Most California employees facing a severance agreement have no idea what to do next. Is it negotiable? How much is fair? How aggressive should you be? In that confusion, many fall into employee severance negotiation mistakes right away and those errors destroy leverage before real negotiations even begin.
I’m Matt Ruggles, a California employment attorney with over 30 years of experience negotiating severance agreements. I’ve represented everyone from frontline workers to C-suite executives and helped them turn weak offers into strong severance packages using California employment laws.
Over the years, I’ve taken calls from desperate employees who already tried to negotiate on their own and got nowhere. By the time they reach out, they’ve already damaged their leverage, made emotional arguments, demanded unrealistic numbers, or written amateur demand letters that employers used against them.
This blog exists for one reason: sometimes the best way to learn how to negotiate severance is to understand what not to do. Below are the seven most common employee severance negotiation mistakes I see every week and how they can destroy your leverage before real negotiation even begins.
If you’ve been placed on a Performance Improvement Plan and want to know whether it’s a warning or a setup for termination, read my blog: Performance Improvement Plan (PIP) – An Employee Guide.
If you want to understand the strategies that actually increase the value of your severance, read my deep dive severance negotiation paper called: How to Maximize Your Severance Offer in California
7 Employee Severance Negotiation Mistakes California Workers Must Avoid
Negotiation Mistake #1: Early Severance Demands Before Legal Advice Destroy Leverage
The most common mistake terminated employees make is to make an initial demand for an increased severance payment before gathering their information or getting competent legal advice. Employers are prepared and trained to respond to initial requests by immediately rejecting the demand without any counter-offer; in so many words, the employer will tell the employee the initial severance offer is a “take it or leave it” situation.
Employers do this because they know that you will not be able to effectively mount a valid legal claim, or anything else, without the help of a qualified attorney. As a result, on-the-spot negotiations almost always fail. So do demands that come very quickly after termination and are grossly inflated. In other words, your initial demand (if you do it yourself) will almost certainly fail. This is one of the most common employee severance negotiation mistakes that destroys leverage early.
If you’re thinking about writing your own severance demand letter, read my post: How Do I Write a Severance Pay Demand Letter?
If you’ve just been fired and don’t know what to do next, take my advice in this post: I Just Got Fired – What Should I Do Right Away?
How Employers Exploit Employee Inexperience to Reduce Severance Leverage
That initial mistake puts you in a very weak position. Here’s why: the employer already made the difficult decision to terminate your employment and offer you some amount of severance. Strike One. After learning of your termination, you made a ridiculous, uninformed and poorly worded severance demand that went absolutely nowhere. Strike Two.
How Emotional Severance Demands Destroy Legal Leverage
No one wants to be at bat with 2 strikes down because there is a very high risk of striking out. But when you act quickly or impulsively, or even worse, emotionally, you are giving the employer exactly what it’s hoping for: a struggling, worried and confused person that just lost his/her job, and has almost no idea what to do next.
Losing Leverage Forces Employees to Accept Low Severance Offers
In more colorful terms, think of it like this: when the employer fires you they are stabbing you in the back; when they deny your initial severance demand, the employer is twisting the knife lodged in your back. Obviously, with a knife being twisted in your back (i.e. your future is in disarray because of your termination and the employer is dangling a low payment that they know you need), your negotiation leverage is completely compromised, and your odds of success are just about gone. You will wind up accepting the initial severance offer after considerable frustration, confusion and time. Bottom line: an initial severance demand without the assistance of an attorney almost never works.
If you’re not sure what leverage actually is or how to use it to in employee severance negotiation, read this comprehensive explanation in: How to Use Leverage in Severance Negotiation.
I’ve increased severance payouts by millions for California employees who came in after getting lowballed. If you’re negotiating alone, the odds are already stacked against you. Call the Ruggles Law Firm at 916-758-8058 before you give them any more advantage.
Negotiation Mistake #2: Playing Lawyer Without Knowing California Employment Law
Trying to write your own demand letter “like a lawyer” never works for one basic reason: you have no idea what you are doing, and everyone that reads your letter will instantly know it. Here’s why:
Reason #1: You’re Not Qualified to Present a Legally Persuasive Case
Watching “Suits” doesn’t qualify you to practice law. Neither does Google. Legal research isn’t something you can do on your lunch break. It requires specialized (and very expensive) software, years of training, and the experience to know what works in court. Almost no one, regardless of the person’s level of education or expertise some other field, can write like a lawyer that any opposing attorney is unable to detect. In other words, when you “act like a lawyer” you look sort of ridiculous to all the real lawyers, and it doesn’t motivate anyone to pay you more severance.
Reason #2: Lacking Legal Strategy Leads to Weak Severance Arguments
You don’t know what’s persuasive. You don’t know what’s credible. And no, ChatGPT can’t do it for you either. Trying to play lawyer is like entering the Indy 500 with a blindfold on. It’s not bold, it’s reckless.
