What is a Severance Agreement?
In the absence of a contract that obligates an employer to provide benefits beyond COBRA health coverage to a terminated employee, there is no legal obligation for most employers to do so. Nevertheless, many employers voluntarily choose to offer an employee a severance package upon the termination of the employee’s employment. In order to receive the benefits offered by the employer, the employee will be asked to sign a Severance Agreement, sometimes referred to as a Separation Agreement or a Termination Agreement. Such Agreements typically state that the employee’s acceptance of the benefits provided in the Severance Agreement constitutes a waiver of most claims the employee may have against the employer. The specific terms of a Severance Agreement are very important and should be carefully reviewed by both employer and employee.
Whether you are an employer or an employee, we can prepare and/or review a Severance Agreement that protects your interests.