Executive Severance

An executive severance attorney reads your package the way the company's lawyers wrote it: as one interconnected deal spanning your employment agreement, equity plan documents, grant notices, bonus plan, deferred compensation plan, and the release itself. Small drafting choices, such as whether your departure is "without cause," whether a "good reason" definition applies, or how the agreement characterizes your final vesting date, can shift the real value of the package dramatically.

Labor Law PC represents executives and employees only, never companies. From Santa Monica, we advise senior leaders across Los Angeles, from entertainment and media executives in Burbank and Culver City to healthcare administrators, aerospace and logistics leadership, and startup founders and C-suite officers on the Westside. Consultations are confidential. Call (877) 775-2267 or contact us online before you sign anything.

What Is Really at Stake in an Executive Package

Cash severance is usually the smallest lever. A proper review prices every component:

• Equity and RSU vesting. What happens to unvested options and RSUs at separation, whether any acceleration applies, how long your post-termination exercise window runs, and whether the company can repurchase vested shares. Missing an exercise deadline can wipe out years of value.
• Change-in-control and golden parachute terms. Single-trigger versus double-trigger acceleration, how "cause" and "good reason" are defined, and whether excise tax provisions under the federal golden parachute rules cut into your payout.
• Bonuses and commissions. Under California law, an earned bonus or commission is a wage. A release cannot lawfully take away wages you have already earned, and unpaid final wages can trigger waiting time penalties under Labor Code sections 201 through 203.
• Deferred compensation. Nonqualified deferred comp is locked into strict federal timing rules, and a severance agreement that tries to move payments around can create serious tax problems. The schedule needs to be checked, not assumed.
• Restrictive covenants. Non-competes, customer and employee non-solicits, and overbroad confidentiality clauses. California treats these very differently than other states, and that difference is negotiating leverage.
• Reputation and transition terms. Non-disparagement (which should be mutual), agreed references and announcement language, cooperation clauses that can consume unpaid weeks of your time, and continued indemnification and D&O coverage for decisions you made in office.
• The release itself. What claims you are waiving, including a Civil Code section 1542 waiver of unknown claims, and whether you are releasing claims that are worth more than the package, such as discrimination, retaliation, or whistleblower claims connected to your exit.

California Law Is Your Leverage

Executives negotiating exits in Los Angeles hold cards that their counterparts in most states do not, because California law tilts several key terms in your favor.

Non-Competes Are Void: Business and Professions Code Section 16600

California voids nearly every post-employment non-compete. Business and Professions Code section 16600 makes contracts that restrain anyone from engaging in a lawful profession, trade, or business void, with only narrow exceptions such as the sale of a business. California courts have also refused to soften this rule with "narrow restraint" exceptions, and broad non-solicitation covenants are frequently unenforceable as disguised non-competes. Recent legislation strengthened the rule further, making void non-competes unlawful to enforce or attempt to enforce regardless of where they were signed, and requiring employers to notify affected workers that such clauses are void. [VERIFY current status of Business and Professions Code sections 16600.1 and 16600.5 and the notice requirements before publishing.]

Why does that matter at the negotiating table? Companies routinely ask departing executives to "reaffirm" restrictive covenants in a severance agreement. If the covenant was void to begin with, agreeing to it costs you your most valuable asset, your freedom to work, and you should be paid for anything you actually give up, or the clause should come out.

Earned Compensation Is Protected

California's wage statutes apply at the executive level too. Earned salary, earned bonuses, accrued vacation, and earned commissions are wages that must be paid on separation under Labor Code sections 201 through 203, and unpaid amounts can accrue waiting time penalties. A severance offer that quietly bundles compensation you are already owed into the "consideration" for your release is not a real offer, and identifying that is often the first move in negotiation.

Releases Have Limits

California restricts what a release and its confidentiality terms can cover. Agreements generally cannot prevent you from disclosing unlawful workplace conduct such as harassment, discrimination, or retaliation, and cannot waive certain non-waivable statutory rights. If you are 40 or older, the federal Older Workers Benefit Protection Act requires specific consideration periods and a revocation window for a valid age discrimination release. Deadlines and review periods vary by situation, so have a lawyer confirm which ones apply to you.