Reason #3: Not Understanding California Employment Law Destroys Severance Leverage
Let’s be honest: beyond that fact that it prohibits discrimination, harassment and retaliation (if you know that), you have no idea what the California Fair Employment and Housing Act (FEHA) actually says, how it is applied, or what any of the terms in the statute actually mean because it’s very complicated. In reality, many employment lawyers are confused by the FEHA.
How Lack of California Legal Knowledge Weakens Severance Negotiations
You might justifiably believe you were wrongfully terminated, but that doesn’t mean you understand how to assert a valid claim under the FEHA that might actually work. If you don’t understand the FEHA, the burden of proof shifting framework for a FEHA-based claim, how to link relevant facts to a legal standard under the FEHA, and how to deflect any adverse facts, you’re not going to scare anyone!! Instead, you are going to look uninformed, unorganized, and sort of silly, honestly. Any lawyer can tell when a non-lawyer has written a letter to look like a lawyer. I’m serious because it’s 100% obvious, trust me.
Bottom line: when you try to write a letter like a lawyer, you’re just giving them more rope to hang you with.
If you’re not sure what rights the FEHA gives you or how it protects California employees from discrimination, retaliation, and harassment, read my explanation: FEHA: How It Protects California Employees.
If you want to understand how wrongful termination claims under FEHA create serious legal exposure for employers, read my case analysis: Wrongful Termination Lawsuits Under FEHA: A Costly Gamble for Employers.
Negotiation Mistake #3: Unrealistic Severance Demands Show You Lack Legal Leverage
This is the most common mistake. You ask for some wildly inflated number, say10, 20, even 30 times what’s realistic, based on nothing but what sounds “fair” to you. But severance agreement negotiation isn’t about fairness. It’s about legal leverage, risk, and how damages are calculated. If you don’t understand wrongful termination damages (including the difference between economic and non-economic damages, and the limitations/restrictions on both), you have no idea where the negotiation range even is. You’re picking a number out of thin air and your former employer knows it. That’s not a threat. That’s noise.
This kind of misstep is one of the more frequent employee severance negotiation mistakes California workers make. It almost never works.
If you want to understand how severance pay is actually calculated, check out my guide: Severance Pay Demand: How to Calculate Effectively.
Negotiation Mistake #4: DIY Severance Demand Letters Backfire Under California Law
Unless you’re a lawyer, your letter is going to read like it was written by a sixth grader. That’s how it looks when it lands in the hands of a real lawyer. You won’t know what to say, what not to say, or where the pressure points are. And worse, you’ll say too much of the wrong thing and not enough of the right thing. You don’t know how to construct the argument because you don’t understand the balancing act that goes into presenting a credible threat. These letters fail almost every time. And not 50% of the time, but virtually every single time. It’s one of the most damaging employee severance negotiation mistakes you can make.
Want to learn how a severance demand letter should actually be written for successful California severance negotiation? Read my blog: How Do I Write a Severance Pay Demand Letter?
Panicked emails and amateur demand letters cost people real money. If you’re already second-guessing your approach, call the Ruggles Law Firm at 916-758-8058 and get strategic before the employer writes you off.
Negotiation Mistake #5: Oversharing in Severance Demand Letters Can Harm Your Case
Long, rambling, overly detailed letters don’t get read: they are too long, too boring, and normally completely unorganized. Most of the time, the company is going to read one or two pages, and conclude you are totally unrealistic and out of your mind, and decline to negotiate.
As noted above, a poorly written demand letter is particularly ineffective. Legal departments scan them and know instantly: this person is no threat because they obviously are not getting legal advice and obviously do not understand the law or procedure that applies to the alleged claim (if you can even manage to allege a valid claim, which most people cannot do). And that’s if the letter even makes it to the right person. But here’s the real kicker: if you ever file a lawsuit, that bloated letter you were so proud of will be a problem. At your deposition, the employer’s lawyer will use your own words against you. They’ll twist every sentence. So not only did you fail to get severance, but you’ve also now ruined your own lawsuit. This is one of the most damaging employee severance negotiation mistakes you can make.
Want to learn even more about how a severance demand letter should actually be written? Read my detailed analysis in: Boost Your Executive Severance Pay: Demand Letter Tactics That Work
Negotiation Mistake #6: Demanding Unvested Equity Without Legal Grounds in California
Unvested equity claims almost never work. These agreements are governed by federal law and usually define the value of your vested shares as zero. And the agreements are airtight. Unless you’re holding a golden lottery ticket, and you’re not, this demand is going nowhere. I’ve never seen a terminated employee get paid out unvested equity through a severance agreement negotiation. Not once. Nevertheless, this remains one of the more persistent employee severance negotiation mistakes.
Negotiation Mistake #7: Focusing on Past Performance Instead of Future Leverage
You want to tell them how hard you worked, how many clients you brought in, and how much you deserve a payout. They don’t care. You’ve been fired. Your credibility is gone; if the company really cared at all about what you thought or said, do you think you would have been terminated? Of course not! The sad reality is that an involuntary termination is the employer’s legal notice that they don’t want to have anything to do with you, and that decision will never change.
