Title: Separation agreement and waiting penalties
I was fired from my job on February 1st and my final check was set up to be deposited on February 15th. I notified HR on the 2nd which is when I noticed the mistake. HR says that since I chose to have the check deposited instead of a paper check, it will be paid with the next pay cycle.
The company financial executive was CC’d on the email and he cancelled that check and issued a new one dated February 5th (the day he saw the email). It reached my bank account on the 6th.
I notified HR that the mistake was corrected and also that the separation agreement was no longer valid since it says I would be paid on the 1st. I told them it could be modified and made valid by making note of the date discrepancy and adding waiting time penalties of 5 days in addition to the offer of severance pay.
HR changed their story to, since they set up the auto deposit on the 1st, they owe me nothing.
I had 3 more days to decide to sign the separation agreement and it was a 3 day weekend. I had nobody else that I could consult, so I signed the separation agreement but not the general release which would waive any right to penalty fees. And I sent the signed page to HR.
Come Tuesday, HR calls in the morning and said my severance pay is being auto deposited. I should have it tomorrow or the next day.
So this leaves me with many questions:
I notified the company of the mistake in the agreement and suggested a possible remedy. They did not correct it. So is the agreement even valid?
Do I have to give back the payment? I didn’t sign the release portion, which I was supposed to sign in exchange for the severance pay.
I believe HR knows the law regarding final paychecks. Was it even legal to ask me to sign the agreement?
Can I keep the severance pay and still get waiting time penalties?
Hi Julius,
Thank you for your submission. Your issues go a little bit beyond what we can safely answer in this Q&A section. It’s not really possible to tell you whether a contract is enforceable without reviewing it first. Among other things, I would need to know whether an actual breach occurred under the agreement and whether that breach was material.
It’s possible that by accepting the severance payment, you’ve essentially agreed to the contract that the payment was conditioned on. This is sometimes referred to as “acceptance by performance.” But things get complicated because they direct deposited the check in your account, without your formal acceptance. Have you spent or transferred those funds?
And, when you say “final check” does that mean amounts you actually earned? Or is that referring to amounts you were paid as part of your severance? Your issue really involves more than a quick analysis could adequately provide based on the facts given.
That being said, there is a fair argument that a severance agreement cannot waive an the employee’s right to pursue violations of California’s wage and hour laws. (See Singh v. Southland Stone, U.S.A., Inc. (2010) 186 Cal.App.4th 338, 365 [”an employer is required to timely pay wages due under Labor Code section 201 or 202 unconditionally and cannot require an employee to sign a waiver as a condition of payment.”]; see also Labor Code, § 203.)
So you might have an argument that you’re entitled to both the severance pay under the agreement and waiting time penalties. But were waiting time penalties contemplated in the severance agreement? Were they already included in your severance check? I can’t really tell from your question.
I think your best bet would be to discuss your issue with a contract attorney.
In any event, I hope this information helps. Please remember that this information does not constitute legal advice and should not be relied on. Nor does it create an attorney-client relationship.
I wish you the best of luck in your situation!