My Severance Agreement Says I Can Never Sue My Employer. Is That True?

Mostly, yes. That's the honest answer, and it's why you need to take the release of claims provision seriously. But there are important exceptions and limits that the agreement probably doesn't highlight for you.

What the Release Actually Does

When you sign a severance agreement with a general release, you're agreeing not to bring legal claims against your employer for anything related to your employment. This is the core of the deal: they pay you severance, and you give up your right to sue. In most cases, whether you work in downtown LA or anywhere else in the county, the release is enforceable once signed.

The release typically covers every type of employment claim: wrongful termination, discrimination, harassment, retaliation, wage violations, breach of contract. The language is designed to be as comprehensive as possible. If you sign it, you generally cannot file a lawsuit on any of these grounds.

But Here's What They Can't Take Away

California law and federal law protect certain rights that cannot be waived in a severance agreement, no matter what the document says:

Your right to file a charge with government agencies. You can always file a complaint with the Civil Rights Department (formerly DFEH), the EEOC, the DLSE (Labor Commissioner), OSHA, or the SEC. The release can waive your right to receive money from these filings, but it cannot prevent you from filing in the first place.

Workers' compensation claims. Your right to file a workers' comp claim cannot be waived in a severance agreement.

Unemployment benefits. You retain the right to file for unemployment with the EDD regardless of what the agreement says.

Claims based on events after the signing date. The release covers past claims, not future ones. If your employer does something harmful to you after you sign, those claims are not released.

Discussion of working conditions. Under the National Labor Relations Act, you generally retain the right to discuss wages and working conditions, even after signing a severance agreement. SB 331 (the Silenced No More Act) further limits what employers can silence you about in California, particularly regarding workplace harassment and discrimination.

When the Release Might Not Be Enforceable

Even a signed release can be challenged under certain circumstances:

OWBPA violations for employees over 40. If the agreement doesn't comply with the Older Workers Benefit Protection Act requirements (21-day review period, 7-day revocation period, advice to consult an attorney, clear language about age discrimination waiver), the age discrimination waiver may be unenforceable. You could potentially take the severance and still pursue an age discrimination claim.

Duress or coercion. If you were pressured to sign under circumstances that a court would consider duress, the release may be voidable. Being told "sign now or get nothing" while being escorted out of the building could qualify, depending on the circumstances.

Fraud or misrepresentation. If the employer lied about material facts to get you to sign (for example, telling you the company was eliminating your position when they were actually replacing you), the release could be challenged.

Unconscionability. A release might be unenforceable if the terms are so one-sided that no reasonable person would agree to them. A $500 severance payment in exchange for a blanket release of six-figure claims might qualify.

The Practical Reality

Here's what this means for you: if you sign the release, you are giving up the right to sue for almost everything related to your employment. The exceptions above are real but narrow. Don't sign assuming you can challenge the release later. In most cases, a properly executed release will hold up in court.

That's exactly why it's so important to evaluate your claims before signing. Once the release is signed, your options shrink dramatically. If you have a strong discrimination, retaliation, or wage claim here in LA, you need to know that before you sign it away. After signing, it's almost certainly too late.

What You Should Do

Read the release carefully. Understand which specific claims and laws are listed. The more you know about what you're waiving, the better you can evaluate the trade.

Evaluate your potential claims. Do you have grounds for discrimination, retaliation, or wage claims? These claims are what the employer is paying you to release. If they're worth more than the severance, the deal isn't fair.

Get professional advice. A Los Angeles employment attorney can tell you exactly what you're giving up and whether it's worth more than what you're getting. Free consultations are available for employees throughout Los Angeles and Southern California.

The release is powerful. Take it seriously. But know your rights before you sign them away.