SAN FRANCISCO EMPLOYMENT LAW BLOG

Becoming a parent is a transformative experience filled with joy and new responsibilities. Still, it brings unique challenges, especially when it comes to financial stability and work-life balance. For new parents, understanding and negotiating severance agreements can be crucial. 

These agreements provide essential financial support, health benefits, and legal protections that ensure both immediate and long-term security for the family. By addressing specific needs such as extended health coverage, flexible work arrangements, and childcare assistance, severance agreements can offer a vital safety net during times of employment transition. 

However, not every employer chooses to honor these agreements once they are negotiated. When that occurs, it may be necessary to take legal action to ensure you receive the severance you’re owed. Let’s break down how severance agreements work, why they’re particularly important for new parents, and how you can effectively navigate and secure these critical benefits.

How Do Severance Agreements Work?

A severance agreement is a legally binding contract between an employer and an employee designed to outline the terms of the employee’s departure from the company. The primary purpose of a severance agreement is to provide financial and other forms of support to the departing employee while protecting the employer from potential legal claims. Common components of these agreements include:

1. Severance Pay: A lump sum or periodic payments to help the employee transition to new employment.
2. Health Benefits: Continuation of health insurance coverage, often through COBRA, for a specified period.
3. Stock Options and Retirement Benefits: Details on the handling of stock options, retirement plans, and other long-term benefits.
4. Non-Compete and Non-Disclosure Clauses: Restrictions on working for competitors or sharing confidential information.
5. Rehire and Reference Policies: Conditions under which the employee may be rehired or how references will be handled.

As California is a right-to-work state, severance agreements are not required under state law. You are most likely to be offered one of these contracts if you fall under one of the following categories:

1. Executives and High-Level Managers: These employees often have complex roles with significant responsibilities, and their departures can have substantial impacts on the organization. Severance agreements for executives and managers usually include compensation packages, non-compete clauses, and other terms to ensure a smooth transition and protect company interests.
2. Long-Term Employees: Employees who have dedicated many years to a company may receive severance agreements as a form of recognition for their service. These agreements can help ease the financial burden during their transition out of the company.
3. Employees Affected by Layoffs or Downsizing: Companies often provide severance packages to employees who are laid off due to economic downturns, restructuring, or downsizing. These packages are designed to support employees while they search for new employment.
4. Employees in Unionized Workplaces: In unionized workplaces, collective bargaining agreements often include provisions for severance pay and benefits for workers who are laid off or whose positions are eliminated.
5. Workers with Specialized Skills or Knowledge: Employees who possess unique skills, knowledge, or expertise critical to the company’s operations may receive severance agreements to prevent them from immediately joining a competitor and to ensure the protection of proprietary information.
6. Contract Employees and Consultants: Some contract employees and consultants negotiate severance agreements as part of their employment contracts. These agreements outline the terms and conditions of their departure, including any compensation they may receive.
7. Employees in Voluntary Separation Programs: Companies sometimes offer voluntary separation programs to encourage employees to resign voluntarily. These programs often include severance packages as an incentive for employees to participate.
8. Employees in High-Risk Positions: Workers in positions that carry significant legal or financial risks (e.g., financial analysts and compliance officers) may receive severance agreements to mitigate potential future liabilities and ensure a smooth transition.

If you fall into one of these categories, you may be offered a severance contract at some point during your employment. It is always important to understand the terms of your contract. Still, it is particularly crucial if you are planning or already have become a new parent. Let’s break down the laws surrounding these agreements in California. 

Laws Around Severance Agreements in California

California employment laws provide a robust framework to protect workers, including regulations that impact severance agreements. These laws ensure that employees are treated fairly and have access to essential rights and benefits, particularly during the termination process. Laws that impact severance agreements in California include:

WARN Act

The California Worker Adjustment and Retraining Notification (WARN) Act mandates that employers provide a 60-day notice to employees before a mass layoff, plant closure, or significant reduction in the workforce. This notice period allows employees to prepare for the transition, seek new employment, and make necessary financial arrangements.

