Severance Agreement and Release

Pay a departing employee something in exchange for a release of claims, done properly: the Older Workers Benefit Protection Act periods for employees 40 and over, protected rights preserved, and everything the employee keeps spelled out.

An agreement between an employer and a departing employee under which the employer pays severance and other benefits the employee is not otherwise owed, and the employee releases all claims against the employer, keeps the terms confidential and agrees not to disparage the company. Both sign.

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What it covers

When to use it

What it does not do

Signing, witnesses and delivery

The agreement

Severance Agreement and General Release

This Severance Agreement and General Release (the "Agreement") is made between [Employer legal name], including its parents, subsidiaries, affiliates, successors and assigns (the "Company"), and [Employee full legal name], residing at [Employee home address] (the "Employee"). The Employee’s employment with the Company as [Employee’s last position] ends on the Separation Date stated below. The Company will provide severance benefits to which the Employee is not otherwise entitled in exchange for the release and other promises in this Agreement. The Company and the Employee are each a "Party".

1. Separation; Final Pay

The Employee’s last day of employment is [Separation date] (the "Separation Date"). Whether or not the Employee signs this Agreement, the Company shall pay all wages earned through the Separation Date, accrued unused paid time off to the extent payout is required by Company policy or law, and properly submitted expenses, less withholdings, by the date the law requires. Benefit plan participation ends on the Separation Date or as the plans provide, except as continued under Section 2. The Employee acknowledges that with these payments the Employee has received all compensation owed through the Separation Date.

2. Severance Benefits

Provided the Employee signs this Agreement within the period in Section 5, does not revoke it, and complies with it, the Company shall provide the following (the "Severance Benefits"), which exceed anything otherwise owed: (a) severance pay in the gross amount of [Severance pay (gross total)], less withholdings, paid [How severance is paid] ([Weeks of salary continuation (or 0 if lump sum)] weeks, where applicable), beginning on the first regular payroll date after the Effective Date; (b) if the Employee timely elects COBRA continuation coverage, payment of the full premium for the Employee and covered dependants at the level in effect on the Separation Date for [Months of employer-paid COBRA premium (or 0)] months, or until the Employee becomes eligible for another employer’s group coverage, whichever is earlier; and (c) the following: [Other severance benefits (or "None")]. If any number above is zero, that component does not apply. The Severance Benefits are intended to comply with or be exempt from Section 409A of the Internal Revenue Code.

3. General Release of Claims

In exchange for the Severance Benefits, the Employee, for the Employee and the Employee’s heirs and assigns, releases and forever discharges the Company and its current and former owners, directors, officers, employees, agents, insurers and benefit plans (the "Released Parties") from all claims, liabilities and damages of every kind, known or unknown, arising out of any act, omission or event on or before the date the Employee signs this Agreement, including claims arising out of the Employee’s employment or its termination. This release includes claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the Equal Pay Act, the Employee Retirement Income Security Act (other than vested benefits), 42 U.S.C. §1981, every state and local anti-discrimination, wage, leave and whistleblower statute, and all claims for wrongful discharge, breach of contract, defamation, emotional distress, unpaid compensation and attorney fees, to the fullest extent permitted by law. It does not waive: (a) any claim that cannot be released by private agreement, including unemployment and workers’ compensation benefits; (b) vested retirement benefits; (c) any claim arising after the Employee signs; (d) the right to enforce this Agreement; or (e) any right to indemnification.

If the Employee lives or worked in California, the Employee expressly waives California Civil Code §1542, which states: "A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party." The Employee accepts that this release covers unknown claims.

4. Protected Rights

Nothing in this Agreement prevents the Employee from filing a charge with, or participating in an investigation by, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Securities and Exchange Commission or any other government agency, from testifying truthfully in any proceeding, from disclosing information about unlawful acts in the workplace, including harassment or discrimination, or from exercising rights under Section 7 of the National Labor Relations Act. To the fullest extent permitted by law, however, the Employee waives any right to recover money or other individual relief from the Released Parties in connection with such a charge, other than a government agency award for information provided to it.

5. Older Workers Benefit Protection Act; Review and Revocation

This Agreement releases claims under the Age Discrimination in Employment Act. As the Older Workers Benefit Protection Act requires, the Employee acknowledges that the Employee (a) has read this Agreement and understands it; (b) is hereby advised in writing to consult an attorney before signing it and has had the opportunity to do so; (c) is receiving consideration beyond anything already owed; (d) has been given [Days the employee has to consider this agreement] days after receiving this Agreement to consider it, and may sign sooner only by the Employee’s own free choice; (e) may revoke this Agreement within seven (7) days after signing by written notice to the Company at the email address used to send it; and (f) understands that this Agreement does not become effective until the eighth (8th) day after signing without revocation (the "Effective Date"). Changes to this Agreement do not restart the review period. An Employee under forty (40) receives the same periods. If the Employee revokes, this Agreement is void and no Severance Benefits are paid.

6. Return of Company Property; Continuing Obligations

By [Company property to be returned by], the Employee shall return all Company property, including laptops, phones, badges, keys, cards, documents and data, shall permanently delete Company information from personal devices and accounts, and shall certify in writing that this has been done. The Employee’s obligations under any confidentiality, invention assignment, non-solicitation or non-compete agreement previously signed remain in force, except that a non-compete is enforceable only to the extent the law of the state where the Employee lives and works permits.

