Severance Agreement

A severance agreement offers compensation or benefits at employment separation in exchange for defined releases and continuing obligations, subject to wage, discrimination, notice, tax, and review-period rules.

A useful document turns the parties' actual arrangement into measurable duties, approvals, timing, remedies, and a reliable execution record. Its terms should be reconciled to the transaction rather than copied from an unrelated form.

• An employer offers additional pay for a release at termination
• A layoff or negotiated departure includes benefits, equity, reference, transition, or return obligations
• An executive’s employment agreement requires a separation instrument

The document name alone does not determine the right structure. Consider a different instrument or qualified legal review when any of these conditions applies:

• Do not condition wages, reimbursable expenses, vested benefits, or other amounts already owed on a new release.
• Do not use overbroad confidentiality, nondisparagement, cooperation, or release terms that restrict statutory reporting, labor rights, or claims that cannot be waived.

Record exact facts before clauses are written. Names, authority, dates, amounts, defined terms, dependencies, and incorporated materials should be verifiable and consistent.

• Employer, employee, age, location, role, separation date, reason, and existing agreements
• Final wages, accrued time, bonus, commission, equity, benefits, COBRA, severance, and payment timing
• Released and excluded claims, consideration, counsel notice, review and revocation periods, and group disclosures
• Property, confidentiality, protected activity, reference, cooperation, non-disparagement, tax, and rehire status

These decisions shape the allocation of responsibility and should not be left for boilerplate to decide:

• Which consideration is new and supports the release
• Which claims may lawfully be waived and which remain
• Which review, revocation, notice, and group-disclosure rules apply
• How final pay, benefits, equity, reference, confidentiality, and cooperation operate

• Separation facts and amounts already owed
• Severance consideration, benefits, equity, tax, and payment conditions
• Release of claims and excluded or protected rights
• Review, revocation, counsel, age-discrimination, and group-program terms
• Property, confidentiality, cooperation, reference, restrictive covenants, and enforcement

Every provision should use the same parties, dates, standards, defined terms, and document hierarchy. A clause that is reasonable by itself can still create a conflict when it is not reconciled with payment, default, termination, or another exhibit.

1. 01Describe the intended result and the relationship in plain language.
2. 02Confirm parties, authority, governing jurisdiction, dates, money, property, services, and approvals.
3. 03Resolve the key decisions and identify every schedule, exhibit, disclosure, consent, or filing.
4. 04Draft the provisions as one consistent system, then review the complete execution set before signature.

Defective releases and unlawful confidentiality can invalidate value and invite agency scrutiny. Final wage deadlines, group-layoff disclosures, tax treatment, benefit plans, and local laws require exact coordination.

The main agreement may establish the framework while schedules, exhibits, disclosures, consents, or operational records supply transaction-specific details.

• Separation-pay and benefit calculation
• Required age-discrimination or group disclosure
• Return-of-property, reference, equity, and benefits documents

Each incorporated document should be identified precisely, use the same names and effective date, and follow a stated order of precedence if terms conflict.

Calculate final pay separately, deliver all required disclosures together, preserve review time, track revocation, collect property, coordinate benefits and equity, and release severance only under the signed timing rules.

• Confirm legal names, roles, capacity, addresses, and signing authority
• Reconcile dates, amounts, definitions, cross-references, schedules, and exhibits
• Confirm that duties, deadlines, approvals, acceptance standards, and payment triggers are measurable
• Check that default, termination, remedies, and surviving obligations work together
• Complete jurisdiction-specific forms, notices, witnesses, notarization, filings, or professional review when applicable
• Deliver and preserve the complete signed package with its incorporated documents

These sources provide federal, state-resource, regulatory, or institutional context. They do not replace checking the law and required forms applicable to the parties, transaction, and governing jurisdiction.

1. Source 1

   Manager Responsibilities — Waivers of Discrimination Complaints

   U.S. Equal Employment Opportunity Commission. Current official guidance on knowing, voluntary, and legally limited employment-discrimination waivers.

2. Source 2

   COBRA Continuation Coverage

   U.S. Department of Labor. Official federal continuation-coverage resources.

3. Source 3

   McLaren Macomb

   National Labor Relations Board. Official NLRB case materials relevant to severance restrictions.

4. Source 4

   Publication 15

   Internal Revenue Service. Federal employer tax guidance relevant to severance payroll.