Employee Separation and Release Agreement

Drafts a severance-backed agreement resolving employment-related claims and establishing post-employment obligations under U.S. law.

Prerequisites

Gather before drafting:

Employer entity, address, authorized signatory
Employee name, address, title, start date, separation date
Separation reason; disputed issues or pending claims
Final pay: wages through separation, PTO/vacation payout, bonuses/commissions, expense reimbursements
Severance: amount, schedule, method, conditions
Benefits: COBRA notice timing, any employer subsidy
Equity treatment: options/RSUs/units and governing plan docs
Existing agreements: confidentiality/IP, noncompete, non-solicit, arbitration
Governing law, forum, dispute resolution preference
Employee age; whether part of a group termination (OWBPA disclosure data if applicable)
Company property inventory and return process

Workflow

Build a fact sheet from prerequisites; confirm missing items with the user.
Assemble agreement sections in the order below.
Insert optional clauses where triggered.
Run the compliance checklist and correct gaps.

Section Order

| # | Section | Key Content | |---|---------|-------------| | 1 | Opening and Recitals | Parties, effective date, separation context; keep factual, non-admission | | 2 | Separation Terms | Last day, final wages, PTO payout, commissions/bonuses, expense reimbursements; tie to state law | | 3 | Return of Property | Items, deadline, certification of return, access revocation | | 4 | Consideration | Severance amount/schedule, benefits subsidy, outplacement, equity; must exceed existing entitlements | | 5 | Release of Claims | General release of known/unknown federal, state, and local employment claims | | 6 | Carve-outs | Non-waivable claims, agency charges, post-signing claims, unemployment, workers' comp, indemnification | | 7 | OWBPA (age 40+) | ADEA-specific release; 21-day (individual) or 45-day (group) review period + 7-day revocation | | 8 | Confidentiality | Company confidential info + agreement terms; include DTSA immunity notice if trade secrets involved | | 9 | Non-Disparagement | Mutual; carve out protected activity and truthful testimony | | 10 | Restrictive Covenants | Reaffirm prior agreements; add new only if enforceable under governing law | | 11 | Cooperation | Reasonable post-separation cooperation with cost reimbursement | | 12 | Non-Admission | No liability admission | | 13 | Dispute Resolution | Governing law, forum, arbitration if chosen; preserve agency charge rights | | 14 | General Provisions | Severability, entire agreement, amendments, waiver, notices, counterparts | | 15 | Execution and Acknowledgments | Signatures, voluntary assent, counsel advisement, OWBPA acknowledgments |

Optional Clauses

Insert only when triggered:

Noncompete — if enforceable under governing law and role justifies it
No rehire — if employer policy requires it
Nondisclosure of terms — if standard in the jurisdiction
409A compliance — if severance extends beyond short-term deferral safe harbor

Compliance Checklist

[ ] Severance clearly identified as consideration beyond what is already owed
[ ] Final pay timing and PTO payout conform to governing state's requirements
[ ] OWBPA notice includes correct review period (21 vs. 45 days) and 7-day revocation
[ ] For group terminations: OWBPA disclosure of decisional unit, job titles, ages of eligible/ineligible employees attached
[ ] Release carve-outs preserve right to file agency charges and non-waivable statutory claims
[ ] Arbitration clause (if used) does not waive non-waivable statutory remedies
[ ] No noncompete/non-solicit in states that prohibit or severely restrict them
[ ] DTSA whistleblower immunity notice included when trade secrets are covered
[ ] Confidentiality and non-disparagement terms do not restrict truthful testimony or protected activity
[ ] Wage claim release (if included) meets enforceability requirements in governing jurisdiction
[ ] Plain language used for consideration description, timelines, and revocation instructions