7. Confidentiality of this Agreement; Non-Disparagement

Subject to Section 4, the Employee shall keep the amount of the Severance Benefits confidential, except for disclosure to the Employee’s spouse or partner, attorneys, tax and financial advisors, and taxing authorities, and as required by law. Nothing in this Section restricts the Employee from disclosing the facts of any claim of discrimination, harassment, retaliation or other unlawful conduct, or from discussing wages or working conditions with others.

Subject to Section 4, the Employee shall not make any statement, in any medium, that is knowingly false and intended to damage the reputation of the Company, its products or its officers, and the Company shall instruct its senior leaders who know of this Agreement not to make any knowingly false statement intended to damage the Employee’s reputation. Truthful statements in legal proceedings, to government agencies, or in the exercise of rights protected by the National Labor Relations Act do not breach this Section.

8. Employee Representations; No Re-Employment

The Employee represents that, as of signing, the Employee (a) has reported any work-related injury; (b) has received all leave to which the Employee was entitled; (c) has not filed any undisclosed claim or charge against a Released Party; (d) has not assigned any released claim; and (e) has reported to the Company any conduct the Employee believes violates the law. The Employee agrees that the employment relationship is permanently ended, waives any right to future employment with the Company, and agrees that the Company may treat this Agreement as a legitimate reason to decline a future application.

9. Cooperation; References

For twelve (12) months after the Separation Date, the Employee shall reasonably cooperate with the Company, at convenient times and at the Company’s expense for out-of-pocket costs, in transitioning the Employee’s duties and in any investigation or proceeding within the Employee’s knowledge. The Company shall direct reference requests to [Reference inquiries directed to (name or department)], which shall confirm only dates of employment and last position unless the Employee authorizes more in writing.

10. No Admission; Governing Law

This Agreement is not an admission of wrongdoing or liability by either Party. It is governed by the laws of the State of [Governing law (state)], without regard to conflict-of-laws principles, and by applicable federal law, and any dispute shall be brought in the state or federal courts in that state. If the Employee breaches Section 6, 7 or 9, the Company may cease unpaid Severance Benefits in addition to any other remedy, but the release in Section 3 remains in full effect.

11. Entire Agreement; General

This Agreement is the entire agreement between the Parties about the Employee’s separation and supersedes all prior discussions on that subject, except the continuing obligations in Section 6. The Employee has not relied on any promise not contained in it. It may be amended only in a writing signed by both Parties. If any provision other than the release is held unenforceable, it shall be severed and the remainder continues. This Agreement may be signed electronically and in counterparts, and the electronic execution record, timestamps and document fingerprints kept by the signing platform are conclusive evidence of when it was delivered and when each Party signed. Signed for the Company by [Name and title of the person signing for the employer]. THE EMPLOYEE HAS READ THIS AGREEMENT, UNDERSTANDS IT, HAS HAD THE OPPORTUNITY TO CONSULT A LAWYER, AND SIGNS IT VOLUNTARILY.

Signatures

Employer · Employee

Severance Agreement FAQ

Does the employee have to sign to receive their final paycheck?

No. Final wages, accrued paid time off where state law or company policy requires payout, and unreimbursed expenses are owed regardless and must be paid within the time state law sets, which in some states is the day of termination. The agreement says so. Only the severance pay and other extras are conditioned on signing and not revoking.

What are the 21-day and 7-day periods?

The Older Workers Benefit Protection Act says a release of age discrimination claims by an employee 40 or older is not knowing and voluntary unless the employee is advised in writing to consult a lawyer, is given at least 21 days to consider the agreement (45 days in a group layoff), and may revoke it within 7 days after signing. The agreement contains all three. An employee under 40 does not need these periods, but many employers give them anyway; it costs nothing and makes the release harder to challenge.

What claims does the release cover?

Every claim the employee has or might have against the company as of the date they sign, known or unknown, including discrimination, harassment, retaliation, wrongful termination, breach of contract and wage claims, with the major federal statutes named. It does not release claims that cannot legally be waived, claims arising after signing, vested benefits, unemployment or workers’ compensation, or the right to file a charge with a government agency (though the employee gives up any money from such a charge, other than an SEC whistleblower award).

Can the non-disparagement clause stop the employee talking about what happened?

Not entirely, and it should not try. Federal labor law protects non-supervisory employees’ right to discuss working conditions with each other and the public, and the NLRB has found broad non-disparagement and confidentiality clauses in severance agreements unlawful. A growing list of states also forbids clauses that silence employees about harassment, discrimination or other unlawful conduct. The clause here bars false and malicious statements about the company and its people, and expressly preserves truthful statements about unlawful conduct, agency reports and protected concerted activity.

Can I leave the severance amount blank for the employee to fill in?

You can, though it is unusual. Any blank you leave becomes a field the employee completes when they open the link, and you see it before you countersign. The typical use is the reverse: the employer fills in every term and the employee only signs, after their review period. If you are still negotiating, agree the number first and send the final agreement once, so the review period starts on the final version.

How much severance is typical?

One to two weeks of base pay per year of service is the common floor for staff, with a minimum of two to four weeks; executives often receive three to twelve months plus continued health coverage. Whatever the number, it must be something the employee was not already entitled to, or there is no consideration for the release. If an employment agreement or policy already promises severance, the release must be supported by something beyond that promise.

Related templates

This template is general information, not legal advice. Laws differ by state; review anything important with a lawyer.

Severance agreement and general release