Key Points:

• Applies to employers with 75 or more full-time employees.
• Requires notice to affected employees, the Employment Development Department, and local government officials.
• Employers who fail to comply may be required to pay back wages and benefits for the notice period.

California Family Rights Act (CFRA)

The CFRA grants eligible employees the right to take up to 12 weeks of unpaid, job-protected leave within a 12-month period for certain family and medical reasons, including the birth of a child, adoption, or serious health condition of the employee or a family member.

Key Points:

• Applies to employers with 5 or more employees.
• Covers leave for bonding with a new child within one year of birth or placement.
• Ensures job protection and continuation of health benefits during the leave period.

Fair Employment and Housing Act (FEHA)

The FEHA prohibits employment discrimination, harassment, and retaliation based on protected characteristics such as race, gender, age, disability, and pregnancy. It provides comprehensive protections to ensure fair treatment in the workplace.

Key Points:

• Applies to employers with 5 or more employees.
• Includes protections against discrimination for pregnancy, childbirth, and related medical conditions.
• Allows for reasonable accommodations for pregnant employees, such as modified duties or leave.

Family and Medical Leave Act (FMLA)

The FMLA is a federal law that provides eligible employees with up to 12 weeks of unpaid, job-protected leave within a 12-month period for specific family and medical reasons, including the birth and care of a newborn.

Key Points:

• Applies to employers with 50 or more employees within a 75-mile radius.
• Ensures job protection and continuation of group health insurance coverage.
• Allows for leave to care for a newborn or newly adopted child within the first year.

Pregnancy Disability Leave (PDL)

Under California law, Pregnancy Disability Leave (PDL) allows employees to take up to four months of leave for pregnancy-related conditions, including childbirth and recovery. PDL can be taken in addition to leave provided under the CFRA and FMLA.

Key Points:

• Applies to employers with 5 or more employees.
• Provides leave for any period the employee is disabled due to pregnancy, childbirth, or related medical conditions.
• Ensures job protection and continuation of health insurance coverage during the leave.

Understanding these laws is crucial for new parents negotiating severance agreements, as it allows them to advocate for their rights and secure fair and adequate terms.

Negotiating a Fair Severance Agreement

Negotiating a severance agreement is a critical step for employees, especially new parents, to ensure fair treatment and secure adequate financial support during a period of transition. Effective negotiation can lead to better severance terms, providing necessary resources and flexibility to support new family dynamics. Strategies for effective bargaining include: 

Understanding Your Leverage

Leverage is the power or advantage one holds in a negotiation. It can stem from various factors, such as the employee’s role, performance, and the circumstances of the termination. Understanding your leverage helps you negotiate more favorable terms.

Identifying Your Needs and Priorities

Knowing what you need from the severance agreement allows you to focus negotiations on the most critical aspects. Prioritize elements that will provide the most significant benefit to your family and personal circumstances.

Seeking Professional Advice

Professional advice from an employment attorney or a human resources consultant can be invaluable. These experts can provide insights into typical severance terms, legal rights, and effective negotiation strategies.

Emphasizing Family and Health Needs

New parents should highlight the importance of family and health needs when negotiating severance terms. Employers may be more willing to accommodate requests that are framed around the well-being of the family.

Negotiating a fair severance agreement is essential for new parents to ensure they receive the support needed during a significant life transition. By understanding your leverage, identifying your needs and priorities, and seeking professional advice, you can negotiate terms that provide financial stability and accommodate your family’s needs. 

Getting Help Enforcing and Defending a Severance Package

Ensuring that the terms of a severance agreement are honored is crucial for new parents who depend on the promised benefits and support. Sometimes, disputes may arise, or employers might not adhere to the agreed-upon terms. 

Severance agreements are legal contracts detailing the terms under which you are leaving the company, including financial compensation, benefits continuation, and other considerations. Disputes may arise if there are misunderstandings or disagreements about these terms. If your employer is interpreting the agreement differently than you are, or if they are not honoring specific clauses, it may be time to seek legal assistance.