Why Emotional Justifications Fail Under California Severance Law
In other words, arguing about what your former employment was “worth to the employer” sounds like a good strategy, but is weak because the company will respond every time: that’s what we paid you to do! And if you start arguing about your past accomplishments and your past value, the employer is just going to pick it apart. “Actually, you didn’t bring in that client. Steve did.” That debate helps no one.
Using Severance as a Transition Strategy to Increase Negotiation Leverage
The right way to approach severance agreement negotiation is to focus on what you need to move forward in order to bridge the gap to your next job. But most people can’t thread that needle. They overdo it. And the company’s response is simple: “We don’t owe this person anything.” This is another classic example of employee severance negotiation mistakes that derail the whole process for California employees who don’t understand how leverage works.
Key Takeaways: How California Employees Can Avoid Severance Negotiation Mistakes
- Most employees destroy their leverage early by making a severance demand before speaking with an employment attorney.
- Employers are trained to reject rushed, emotional, or uninformed demands. And they usually do.
- Writing your own “lawyer-style” demand letter almost always exposes your lack of legal strategy and weakens your position.
- Asking for unrealistic severance numbers signals you have no legal basis for your demand and makes employers stop negotiating.
- Long, rambling demand letters filled with unnecessary detail often get ignored and later used against you.
- Insisting on payment for unvested equity is typically a dead-end and can make you appear unreasonable.
- Arguing about how valuable you were in the past rarely works. Successful negotiations focus on future transition needs and legal exposure.
- Once these mistakes are made, even a skilled employment attorney may not be able to recover the leverage you lost.
- The smartest move is simple: speak with an experienced California severance attorney before you make a single move.
To see real examples of successful severance negotiations and how they were won, read my blog: Examples of Successful Severance Negotiation.
FAQ: Common Severance Negotiation Mistakes Made by California Employees
Here are the most common questions California employees ask when trying to avoid employee severance negotiation mistakes.
Question 1: What are the most common employee severance negotiation mistakes?
The most common employee severance negotiation mistakes include making a demand too early, writing your own demand letter without legal strategy, asking for unrealistic amounts, and insisting on unvested equity. These errors signal to employers that you lack legal leverage and can lead them to immediately shut down negotiations.
Question 2: Why does making an early severance demand weaken my leverage?
Making a demand too quickly is one of the biggest mistakes employees make in severance negotiations. Employers are trained to reject premature or emotional demands, especially when no legal basis is presented. Once they see you are unrepresented and unsure of your legal rights, they feel safe refusing to negotiate.
Question 3: How does writing my own severance demand letter hurt my negotiation?
Writing your own demand letter is one of the most damaging severance negotiation errors employees make. Without understanding the FEHA, wrongful termination standards, or legal leverage, employees often reveal weak claims, emotional reasoning, or inconsistent facts. All of which destroy credibility.
Question 4: What happens if I ask for an unrealistic severance amount?
Unrealistic numbers are a major employee severance negotiation mistake because they show you don’t know how severance is calculated under California law. Employers immediately recognize when a number is based on emotion rather than legal exposure, which makes them stop engaging.
Question 5: Can negotiating severance on my own hurt a future legal claim?
Yes. Many employee severance negotiation mistakes, such as oversharing, exaggerating claims, or contradicting potential FEHA or wrongful termination allegations, can harm future lawsuits. Anything you write or say during early negotiations may later be used against you in court or deposition.
Question 6: Is hiring a California employment lawyer worth it for severance negotiations?
Absolutely. A skilled attorney can identify potential legal violations such as FEHA discrimination, retaliation, or wrongful termination which become leverage in settlement talks. Avoiding employee severance negotiation mistakes early often leads to significantly higher payouts.
Question 7: How do I know if I’ve already made severance negotiation mistakes that cost me leverage?
If your employer has ignored your request, refused to counter, or responded with a firm “take it or leave it,” you may have already committed employee severance negotiation mistakes that reduced your leverage. In this situation, getting legal counsel immediately is critical.
Question 8: What is the best way to avoid employee severance negotiation mistakes from the beginning?
The best way to avoid costly employee severance negotiation mistakes is to speak with a California employment attorney before making any statements, signing anything, or submitting a severance demand. A lawyer can build a legally credible strategy that protects your leverage from the start.
Final Warning: Avoid Severance Negotiation Mistakes with a California Employment Lawyer
Severance agreement negotiation is not a DIY project. If you try to handle it yourself, you will almost certainly screw it up one way or the other. You’re not going to get what you’re owed. And worse, you may destroy your ability to ever make a legal claim later. The cost of making these employee severance negotiation mistakes is almost always higher than the cost of getting legal help upfront.
Get help before you act. The earlier, the better.
For a deeper look at how to approach these discussions the right way, read my comprehensive guide: Effective Severance Agreement Negotiation.
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 consultation.
Blog posts are not legal advice and are for information purposes only. Contact the Ruggles Law Firm for consideration of your individual circumstances.