Underlying Claims Change the Number

The strongest severance negotiations are backed by claims. If your exit followed protected complaints, a medical leave, a whistleblower report to the board, or discrimination, the value of the claims you are being asked to release, not the company's severance formula, sets the real range. We evaluate both sides of that ledger before recommending any number.

How We Work With Executives

1. Confidential consultation. We review the offer, your employment agreement, equity documents, and the story behind your exit. Discretion is absolute; most engagements never become public.
2. Full-package valuation. We price equity treatment, bonus and deferred comp exposure, covenant concessions, and any legal claims you would be releasing.
3. Strategy and counter. Sometimes the right move is a markup through counsel; sometimes it is a quiet conversation between lawyers; sometimes you are better positioned negotiating directly with our guidance behind the scenes.
4. Documentation. We negotiate the redlines, confirm the equity and tax mechanics are captured correctly, and make sure the final agreement matches the deal you were promised.

Timing matters. Offers often carry short response windows, and equity exercise clocks keep running regardless of negotiations. Contact us as early as possible, ideally before you acknowledge the offer in writing.

Fee Structures That Fit the Engagement

Executive severance work does not fit one billing model, and we say so up front. Depending on the matter, we handle engagements on contingency, on a flat fee for defined review projects, or on other structures agreed in advance, and the initial consultation is free. [VERIFY current fee structures offered for executive severance engagements before publishing.] If your matter becomes a litigation claim, our no-fees-until-we-win contingency approach applies.

Frequently Asked Questions

• How much severance should an executive expect in California?

  There is no statutory formula; severance is set by your contracts and your leverage. Employment agreements, equity plans, company precedent, and the strength of any legal claims drive the range, which is why the package has to be valued as a whole rather than benchmarked against a single multiple.

• Is the non-compete in my agreement enforceable in California?

  Almost certainly not as a traditional post-employment non-compete: Business and Professions Code section 16600 voids them outside narrow exceptions like the sale of a business. But do not simply ignore it. Have a lawyer confirm how it interacts with your severance conditions, equity, and any out-of-state choice-of-law clause.

• What happens to my unvested RSUs and options if I sign?

  Whatever the plan documents and your agreement say, which is exactly the problem: severance agreements often stay silent, and silence usually means forfeiture of unvested grants and a short window to exercise vested options. Vesting treatment is one of the most negotiable and most overlooked terms.

• Can I negotiate a severance offer without souring the relationship?

  Usually yes. At the executive level, negotiation through counsel is expected, and companies budget for it. A professional, claims-aware counter is far more common than employers admit, and it rarely results in a withdrawn offer, though no outcome can be guaranteed.

• Do I have to sign by the deadline in the letter?

  Deadlines in offer letters are often softer than they look, and some review periods are required by law for workers 40 and older. Never assume, though: deadlines vary, and equity exercise windows are usually rigid. Get advice before the stated date.

• My exit followed a report I made to the board. Does that change things?

  Significantly. Whistleblower and retaliation claims can be worth more than the package on the table, and releasing them cheaply is the most expensive mistake an executive can make. Have the underlying claims evaluated before you respond to the offer.

Related Practice Areas

• Severance Agreements: our full severance practice for California employees at every level.
• Severance Agreement Review: line-by-line review of releases and standard packages before you sign.
• Severance Negotiation: strategy and leverage for improving any severance offer.
• Wrongful Termination: when the exit itself is the legal claim.

Serving Los Angeles and All of California

Labor Law PC advises executives from our Santa Monica headquarters across Los Angeles County, including Beverly Hills, West Hollywood, Burbank, Glendale, Pasadena, Long Beach, and Torrance, and senior leaders statewide, with a Palo Alto office serving the Bay Area.

Before You Sign, Talk to Us

The company had lawyers draft your package. You are entitled to have a lawyer read it. Get a confidential assessment of what your agreement really pays, what it takes away, and what it should say instead.

Call (877) 775-2267 or request your confidential consultation online.