Whether you are stepping into an executive role at a promising tech startup or parting ways with an established Fortune 500 company in the Bay Area, you are likely to be handed a dense, multi-page legal document. At the onboarding stage, it is an employment contract. At the offboarding stage, it is a severance agreement. A frequent point of anxiety for professionals in San Francisco, Silicon Valley, and Oakland is whether these agreements are truly open to negotiation, or if they must be accepted as written.
In California’s highly specialized and competitive job market, initial corporate offers are rarely an employer’s final concessions. Companies expect high-caliber talent to scrutinize the fine print. However, successfully shifting the terms of your agreement requires a tactical understanding of California labor laws, an awareness of what corporate legal teams are trying to protect, and the leverage necessary to advocate for your professional worth.
Navigating Employment Contract Negotiations
When you are negotiating an incoming employment contract, your goal is to secure financial predictability and ensure that your professional mobility isn’t unfairly restricted.
Key areas ripe for negotiation include:
- The Architecture of Equity and Bonuses: Do not settle for vague promises of performance-based bonuses. Ensure your contract details precise, objective milestones. For Restricted Stock Units (RSUs) or stock options, negotiate for accelerated vesting clauses if the company is acquired or undergoes a structural change of control.
- Refining “Cause” Definitions: If your contract includes a termination clause, ensure that “Cause” is defined narrowly. Vague phrasing like “failure to meet culture expectations” leaves you vulnerable to a termination without recourse.
- Exempting Intellectual Property: California Labor Code Section 2870 limits the reach of certain employment-agreement provisions requiring employees to assign inventions developed entirely on their own time without using the employer’s equipment, supplies, facilities, or trade secret information. Ensure your contract appropriately addresses any pre-existing intellectual property, patents, or side projects you own before day one.
Proving Pretext: When a Severance Offer Conceals Wrongful Termination
Negotiating a severance package becomes a critically high-stakes endeavor if you suspect you were pushed out of the company for an illegal reason, such as reporting sexual orientation discrimination, whistleblowing, or requesting a medical accommodation.
Corporate human resource departments may characterize a termination as part of a “strategic corporate restructuring” or a “reduction in force” (RIF), even when an employee believes an unlawful reason contributed to the decision. In employment litigation, the employer’s stated reason and evidence concerning whether that reason was a pretext can become important issues.
An experienced employment lawyer evaluates a severance offer by looking past the company’s stated narrative. By analyzing behavioral evidence such as a sudden drop in your performance evaluations immediately after you raised a workplace concern, or comparative data showing that non-protected employees were retained during the RIF, an attorney can assess whether evidence supports an argument that the corporate explanation is a pretext. Evidence of pretext can significantly affect the legal and strategic considerations surrounding a severance negotiation.
The California Civil Rights Department provides additional information about California protections against workplace discrimination and retaliation.
Essential Steps to Take Before Signing
Before executing any workplace contract or release of liability, protect your career by taking these decisive measures:
- Take Your Allotted Review Time: Do not succumb to artificial HR pressures to sign immediately. For workers age 40 and older, federal law imposes specific requirements when an employer seeks a waiver of rights under the Age Discrimination in Employment Act. Depending on the circumstances, an employee generally must receive at least 21 days to consider an individual agreement or at least 45 days when the waiver is offered as part of certain group termination or exit incentive programs. The U.S. Equal Employment Opportunity Commission provides information about these Older Workers Benefit Protection Act requirements.
- Secure Your Complete Paper Trail: Compile your historical performance evaluations, commission schedules, sales data, and commendation emails onto a personal, secure device, to the extent you are legally permitted to retain those materials. Do not store your only copies of relevant personal employment records on company servers or corporate cloud networks.
- Conduct All Negotiations in Writing: Keep a detailed, written record of your contract counters and requests via email. This creates a record of the parties’ communications and proposed terms if a dispute arises later.
- Leverage State Legal Guidelines: Review the technical frameworks and public compliance resources published by regulatory bodies like the California Civil Rights Department (CRD) to better understand workplace rights and protections that may apply to your circumstances.
Aligning Your Strategy with Elite Legal Representation
Negotiating a sophisticated contract or severance package against corporate legal teams and tech-industry defense lawyers requires an advocate who knows how employers structure agreements to minimize their financial liabilities.
Lawless, Lawless & McGrath is a boutique, plaintiff-side employment law firm that has spent more than 35 years fiercely protecting the rights of executives, directors, and professionals throughout San Francisco, Silicon Valley, Oakland, and across California. Partners Barbara Lawless, Therese Lawless, and Emily McGrath bring more than 75 years of combined litigation experience. Before you sign away your legal rights or lock yourself into an unfair agreement, consult with our San Francisco Employment Contract and Severance Agreement Lawyers to secure the financial outcome and career protection you deserve.