Safe Separations

Employee separations are increasingly more frequent in today’s economic environment. At the same time, ever-expanding employee rights combined with a poor job market may make departing employees more likely than ever to sue. 

Many employers mitigate this risk by offering a severance payment to their departing employees in exchange for a release of claims and other promises by the employee.   However, too often employers take a "one size fits all" approach to separation agreements.  In order to get what they pay for, businesses need to ensure that their separation agreements are tailored to the individual circumstances and protect the company’s interest to the fullest extent permitted by applicable law.

Separation agreements should include the following key provisions:

  • Condition severance payments on a general release.
  • General releases must be state specific.
  • Releases of some claims may not be enforceable – include an acknowledgement that the employee has received everything to which s/he is entitled.
  •  Individual or group releases for employees age 40 or older must meet the Older Workers Benefit Protection Act requirements to be effective.
  • Require the employee to return all company property before receiving any payment.
  • Further protect the company with restrictive covenants and confidentiality and non-disparagement clauses.