Free Severance Agreement Template
Navigating the end of an employment relationship can be smoother with a Severance Agreement. Read on to understand its essentials and access a straightforward, downloadable template to get started.
What is a Severance Agreement?
At its core, a Severance Agreement is a contract between an employer and an employee. It outlines the terms and conditions of an employment termination, typically when an employee is laid off or let go for reasons other than misconduct.
More than just a document, it’s a safety net and a sign of mutual respect.
Why Should You Consider a Severance Agreement?
If you’re an employer, offering a Severance Agreement can demonstrate that you value your employees, even when parting ways. For employees, it provides clarity and a certain level of assurance during an uncertain period.
Key Components of a Severance Agreement
Understanding the main elements of a Severance Agreement can help both employers and employees navigate the end of an employment relationship with clarity. Here are some vital components:
- Severance Pay: Typically, this involves a lump sum or a series of payments provided to the departing employee. The amount is often determined based on factors such as the employee’s tenure, job role, and the nature of their exit.
- Benefits Extension: Besides monetary compensation, employees might continue to receive certain benefits like health insurance, retirement contributions, or other perks for a set duration after leaving.
- Release of Claims: A crucial component that safeguards employers. By agreeing to this, employees usually commit to refraining from legal actions against the company concerning their employment or its termination.
- Confidentiality and Non-Disparagement: These clauses protect a company’s proprietary information and reputation. The employee agrees to keep sensitive information confidential and abstain from making negative comments about the company.
- Property and Information Return: This stipulates the process for handing back company property, like electronic devices or badges, and ensures any sensitive or proprietary data in the employee’s possession is returned or deleted.
Grasping these core elements ensures that both parties are on the same page and can move forward with transparency and mutual respect.
Additional Provisions to Note
It’s not all about money. There are often clauses in a Severance Agreement that deal with future interactions and obligations:
- Non-Disparagement: This clause ensures both parties part on good terms, with neither making negative remarks about the other.
- Confidentiality: Here, the departing employee agrees to keep company secrets, well, secret!
- Property Return: It outlines how company-owned items like laptops or ID cards should be returned.
How to Fill Out and Use the Free Severance Agreement Template
Navigating the end of an employment relationship can be straightforward with our free Severance Agreement template. Here’s a step-by-step guide to help you fill it out correctly:
Step 1: Enter the Agreement Date
Begin by filling out the
[AGREEMENT DATE] which is the date when this agreement becomes effective. For example:
March 10, 2023.
Step 2: Provide Names of Both Parties
You’ll need to specify the names of the parties involved:
[EMPLOYEE NAME]with the full name of the employee. For instance:
- Similarly, replace
[EMPLOYER NAME]with the name of the company or employer. Example:
Step 3: Define the Termination Date
State the exact date when the employee’s association with the company will officially end by filling in the
[TERMINATION DATE]. This might be
March 30, 2023, for instance.
Step 4: Determine the Severance Amount
Specify the compensation the employee will receive after the termination by replacing
[SEVERANCE AMOUNT]. This could be a lump sum amount like
$20,000 or any agreed-upon figure.
Step 5: Address Non-Disparagement
This section ensures that the employee won’t make negative comments about the employer or its associated individuals, products, or services.
Step 6: Understand Liability Release
The employee, by signing, agrees not to hold the employer liable for any claims, making it a critical aspect of the agreement.
Step 7: Clarify Non-Solicitation Terms
This segment dictates that the employee will not persuade or approach any of the company’s employees to leave or join another entity for a span of 5 years.
Step 8: Handle Company Property
Ensure that all company property in the employee’s possession, including confidential information, is returned by the specified
Step 9: Emphasize Confidentiality
The employee agrees to keep the agreement’s details a secret for 5 years, reinforcing the importance of discretion.
Step 10: No Admission of Liability
This section is a reminder that the agreement isn’t an admission of any wrongdoing by the employer.
Step 11: Finalize the Agreement’s Governing Law
[JURISDICTION] with the relevant jurisdiction, such as
California, to state where the agreement’s laws and regulations apply.
Step 12: Signatures
Both parties, the employee and the employer, need to sign, print their names, and date the agreement at the end, signifying their acceptance of the terms.
Once all these steps are complete, ensure that both parties receive a copy of the signed Severance Agreement. It’s always wise to consult with a legal expert before finalizing any agreements to make sure all parties’ interests are protected.