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Patrick, Esq.
Patrick, Esq., Lawyer
Category: California Employment Law
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Experience:  Significant experience in all areas of employment law.
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My company recently discovered that based on California law

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My company recently discovered that based on California law I was not making enough in salary tp qualify for being exempt and not getting overtime.
Now they want to give me a raise to bring me over the legal minimum but in return for the raise want me to sign a Confidentiality Agreement and General Realease basically saying I brought a claim (which I did not) and the raise is a settlement for that claim releasing them from all past claims and obligations.
Is it legal for me to release my rights even if I sign it?
I'm afraid if I don't sign it they will fire me.
What should I do?
Hello and thank you for entrusting me to answer your question. I am very sorry to hear about your situation and hope I can help. First, please let me clarify that I can't tell you what to do or advise you on a particular course of action, as that might be construed as "legal advice" in violation of the terms and conditions of Just Answer.

The above noted, the circumstances you describe are a bit odd. It would seem that raising an employee's salary to the level it already needed to be in order for the employee to be exempt from overtime is not really a "settlement" of any past overtime claim, but rather, simply a shift to compliance with existing law. For this reason, it is doubtful whether such agreement would be enforceable as a "settlement" of an employee's right to bring an overtime claim. Put another way, a "settlement" implies more than simply deciding to comply with the law--settlement implies compensation for a previous violation of rights.

California law prohibits employers from retaliating against employees from filing claims for overtime. If an employee in your circumstance were to file such a claim and was then terminated, they would likely have a strong case for wrongful termination.

So to reiterate, such a "settlement" is arguably unenforceable because it appears to involve no more than a shift from non-compliance to compliance with the laws governing overtime in California. This does not represent compensation for past unpaid overtime, and a court would very likely find that any such "settlement" was unconscionable, against public policy, and unenforceable due to lack of "consideration." (Each party to a contract must give something up in order for the contract to be enforceable--this is known as "consideration." Merely deciding to start complying with the law is probably not "consideration" on the part of an employer because the law already compels compliance and the employer is not "giving something up" that they would otherwise be entitled to.) If an employer fired an employee under these circumstances, the employee would very likely have a claim for wrongful termination.

I sincerely XXXXX XXXXX this information helps you and I wish you the best.

My greatest concern is that you are satisfied with the answer I provide, so please do not hesitate to contact me with follow-up questions. Although I cannot always provide good news, I hope that my answer gives you a better understanding of the law and your rights so that you can obtain the best possible result under the circumstances. Also, please bear in mind that experts are not credited for unaccepted answers, so I greatly appreciate you taking the time to "accept" my answer and leave positive feedback.

Finally, none of the above constitutes legal advice nor is any attorney client relationship created between us.
Customer: replied 5 years ago.

One follow up.

They are actually increasing my wages to $1000 over the minimum.

Does this make a difference in your response?

Seems to me your answer is still valid since there is no real consideration for the past.

They are actually increasing my wages to $1000 over the minimum. Does this make a difference in your response?

I think this puts things into a slightly more grey area, since they are technically going above and beyond the minimum legal pay requirement.

However, in general it is a huge "no no" to fold any kind of wage claim settlement into an agreement to work for a higher wage because the implied assumption is that continued employment is a precondition to be compensated for previous legal violations. I don't think the DLSE would look favorably on such a "settlement," as the employee doesn't have much of a choice to accept, reject or negotiate the offer. Quite simply, they have no leverage. Thus, there is still a decent probability that such settlement would be invalid for the reasons stated in my initial reply.

Again, my number one goal is that you are satisfied with my answer. If you are, I would greatly appreciate your "accept." If you still require further clarification, I am happy to continue assisting you.
Patrick, Esq. and other California Employment Law Specialists are ready to help you

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