Uncompetitive bankruptcies are another area you need to pay attention to. Because some states have limited their scope of application through laws or court orders, “competition prohibitions in severance pay agreements may raise issues,” Rees said. For example, non-compete prohibitions are generally not applicable in California. A severance package is a collection of wages and benefits that a company offers to an employee after their involuntary separation from the company. Severance pay generally applies to employees who dismiss, dismiss or retire. In the event of termination, the company can offer a set of severance payments (or perhaps a set of additional compensation) to encourage people to sign the separation contract. The package can include a large number of benefits such as additional payments, stock options or health/dental insurance. .