Prepare an Enforceable Severance or Termination Agreement

Key Points

  • When an employee leaves an organization for any reason, it is in the employer's best interest to protect itself by using a severance or termination agreement that involves an exchange of something of value with the employee.
  • Some of the factors courts consider when determining the enforceability of a severance or termination agreement include whether the agreement provides the employee with a legally sound and fair deal that is not unreasonably restrictive and hard to understand, and whether the employee had an opportunity to consult with legal counsel before signing it.
  • Consulting the guidance provided by the National Labor Relations Board (NLRB) and the Equal Employment Opportunity Commission (EEOC) will help HR professionals create appropriate severance and termination agreements and avoid enforcement action by one or both of these agencies. For instance, the NLRB may bring action against an employer for imposing severe or unreasonable restrictions on an employee's ability to discuss the severance agreement with other employees, while the EEOC may sue an employer if it requires an employee to give up his or her right to file administrative claims with the EEOC.

XpertHR Resources