Separation Agreement

Separation agreements are also called severance agreements and termination agreements. They often include one or more among severance, non-disclosure and non-compete clauses.

A separation agreement specifies the terms of your employment termination when you quit, or get fired or laid off. It might waive some of your employee rights, such as your right to sue your former employer for discrimination.

As with a severance agreement, your employer likely may require you sign a separation agreement to receive your severance pay or extra severance pay.

Your employer may not, however, coerce you into signing a separation agreement, such as by withholding final pay you've already earned.

Separation agreements may work the other way around too. For example, if your employer would like for you to resign, but wants to avoid the potential legalities in forcing you to resign, then you might have leverage to negotiate a separation agreement to your advantage, such as receiving severance pay and uncontested unemployment benefits.

Consider consulting an attorney if you don't feel comfortable negotiating a separation agreement on your own (or if your employer is forcing you to resign).

Separation agreements are generally enforceable in the states if they are reasonable in scope when waiving employee rights, and employees had knowingly and voluntarily consented to the waivers.

Once signed, it typically takes a court decision to determine whether or not a particular separation agreement is reasonable in scope, and whether or not the employee "knowingly and voluntarily" consented to the waivers within. But, the power of an attorney behind you might enable you to negotiate revisions to (or break) a separation agreement out of court.

If you have questions or doubts about signing a separation agreement, then it's a good idea to consult an attorney. To avoid enforceability problems, your employer likely will give you a reasonable amount of time to sign, so that you may consult an attorney first. In fact, your employer must give you at least 21 days to consult an attorney, if signing waives your right to pursue an age discrimination claim under the ADEA.

Consulting an attorney first will likely cost a fee, but it could save you much heartache and more in legal expenses down the road.

See About Employment Contracts and Agreements for additional information.