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socrateaser
socrateaser, Lawyer
Category: California Employment Law
Satisfied Customers: 34141
Experience:  Retired (mostly)
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state of California: I was terminated in a hostile takeover.

Customer Question

state of California: I was terminated in a hostile takeover. I was given a severance. They now want me back and have asked for part of the severance back. This severance payback will be in the form of me not having a car plan for 3 years (im in sales... car plans are normal).

They want me to sign an offer letter that states if I leave the company (or get terminated for cause) than I will still payback the remaining severance.

Is this enforceable? Is an offer letter like a contract?
Submitted: 2 years ago.
Category: California Employment Law
Expert:  socrateaser replied 2 years ago.
If you were terminated, then the employer may be committing a misdemeanor by demanding the return of any portion of the severance as part of an agreement to reemployee you. See Labor Code 450.

You can complain to the DLSE.

Hope this helps.

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Customer: replied 2 years ago.
Thanks very helpful. Is there a public link to the state of california for labor code 450?
You say "May" be comitting a misdemeanor.

The original severance payment from the company that was taken over was predicated on my signing a document stating that in the future I will not sue them. Does this give them more leverage to do this and not be illegal?

Orig severance=$60K
remainder to "payback" in offer letter signing=$25K

Is my signing the offer letter enforceable as a contract?
Can they legally tell me that if there is any future severance than it will be reduced by$20K?
Is there a state law involving minimal severance?

If I sign this offer letter...what if they terminate me one year into this and I have paid back partial (no car plan@ $700/month) Will I be obligated by law to payback the remainder and then on top off that have a severance package that is lowered by $20K ?

Expert:  socrateaser replied 2 years ago.
Thanks very helpful. Is there a public link to the state of california for labor code 450?

A: Labor Code 450

You say "May" be comitting a misdemeanor.

A: Covering my "assets."

The original severance payment from the company that was taken over was predicated on my signing a document stating that in the future I will not sue them. Does this give them more leverage to do this and not be illegal?

A: In my opinion, it gives them no leverage, because if you were paid in exchange for an agreement to not sue, then the money is yours in exchange for that agreement. The demand to be paid for reemployment is not an act that occurred during your employment -- it's a new act -- and if it's determined to be illegal, then it cannot be waived by a contractual agreement to not sue, because a contract with an illegal purpose is void "ab initio" (lat. trans: from the outset).

Is my signing the offer letter enforceable as a contract?

A: In my opinion, it would be an unenforceable illegal contract -- see above.

Can they legally tell me that if there is any future severance than it will be reduced by$20K?

A: Severance is not required by any law. So, they can say whatever they want, because it's entirely up to them as to what they will or will not pay.

Is there a state law involving minimal severance?

A: Nope. See above.

If I sign this offer letter...what if they terminate me one year into this and I have paid back partial (no car plan@ $700/month) Will I be obligated by law to payback the remainder and then on top off that have a severance package that is lowered by $20K ?

A: You could sign the letter and then file a complaint with DLSE. If the offer turns out to be illegal, then your complaint will automatically immunize you from termination. Labor Code 98.6(b) -- whether or not the contract turns out to be illegal.

Hope this helps.


And, if you need to contact me again, please put my user id on the title line of your question (“ToCustomerrdquo;), and the system will send me an alert. Thanks!

socrateaser, Lawyer
Satisfied Customers: 34141
Experience: Retired (mostly)
socrateaser and other California Employment Law Specialists are ready to help you
Customer: replied 2 years ago.
You are awesome! one thing I forgot to mention/ask. They worded the payback of the severance as more of a loan:

The Offer:

"When you were laid off on Oct 13 Company paid you a severance of $63K. Upon rehire Company agrees that you retain $38K. In lieu of the immeidate repayment of the balance of the severance, the company agrees to provide an interest freeloan in the amount of $25K with scheduled repayments of $700/month due on the first pay period of each month. Payroll will automatically credit you for this payment."

Does this wording change anything you have written so far? Any new advice?
Expert:  socrateaser replied 2 years ago.
You're being charged consideration for the privilege of employment and that is illegal, in my view. The offer letter is the "thing of value," and you're being charged a very substantial amount of money for that. In effect, you are literally paying for part of your own wages until the loan is extinguished.

Hope this helps.


And, if you need to contact me again, please put my user id on the title line of your question (“ToCustomerrdquo;), and the system will send me an alert. Thanks!


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