Furthermore, suppose your employer fails to adhere to the agreed-upon terms, such as not providing the full severance pay, benefits, or other promised compensations. In that case, this constitutes a violation of the severance agreement. Additionally, any breach of confidentiality, non-compete, or non-disparagement clauses on either side may warrant legal intervention.

In such cases, seeking legal help is essential. Here are three steps to take if your severance agreement is not honored:

1. Documenting Violations Keep meticulous records of any violations of the severance agreement. This includes saving emails, letters, and any other communication related to the severance package. Detailed documentation will support your case if legal action becomes necessary.
2. Communicating with Your Employer Before escalating the matter, attempt to resolve the issue by communicating directly with your employer. Clearly outline the violations and provide evidence to support your claims. Sometimes, a direct conversation can resolve misunderstandings without the need for legal proceedings.
3. Seeking Mediation or Arbitration If direct communication does not resolve the issue, mediation or arbitration might be the next step. These are less formal and less costly alternatives to court proceedings, where a neutral third party helps to resolve the dispute. Many severance agreements include clauses that require mediation or arbitration before pursuing litigation.

An experienced employment law attorney can provide the necessary support and representation to protect your rights and ensure you receive the benefits you deserve.

Role of Employment Law Attorneys

Employment law attorneys specialize in labor and employment issues, making them well-equipped to handle severance agreement disputes. They can provide expert advice on the legality of the severance terms and the best course of action if the agreement is violated.

If mediation or arbitration does not resolve the dispute, your attorney can file a claim or lawsuit on your behalf. They will handle all legal paperwork, represent you in court, and work to ensure you receive the compensation and benefits you are entitled to under the severance agreement.

In many cases, disputes can be resolved through settlement negotiations before reaching trial. Employment law attorneys can negotiate with your employer’s legal team to reach a fair settlement that honors the original terms of the severance agreement or provides appropriate compensation for any breaches.

Understand and Defend Your Severance Contract in California

Negotiating and securing a fair severance agreement is crucial for new parents facing employment termination. By understanding the components of severance agreements, leveraging legal protections, and employing effective negotiation strategies, new parents can ensure they receive the support they need. Legal assistance from a skilled law firm like Le Clerc & Le Clerc, LLP, is invaluable in enforcing and defending these agreements, providing a safety net during a significant life transition. Advocacy, preparation, and professional support are key to achieving a fair and beneficial severance package.

Parental rights in the workplace have increasingly become a focal point of legislative efforts, particularly in states that are pushing for more progressive employment laws. These rights typically encompass provisions for maternity and paternity leave, flexible working arrangements, and the ability to address childcare emergencies without fear of job loss. 

The state of California has been at the forefront of this movement, often enacting laws that serve as benchmarks for other states. Here’s what you need to know about how recent changes in California’s state law have reshaped the landscape of parental rights, making significant strides in supporting working parents.

Background on Parental Rights in the Workplace 

Parental rights in the context of employment refer to the rights of employees to receive certain benefits and accommodations related to childbirth, adoption, and childrearing. These rights are essential to help parents balance their responsibilities at home with their obligations at work without facing discrimination or job loss. Key components of parental rights typically include:

1. Maternity and Paternity Leave: This is the period of leave granted to mothers and fathers around the time of the birth or adoption of a child. This leave allows parents to care for and bond with their newborn or newly adopted child.
2. Flexible Working Hours: These are arrangements that allow parents to modify their working hours to accommodate childcare needs. Examples include starting and ending work at non-standard times, working from home, or working part-time.
3. Rights to Address Child Care Emergencies: This includes the right to take time off work, sometimes at short notice, to deal with emergencies related to a child’s care, such as illness or unexpected closure of childcare facilities.

In combination, these types of rights make it substantially easier for parents to remain in the workforce. 

The benefit of expanded rights for working parents is more than just a matter of convenience. According to workers’ rights advocates, these rights also reduce the impact of bias against women in the workplace. While these rights apply to people of all genders, women are still disproportionately likely to leave the workforce after becoming a parent, possibly because women continue to handle the bulk of childcare and house management tasks. The root of this issue is complex, but societal biases mean that men often feel obligated to support their families financially. At the same time, women experience social pressure to take on childcare tasks.

