Employee Separation Release

---
name: employee-separation-release
description: >-
  Drafts U.S. employee separation and release agreements exchanging severance
  consideration for a comprehensive release of employment-related claims, with
  OWBPA/ADEA compliance, COBRA terms, confidentiality, and post-employment
  obligations. Use when preparing separation agreements, severance packages,
  termination releases, or settling employment claims.
---

# Employee Separation and Release Agreement

Drafts a severance-backed agreement resolving employment-related claims and establishing post-employment obligations under U.S. law.

## Prerequisites

Gather before drafting:

- Employer entity, address, authorized signatory
- Employee name, address, title, start date, separation date
- Separation reason; disputed issues or pending claims
- Final pay: wages through separation, PTO/vacation payout, bonuses/commissions, expense reimbursements
- Severance: amount, schedule, method, conditions
- Benefits: COBRA notice timing, any employer subsidy
- Equity treatment: options/RSUs/units and governing plan docs
- Existing agreements: confidentiality/IP, noncompete, non-solicit, arbitration
- Governing law, forum, dispute resolution preference
- Employee age; whether part of a group termination (OWBPA disclosure data if applicable)
- Company property inventory and return process

## Workflow

1. Build a fact sheet from prerequisites; confirm missing items with the user.
2. Assemble agreement sections in the order below.
3. Insert optional clauses where triggered.
4. Run the compliance checklist and correct gaps.

## Section Order

| # | Section | Key Content |
|---|---------|-------------|
| 1 | Opening and Recitals | Parties, effective date, separation context; keep factual, non-admission |
| 2 | Separation Terms | Last day, final wages, PTO payout, commissions/bonuses, expense reimbursements; tie to state law |
| 3 | Return of Property | Items, deadline, certification of return, access revocation |
| 4 | Consideration | Severance amount/schedule, benefits subsidy, outplacement, equity; must exceed existing entitlements |
| 5 | Release of Claims | General release of known/unknown federal, state, and local employment claims |
| 6 | Carve-outs | Non-waivable claims, agency charges, post-signing claims, unemployment, workers' comp, indemnification |
| 7 | OWBPA (age 40+) | ADEA-specific release; 21-day (individual) or 45-day (group) review period + 7-day revocation |
| 8 | Confidentiality | Company confidential info + agreement terms; include DTSA immunity notice if trade secrets involved |
| 9 | Non-Disparagement | Mutual; carve out protected activity and truthful testimony |
| 10 | Restrictive Covenants | Reaffirm prior agreements; add new only if enforceable under governing law |
| 11 | Cooperation | Reasonable post-separation cooperation with cost reimbursement |
| 12 | Non-Admission | No liability admission |
| 13 | Dispute Resolution | Governing law, forum, arbitration if chosen; preserve agency charge rights |
| 14 | General Provisions | Severability, entire agreement, amendments, waiver, notices, counterparts |
| 15 | Execution and Acknowledgments | Signatures, voluntary assent, counsel advisement, OWBPA acknowledgments |

## Optional Clauses

Insert only when triggered:

- **Noncompete** — if enforceable under governing law and role justifies it
- **No rehire** — if employer policy requires it
- **Nondisclosure of terms** — if standard in the jurisdiction
- **409A compliance** — if severance extends beyond short-term deferral safe harbor

## Compliance Checklist

- [ ] Severance clearly identified as consideration beyond what is already owed
- [ ] Final pay timing and PTO payout conform to governing state's requirements
- [ ] OWBPA notice includes correct review period (21 vs. 45 days) and 7-day revocation
- [ ] For group terminations: OWBPA disclosure of decisional unit, job titles, ages of eligible/ineligible employees attached
- [ ] Release carve-outs preserve right to file agency charges and non-waivable statutory claims
- [ ] Arbitration clause (if used) does not waive non-waivable statutory remedies
- [ ] No noncompete/non-solicit in states that prohibit or severely restrict them
- [ ] DTSA whistleblower immunity notice included when trade secrets are covered
- [ ] Confidentiality and non-disparagement terms do not restrict truthful testimony or protected activity
- [ ] Wage claim release (if included) meets enforceability requirements in governing jurisdiction
- [ ] Plain language used for consideration description, timelines, and revocation instructions