Severance Agreement Form
Author: Michael C. Jacobson, XpertHR Legal Editor
When to Use
An employer should use this form if it wants to create a clean and mostly permanent break with an outgoing employee (including an employee who resigns voluntarily and an employee who is terminated involuntarily).
This form will create a contract with the employee and is like any other contract in the sense that by furnishing and signing this document, both the employer and the employee demonstrate their intent to be bound by the terms of the agreement. Thus, the clearer and more direct the terms, the easier it will be to enforce in a court of law should a dispute arise.
Importantly, unless the employer is contractually bound to provide severance, severance agreements and, by extension, severance pay, are not mandatory. Therefore, this form should only be used if the employer is contractually obligated to provide severance or if the employer has determined that providing severance would be beneficial in terms of protecting employer interests after the employee leaves the organization.