The Separation Agreement Mutual Release is essential when employment relationships are terminated to ensure a clean break between parties and minimize future legal risks. This document is commonly used in the United States for both individual and group terminations, whether voluntary or involuntary. It outlines severance terms, continues certain obligations (such as confidentiality), and includes comprehensive releases of claims by both parties. The agreement must comply with various federal and state requirements, particularly regarding age discrimination claims and consideration periods. It serves as a crucial risk management tool for employers while providing clarity and certain benefits to departing employees.
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1. Parties: Identification of the employer and employee entering into the agreement
2. Background/Recitals: Context of the separation and purpose of the agreement
3. Definitions: Key terms used throughout the agreement including relevant dates, payment amounts, and specific terms
4. Separation Date: Specified date of employment termination and details of final employment status
5. Consideration: Details of severance payment, benefits, and other compensation being provided in exchange for the release
6. General Release: Mutual waiver of claims between parties, including specific statutory references and carve-outs
7. Confidentiality: Obligations regarding non-disclosure of agreement terms and company information
8. Governing Law: Jurisdiction and applicable law governing the agreement
1. Non-Compete: Restrictions on future employment and timeframe for such restrictions
2. Non-Solicitation: Restrictions on soliciting employees, customers, or business partners
3. Return of Property: Process and timeline for returning company property and confirmation of compliance
4. References: Agreement on handling employment references and authorized company statements
5. Cooperation: Terms for post-employment assistance and cooperation in ongoing matters
1. Schedule A - Severance Calculation: Detailed breakdown of severance payment and payment schedule
2. Schedule B - Benefits Continuation: Details of ongoing benefits coverage and duration
3. Schedule C - Company Property: Itemized list of company property to be returned
4. Appendix A - ADEA Disclosure: Required age discrimination disclosure for group terminations including eligibility factors
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