If mothers leave their jobs to recover from childbirth without having a guarantee of getting their positions back, their partners may feel pressured to work more. In contrast, if new fathers opt to work more, childcare by default falls on the mothers, which can make maintaining a standard work schedule difficult without accommodations. Either circumstance can spiral into a situation where a mother leaves the workforce, often against her will. By making it easier for parents to care for their children while keeping their jobs, rights like protected family leave and pregnancy accommodations help working mothers keep their jobs. 

Historical Legal Frameworks at the Federal Level

The foundational legal framework for parental rights in the United States is the Family and Medical Leave Act (FMLA) of 1993. FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons. Employees are eligible for 12 workweeks of leave in a 12-month period for the birth and care of a newborn child, for the placement with the employee of a child for adoption or foster care, and to care for a designated person with a serious health condition, among other provisions.

California’s Specific Approach

California has expanded upon these federal protections with its own set of laws that are more comprehensive and inclusive. Some of the key features of California’s approach include:

• California Family Rights Act (CFRA): CFRA mirrors the FMLA in many respects but includes additional provisions. For instance, it covers employers with at least five employees, compared to the federal requirement of 50 employees, significantly expanding access to family leave.
• Paid Family Leave (PFL): California provides partial wage replacement to employees who take time off work to bond with a new child or care for a seriously ill family member. This benefit is funded through employee contributions to the State Disability Insurance (SDI) program and offers up to eight weeks of benefit payments.
• Pregnancy Disability Leave (PDL): Separate from CFRA, PDL provides up to four months of leave for women who are disabled due to pregnancy, childbirth, or a related medical condition, irrespective of the employer’s size.

California’s laws often serve as a progressive model for other states, pushing forward the boundaries of what is considered standard for parental rights in the workplace. These laws not only address the duration and compensation aspects of leave but also enhance the inclusivity and accessibility of these rights, ensuring a broader demographic of workers can benefit from them.

Recent Changes in California State Law 

Recent legislative changes in California have significantly expanded and altered parental rights, reflecting the state’s commitment to supporting working families. These changes primarily focus on enhancing the scope of the CFRA and improving the PFL program. Here’s an in-depth look at these reforms, their implications, and the timelines for their implementation.

Expansion of the California Family Rights Act (CFRA)

Historically, CFRA aligned closely with the federal Family and Medical Leave Act (FMLA), providing up to 12 weeks of unpaid, job-protected leave for certain family and medical reasons. However, recent amendments, which took effect on January 1, 2023, have broadened its scope significantly:

• Expansion to Smaller Employers: One of the most consequential changes is the expansion of CFRA to apply to any employer with five or more employees, previously applicable only to those with 50 or more. This change dramatically increases the number of California workers eligible for protected leave.
• Inclusion of Additional Family Members: CFRA now allows employees to take leave to care for a broader range of family members, including grandparents, grandchildren, siblings, adult children, or unrelated “designated persons”. This amendment acknowledges the diverse caregiving needs of modern families.
• Elimination of the 75-Mile Radius Requirement: Unlike the FMLA, which limits eligibility to employees who work within 75 miles of their employer’s location, CFRA has removed this requirement, further widening accessibility.

These amendments not only enhance job protection for leaves but also promote a more inclusive view of family obligations, accommodating a broader spectrum of family structures and needs.

Revisions to California’s Paid Family Leave 

Alongside the CFRA expansion, revisions to California’s Paid Family Leave, which took effect on July 1, 2020, have also made substantial impacts:

• Increased Duration of Benefits: The duration of PFL benefits has been extended from six weeks to eight weeks. This extension allows for a longer period of bonding time with new children and caring for a sick family member, providing substantial support to working parents.
• Benefit Amount Adjustments: While the percentage of wage replacement varies, efforts have been ongoing to increase the accessibility and attractiveness of PFL by making it financially feasible for lower-income workers to take leave.
• Future Expansion Plans: Looking ahead, California legislators have discussed proposals to extend the duration of PFL further and to increase the wage replacement rate to make it even more accessible, especially for lower and middle-income workers.

