Severance Package Example:
This severance agreement, effective [Date], is between [Employee Name] and [Employer Name].
WHEREAS, the Employee was employed by the Employer from a period of [Date] to [Date],
WHEREAS, the Employer and the Employee have agreed to terminate their employer/employee relationship effective [Date]; and
WHEREAS, both the Employer and the Employee desire to settle any actual or potential differences and disputes of their employment relationship or its termination,
THEREFORE, both parties voluntarily agree to the following terms:
- Effective as of the Severance Date, the Employee’s position with the Employer shall be terminated.
- The Employer is under no obligation to pay any sum as a result of the termination. Any payment described below will only be made following the execution of this agreement. The Employer agrees to pay the Employee an amount of [Dollar Amount] in consideration of the promises and covenants made in this agreement.
- The Employee will continue to receive insurance coverage from the Employer under the Employer’s group health and benefits plan until [Date].
- The Employer is under no obligation to pay any compensation beyond what is expressly stated in Section 2.
- Employee agrees that they will not in any way disparage the Employer, nor its subsidiaries, affiliates, officers, or stakeholders in any way, whether verbal or written.
- The Employee hereby releases the Employer and all of the Employer’s associates from any claims, liabilities, charges, or actions, whether known or unknown at the time of this agreement, to the extent that such claims are in any way connected to or arise out of the Employee’s time of employment with the Employer.
- For a period of [Number] years after the Severance Date, the Employee agrees that he or she will not attempt to directly or indirectly influence other employees to terminate their own employment with the Employer, or to accept employment elsewhere.
- On or before the Severance Date, the Employee is responsible for returning all confidential information, proprietary information and company property to the Employer. Furthermore, it is understood that the Employee will not disclose any confidential knowledge that they may have been privy to during their time of employment.
- The Employee agrees that nothing in this agreement constitutes an admission of wrongdoing by the Employer.
- The Employer makes no further agreements related to the Employee’s severance beyond what is expressly stated in this document.
- This Severance Agreement shall be governed and interpreted according to the laws of [Jurisdiction]. Any disputes arising hereunder shall also be subject to the laws of [Jurisdiction].
IN WITNESS WHEREOF, the parties have caused this Severance Agreement to be effective by affixing their signatures below.
What is a reasonable severance package?
Severance packages are typically one to two weeks for every year worked, but can be more. Middle managers and executives usually receive a greater amount.
Can I sue if I signed a severance agreement?
When an employee signs a severance agreement, it is usually accompanied by a release or waiver that relinquishes your right to sue the company. If you received a severance package without signing a waiver or release, you can sue your employer.
Can I refuse a severance package?
Yes. Your employer cannot force you to sign a severance package but can legally refuse to pay you any severance funds if you don't sign a release of claims.
How do I write a severance agreement?
Download a severance agreement template, and customize it to meet your requirements.
What should be included in a severance agreement?
- Compensation details.
- Confidentiality rules following termination.
- Date of employee's termination.
- Agreement from both parties in the form of a signature.
- Details about how long the employee will continue to have access to benefits.
- Rules indemnifying the employer from any further claims.
What is a severance package over 40 template?
A severance package for employees over the age of 40 must include information about the Age Discrimination in Employment Act, which protects workers over the age of 40 from being discriminated against based on age. If you are using a template for workers over the age of 40, make sure it clearly states the termination has nothing to do with their age.
Is a severance letter the same as a severance agreement?
Severance agreements are sometimes written in the form of letters to employees. This is sometimes called a termination letter, and it includes all of the same details that you would find in a standard severance agreement.
Why do some businesses offer severance pay?
Severance pay helps employees to stay on their feet financially while they look for a new job. Often, termination can be unexpected for the employee. A severance agreement also helps the employer to guarantee that their employee will not cause any harm to the business after being terminated.