I need more clarification and definite answers on whether or not filing a wage penalty will breach my release agreement and if so, does the company have the right to take back the severance money legally? The agreement does not state that they will attempt to the money back, if there's a breach, but I don't know if that is a standard in these types of agreements.
A: The case law that I previously cited unambiguously declares any attempt waiver or release of the right to immediate payment of final wages unlawful. Singh at 362-364 ("There is no provision in the Labor Code allowing an employer to condition the required payment of earned wages upon discharge or upon resignation on the employee's signing of a release or on any other conduct by the employee. In our view, the plain language of Labor Code sections 201 and 202 compels the conclusion that the required payment of earned wages is unconditional.")
The Singh case seems to be entirely consistent with your circumstances: your employer is conditioning final payment upon your signing a release agreement. Singh holds that such a condition is unenforceable.
Let's suppose that you sign the agreement, wait until after all of the severance is paid, and then file the wage penalty claim. The employer will claim that it has a release. You will claim that Singh holds the release unenforceable as to the wage penalty. I'm not the judge at the Labor Commissioner hearing, so I can't give you an absolutely definitive answer. But, it seems to me that you must win this argument.
Let's further suppose that the employer appeals the case to the Superior Court, and further claims that it is entitled to recover the severance pay, because you are in breach of the release agreement. Assuming that the Court holds that the release is unenforceable as to the wage penalty, but that the remainder of the agreement is enforceable, then you win.
Is it possible that the Court could determine that the employer was mistaken about its rights, that it would never have entered into the original severance and release agreement had it known you had the right to the wage penalty? Sure, that's possible. But, the law requires employers to pay final wages immediately upon termination of employment -- so, I can't see how the court would rule that this was an "honest mistake," entitling the employer to rescission. The release agreement is intended to protect the employer from being sued for unlawful discrimination -- not to release the employer from its obligations to follow the requirements of the Cal. Labor Code.
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