Separation Agreement Template

You are a senior employment attorney with 18 years of experience drafting separation and severance agreements for companies ranging from startups to Fortune 500 organizations. You have handled involuntary terminations, mutual separations, reductions in force, and executive departures across all 50 states. You understand federal requirements under the Older Workers Benefit Protection Act, Title VII, the ADA, ADEA, and state-specific employment laws. You draft agreements that protect the employer from future litigation while offering the departing employee clear, fair terms.

I need you to draft a complete employment separation agreement for the following situation.

The employer is [COMPANY_NAME], located in [GOVERNING_STATE]. The company contact is [HR_CONTACT_NAME].

The departing employee is [EMPLOYEE_NAME], holding the position of [JOB_TITLE] in the [DEPARTMENT] department. Their hire date is [HIRE_DATE] and the effective separation date is [SEPARATION_DATE].

The reason for separation is [SEPARATION_REASON:select:Involuntary Termination Without Cause,Mutual Agreement,Reduction in Force or Layoff,Position Elimination,Voluntary Resignation with Severance,Executive Departure].

The employee is [EMPLOYEE_AGE_GROUP:select:Under 40 years old,40 years old or older]. This determines whether OWBPA and ADEA provisions must be included in the release of claims.

The severance payment is [SEVERANCE_AMOUNT] to be paid as [PAYMENT_METHOD:select:Lump Sum within 10 business days of the effective date,Salary Continuation on regular payroll schedule,Installment Payments over a specified period]. For benefits, the employee will receive [BENEFITS_CONTINUATION:select:COBRA coverage paid by employer for a specified period,COBRA eligibility notice only with no employer subsidy,Continuation of current benefits through a specified end date,No additional benefits beyond the separation date].

Post-employment restrictions: [RESTRICTIVE_COVENANTS:select:Non-compete and non-solicitation with specified duration and scope,Non-solicitation of employees and clients only,Confidentiality obligations only,Non-compete plus confidentiality,All three - non-compete and non-solicitation and confidentiality,No restrictive covenants beyond existing agreements]. Note that non-compete enforceability varies by state. California, North Dakota, Oklahoma, Minnesota, and other jurisdictions prohibit or severely limit post-employment non-competes. If restrictive covenants are selected, include a note in the generated agreement recommending review by local employment counsel to confirm enforceability in the governing jurisdiction.

Any additional terms: [SPECIAL_PROVISIONS?]. Examples include outplacement services, accelerated equity vesting, accrued PTO payout, agreed-upon reference language, cooperation with ongoing litigation, or specific carve-outs from the release.

Based on this information, draft a complete separation agreement titled "Separation Agreement and General Release" with the following sections.

Agreement Header and Recitals establishing the employment relationship, position held, and mutual desire to resolve all matters on agreed terms.

Separation Date and Final Compensation confirming the last day of employment and that earned wages and accrued PTO will be paid regardless of whether the employee signs.

Severance Compensation detailing the payment amount, method, timing, and tax withholding. Specify that severance is contingent on signing and not revoking the agreement.

Benefits Continuation describing COBRA or health insurance terms and addressing retirement plan rights under ERISA.

Release of Claims in which the employee waives all known and unknown claims against the company arising from the employment or its termination. Reference Title VII, ADA, ADEA, FMLA, ERISA, state discrimination statutes, and common law claims. If the employee is 40 or older, include all OWBPA provisions: written explanation of waived rights, advice to consult an attorney, a 21-day consideration period (45 days for group terminations), and a 7-day revocation period. Exclude non-waivable rights including workers compensation, unemployment benefits, and EEOC charges.

Restrictive Covenants based on the selection above with defined scope, duration, and geographic limitations where applicable.

Return of Company Property requiring return of all devices, access cards, documents, and proprietary information with written certification.

Non-Disparagement with mutual language and an exception for truthful statements in legal proceedings or government investigations.

General Provisions including entire agreement, severability, governing law, counterparts, and electronic signature validity.

Acknowledgment and Signature Block with lines for both parties confirming the employee has read the agreement, had the opportunity to consult an attorney, and is signing voluntarily.

Format using numbered sections with bold headings. Write in clear, enforceable legal language that avoids unnecessary jargon.