The Employee Severance Agreement serves as a crucial document when terminating an employment relationship in the United States. It's commonly used during layoffs, restructuring, or mutually agreed separations to provide financial compensation while protecting both parties' interests. The agreement must comply with federal regulations including the Age Discrimination in Employment Act (ADEA) and state-specific employment laws. It typically covers severance payment terms, benefits continuation, release of claims, confidentiality obligations, and non-compete provisions where applicable.
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1. Parties: Identification of employer and employee, including full legal names and addresses
2. Background: Brief description of employment history and circumstances leading to separation
3. Definitions: Key terms used throughout the agreement
4. Severance Payment: Details of severance amount, payment schedule, and tax treatment
5. Release of Claims: Employee's waiver of legal claims against employer
6. Confidentiality: Ongoing obligations regarding company confidential information
7. Return of Property: Requirements for returning company property
8. Governing Law: Jurisdiction and applicable law
1. Non-Compete: Restrictions on future employment - include when protecting company interests from competition is crucial
2. Non-Solicitation: Restrictions on soliciting employees or customers - include when protecting company relationships is important
3. Outplacement Services: Details of career transition assistance - include when offering additional support services
4. Benefits Continuation: Terms of continued health benefits or other benefits - include when extending benefits beyond termination
5. Reference Provision: Terms regarding future employment references - include when specific reference arrangements are agreed
1. Schedule A - Severance Calculation: Detailed breakdown of severance payment calculation
2. Schedule B - Company Property Checklist: List of company property to be returned
3. Schedule C - Benefits Summary: Details of continuing benefits and COBRA rights
4. Appendix 1 - ADEA Disclosure: Required disclosure for employees over 40
5. Appendix 2 - State-Specific Notices: Any required state-specific legal notices
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