By keeping the money, the employees' acknowledged the contract's terms as valid. Simply put, if the employees in this case had the option of undoing the contract, they lost the right to exercise that option by keeping the money for two years. First, you should know that California law does not require employers to give severance packages to fired, laid-off, or otherwise departing employees. If an employer voluntarily provides severance packages, then the employer gets to choose on what terms it will provide the benefits. For example, if the employer says it will pay severance monies with rolled pennies, hey, bring your wheelbarrow.
Some employers give severance money without requiring the employee to sign anything.
At the other extreme, some employers require that to receive severance monies, the employee must sign documents giving up the employee's right to sue the company for anything that occurred anytime during his or her employment. In the above case, the employees took the employer's monies, signed agreements saying they would never sue the employer, and then turned around and sued the employer anyway. Simply put, the judge ruled that plaintiffs' were too late in making their coercion arguments. However, keeping the money for two years, that's too long. All rights reserved.