Employee Separation and Release Agreement

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

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

Section Order

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