Layoffs, clawbacks, and severance: what you can actually negotiate
With the market uncertainty these days and many recent layoffs, we've received a lot of questions about severance packages, sign-on bonus clawback clauses,...
Hi friend,
With the market uncertainty these days and many recent layoffs, we've received a lot of questions about severance packages, sign-on bonus clawback clauses, what can be negotiated, and more. Here are some things to think about:
1️⃣ The new California clawback law
(Even if you’re outside California, it’s worth keeping an eye on since other states often follow California’s lead.)
California recently passed a new law called Assembly Bill (AB 692) tightening the rules around sign-on bonuses and repayment clauses (sometimes called “clawbacks”).
It’s meant to ensure that these clauses are fair, clearly written, and not overly punitive if an employee leaves a company. For example, repayment cannot drag out for years, and if you’re let go involuntarily, companies generally cannot demand the money back.
The law took effect January 1 of this year and applies only to new agreements signed after that date.
California wants employees to feel free to move, not trapped by repayment clauses. This law puts clearer boundaries around what's reasonable.
2️⃣ Severance and layoffs
Severance packages are not one-size-fits-all. They depend on your role, seniority, and the company’s circumstances.
It’s always worth asking whether there's flexibility, especially if you’ve been with the company for a while or hold a leadership role.
Certain factors can change how much leverage you have. If you were part of a mass layoff, you likely don’t have much leverage. If it was a one-off firing though, especially if you’re part of a protected class and you believe that you could have been discriminated against, it’s worth clarifying your options.
💡Remember, the two times you have the most leverage are when you're getting the job and when you're leaving the job. That’s why we help negotiate job offers, and rarely take promotion cases anymore.
3️⃣ Non-competes and NDAs
Whether or not non-competes are enforceable varies by state, but in California, not only are they not enforceable, you can actually report the company even for simply having the clause in the employment agreement. ‼️
NDAs are typically valid when used to protect genuine company information, but not if they’re used to silence or restrict someone’s future work.
Remember: do NOT sign anything you don't understand, and if a clause feels overly broad or confusing, it’s worth asking questions before signing.
💡Ultimately, it's not about what clauses or the fine print are called, it’s about what they actually do.
Warmly,
Gerta & Alex
Co-founders, YourNegotiations.com
P.S. Are you job searching or have upcoming negotiations?
Book a free call with us, where we’ll learn more about your situation, offer some free tips, and explore if we’re a good fit to work together: https://calendly.com/alexhapki/call
P.P.S. Know someone interested in negotiations?
Send them our way and we’ll thank you with $500 for each person who becomes a client. No cap.
A quick intro or an email to alex@yournegotiations.com works.