Implementation and Timelines

These legislative changes reflect California’s progressive stance on parental rights and set a benchmark for other states considering similar reforms. By expanding coverage and enhancing benefits, California aims to create a more inclusive, supportive environment for working parents, both supporting individuals and families while ultimately benefiting the broader social fabric and economic health of the state.

Impact on Parents Working in California

The recent changes in California’s state laws regarding parental rights have had a direct and profound impact on parents working in the state. These legislative adjustments are designed to improve work-life balance and provide greater support during pivotal family moments. However, despite significant progress, challenges and gaps in the legislation still exist, affecting some family structures and situations. Here’s a closer look at both the positive impacts and the ongoing challenges.

• Extended Leave and Financial Support: The extension of paid family leave from six to eight weeks has given parents more time to bond with new children or care for ill family members without the stress of immediate financial hardship. This has been particularly beneficial during the early stages of a child’s life or critical health crises, allowing parents to be present when needed most without jeopardizing their employment.
• Inclusion of a Wider Range of Family Members: By expanding the definition of family within the California Family Rights Act (CFRA) to include grandparents, grandchildren, siblings, and adult children, the state acknowledges and supports the diverse caregiving responsibilities of modern families. This broader inclusivity helps workers who are involved in the care of extended family members, fostering a better balance between personal and professional responsibilities.
• Stories from the Workplace: Anecdotal evidence and qualitative research suggest that these changes have significantly benefited family life. For instance, parents have reported a decrease in stress and an increase in overall happiness due to being able to spend more time at home during critical periods without fear of losing their jobs. Companies have shared stories of employees who returned to work more engaged and loyal, having been granted the time needed to focus on their families.

Persistent Challenges and Gaps

Despite the advancements, not all families and situations are adequately covered by the new laws, presenting ongoing challenges:

• Part-Time and Gig Economy Workers: Many part-time workers, freelancers, and independent contractors do not enjoy the same benefits as full-time employees. These workers often miss out on job-protected leave and wage replacement benefits because they do not meet the eligibility requirements or because their employment status is not covered under the current legal framework.
• Financial Feasibility for Low-Income Families: While paid family leave provides partial wage replacement, the amount may not be sufficient for low-income workers who live paycheck to paycheck. This financial shortfall can deter some parents from taking full advantage of the leave available to them, as the reduced income during this period may not be enough to cover basic living expenses.
• Awareness and Utilization: There is also a challenge with awareness and utilization of these rights. Some employees may not fully understand their rights or how to claim them, particularly in smaller companies with less robust HR departments. Additionally, cultural stigmas or workplace pressures may discourage employees from taking full advantage of the leave they are entitled to.

While California’s legislative changes have undoubtedly improved parental rights in the workplace, leading to enhanced work-life balance and family well-being, there are still notable challenges that need addressing. Closing these gaps requires ongoing legislative refinement and broader cultural shifts in workplace attitudes toward family leave.

Helping You Demand Your Parental Rights in the Workplace

The changes in state law in California represent significant progress in supporting parental rights in the workplace, but they are not yet perfect. The ongoing struggle with awareness and utilization of working parents’ rights impacts people around California. Employers rely on workers’ fear of exercising their rights to avoid making the accommodations or providing the protected leave their employees are owed. If you are a new or expecting parent, you deserve to take the leave you’re guaranteed under California employment law. If your employer tries to prevent you from taking leave, or if you face retaliation for exercising your rights, the experienced employment lawyers at Le Clerc & Le Clerc, LLP, can help. We are dedicated to protecting parents’ rights at work, and we can help you take a stand against discrimination, harassment, or retaliation you face after becoming a parent. Don’t waste any more time – learn how we can help you with your employment discrimination claim by getting in touch with our Bay Area workplace discrimination law firm today.