Severance Agreement And General Release for the United States

Severance Agreement And General Release Template for United States

A Severance Agreement and General Release is a legally binding contract used in the United States between an employer and a departing employee. The agreement outlines the terms of employment separation, including severance payment, benefits continuation, and a comprehensive release of potential legal claims against the employer. It must comply with federal laws such as ADEA and OWBPA, as well as applicable state laws. The document typically includes specific consideration periods and revocation rights, particularly for employees over 40 years old.

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What is a Severance Agreement And General Release?

The Severance Agreement and General Release is commonly used when terminating employment relationships in the United States, whether through layoffs, mutual separation, or other circumstances. This document serves dual purposes: providing compensation and benefits to the departing employee while protecting the employer from future legal claims. The agreement must carefully balance various federal and state legal requirements, particularly when dealing with age discrimination protections, group terminations, or specific state law requirements. Essential elements include clear severance terms, comprehensive release language, and mandatory waiting periods.

What sections should be included in a Severance Agreement And General Release?

1. Parties: Identification of employer and employee

2. Background: Context of employment and termination

3. Definitions: Key terms used throughout the agreement

4. Severance Payment: Amount, timing, and form of severance compensation

5. General Release: Comprehensive release of claims against employer

6. Consideration Period: Statutory review period (21 or 45 days) and acknowledgment

7. Revocation Period: 7-day revocation right and process

8. Governing Law: Applicable jurisdiction and choice of law

What sections are optional to include in a Severance Agreement And General Release?

1. Non-Compete Provisions: Restrictions on future employment and business activities

2. Confidentiality Obligations: Ongoing duties regarding company information and trade secrets

3. Non-Disparagement: Mutual or one-way agreement not to speak negatively about the other party

4. Benefits Continuation: Details of ongoing benefits including COBRA coverage

5. Return of Company Property: Requirements and timeline for returning company assets

6. Reference and Communications: Agreement on how future employment references will be handled

What schedules should be included in a Severance Agreement And General Release?

1. Schedule A - OWBPA Disclosure: Required disclosure for group terminations showing affected employees' ages and positions

2. Schedule B - Severance Calculation: Detailed breakdown of severance payment calculation

3. Schedule C - Company Property Checklist: Itemized list of company property to be returned

4. Schedule D - Benefits Summary: Details of any continuing benefits and their duration

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Publisher

Genie AI

Document Type

Release Agreement

Cost

Free to use
Industries

Age Discrimination in Employment Act (ADEA): Federal law requiring specific provisions for employees 40 and older, including 21-day consideration period and 7-day revocation period. Requires clear language about rights being waived.

Older Workers Benefit Protection Act (OWBPA): Federal law mandating additional requirements for group terminations, including 45-day consideration period and disclosure requirements regarding affected employees.

Fair Labor Standards Act (FLSA): Federal law governing wage and hour considerations. Certain wage claims cannot be waived in severance agreements.

Title VII of the Civil Rights Act: Federal law addressing discrimination claims and retaliation provisions that must be considered in release language.

Americans with Disabilities Act (ADA): Federal law concerning disability discrimination claims that must be addressed in release provisions.

State-Specific Severance Laws: Various state laws that may impose additional requirements on severance agreements and must be considered based on jurisdiction.

State Release Requirements: State-specific requirements for valid releases of claims, which may vary by jurisdiction.

State Non-Compete Regulations: State-specific rules governing the enforceability and requirements of non-compete provisions in severance agreements.

State Unemployment Compensation Rules: State-specific regulations regarding how severance payments may affect unemployment benefits.

State Wage and Hour Laws: State-specific requirements regarding wage payments and related claims that may affect severance terms.

COBRA: Federal law requiring continuation of health insurance coverage that must be addressed in severance agreements.

Employee Retirement Income Security Act (ERISA): Federal law governing employee benefits that must be considered when addressing benefit provisions in severance agreements.

National Labor Relations Act (NLRA): Federal law protecting employees' rights to engage in collective activity, which may limit certain release provisions.

Worker Adjustment and Retraining Notification (WARN) Act: Federal law requiring advance notice of mass layoffs, which may affect timing and terms of severance agreements.

Defend Trade Secrets Act (DTSA): Federal law requiring specific notice of whistleblower immunity in agreements that govern trade secrets or confidential information.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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