributions that tie directly to business results such as revenue growth, efficiency gains, cost savings, or client retention. Pull emails, performance reviews, and metrics that show your impact. These materials don’t just validate your worth; they also remind the company what they stand to lose if they mishandle your exit.
In one executive negotiation I handled, we documented eight years of measurable contributions including market share growth, revenue expansion, leadership during restructuring and that alone doubled the initial severance offer. Employers negotiate harder when they know you can prove your value.
If you want to maximize your severance offer, start by building your own evidence file. Facts speak louder than any lawyer’s letter.
Mistake No. 5: Attempting Severance Offer Negotiation Without Legal Advice
Most employees make one critical error: they try to negotiate a severance on their own. They read a few articles online, write a short demand email, and hope the company plays fair. When it doesn’t work, that’s when they call me…usually after they’ve already said or signed something that can’t be undone.
Here’s the problem. Every severance agreement you’ll ever see was written by the company’s lawyers. It’s designed to protect the employer, limit exposure, and get your signature as cheaply as possible. HR may sound friendly, but they are not neutral. Their job is to close your file without risk.
When you go it alone, you’re stepping into a legal negotiation where the other side has already been coached, prepared, and protected. You’re reacting to their process instead of controlling it.
Why Going It Alone Almost Never Works
Without counsel, you miss the two things that actually create leverage: legal risk and strategic pressure. You don’t know what potential claims exist, how strong they are, or how to present them without tipping your hand. The company’s lawyers do.
I have seen employees try to bluff their way through a negotiation, make an informal “counter,” and then get ghosted by HR. Once that happens, the employer has the upper hand. They’ve already documented your rejection of the offer and have no reason to increase it later.
And yes, you might think, “Of course a lawyer would say that.” Fair. But this isn’t about ego. It’s math. Employers do this dozens or hundreds of times a year. You do it once, maybe twice in a lifetime. The odds aren’t on your side.
I covered this in [How to Use Leverage in Severance Negotiation], where I explain that companies respond differently the moment a lawyer enters the picture. The tone changes. The conversation becomes professional, not personal. They stop treating you like a liability they can manage and start treating you like a risk they need to resolve.
What Happens When You Get Counsel Involved
A good employment lawyer knows exactly what the company is afraid of and how to use that information to increase your payout. They can identify hidden legal claims, revise restrictive clauses, and communicate with the employer in language that gets results.
Even the first call from counsel sends a message: you’re no longer negotiating from emotion. You’re negotiating from knowledge.
And in many cases, you don’t have to pay up front. Most experienced severance lawyers work on a contingency or partial contingency basis meaning their fee depends on how much they improve your offer. If you walk away with nothing more, you owe nothing more.
Final Thoughts About How to Maximize Your Severance Offer in California
In California, severance pay is not legally required in most situations, but that doesn’t mean you can’t negotiate for more. The key is leverage: understanding what the employer values, what risks they face, and what you can reasonably ask for.
By using these five strategies, avoiding common mistakes, and seeking legal advice when needed, employees can often increase severance pay and improve the overall terms of their exit.
If you’ve been offered a severance package in California, don’t go it alone. At Ruggles Law Firm, we focus on protecting employees’ rights and maximizing severance outcomes.
Contact the Ruggles Law Firm at 916-758-8058 to Evaluate Your Potential Lawsuit
Matt Ruggles has a thorough understanding of California employment laws 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.
