Free Employment Separation Agreement Templates (Word, PDF)

employee settlement agreement template

An employment separation agreement template is s such a document that ensures the process of exit from the company in a structured and orderly manner. Similarly, you can see it’s a departure of an employee from the company. However, many firms take this process quite seriously and they have managed separate departments for handling these types of matters. Typically, a separation agreement involves a waiver of claims against the business. Moreover, it can be made by the split employee in exchange for a token payment, commonly referred to as severance pay, separation pay, or termination pay.


Purpose of Separation Agreements

A separation agreement is also a written contract. It defines the separation of an employee from employment. However, the main purpose of this contract is to release the claims of an employee from the employer. It can be in exchange for payment of money to the worker from the owner of the organization. Employers use the separation agreement for those employees who are fired or laid off. It uses as a termination agreement; release of claims from job, severance agreements etc. The purpose is to secure both employee and the employer. Similarly, it is an indication that both reached the final decision regarding their working environment. So, they are excluding proceedings against either the employee or employer. Furthermore, this agreement protects classified business information.


Download Free Employee Separation Agreement Templates

Ex-employees can sue their employers even if they never filed a complaint during their employment. However, using well-drafted employment separation agreements templates, supported by consideration, can limit those post-termination lawsuits. Moreover, you can download these templates free from the internet. Further, with the help of a document builder, you can customize it according to the requirement.

What is an employment separation agreement?

Whether an employee is leaving your company willingly or it’s a terminating matter from the employment. If you will document the terms that will benefit you both. First, in a job termination scenario, you will be more willing to document everything. A separation agreement provides a written statement of the relationship between you and your soon-to-be ex-employee. Just like tax forms or other items you refer to an employee of your company, an employee separation document is not a legal requirement document of any organization. In every state, there are rules for terminating an employee. Therefore, it’s important to know that how to handle employee separations. If you have managed experienced employment law counsel that is key. You can hand over such matters to them and they can treat them legally.


AT-Will Employment:

Employment in the United States is “at-will”. This means that an employer can terminate an employee’s services at any time without any reason. Further, an employer does not provide any notice to an employee of termination. Employers do not tell to any employees why they are terminated?


One of the important issues for employee separation agreements is waiver claims. Moreover, when you have a well-drafted waiver, you can prevent your business from a terminated employee for suing related to the employment. Furthermore, a waiver is a contract between employer and former employee and for that consideration is required. Normally, consideration includes the severance package, payment form or some other type of benefit.


The most effective method to Terminate an Employee

Recognize the Terms of Termination

Genuineness is dependably the smartest strategy. Accumulate events or tributes from their co-workers and outline their faults and why they are not generally a fit for the organization or association. To help the individual, the employer must help the terminated individual assist themselves.


Plan When to Terminate

Plan an opportunity to talk with the individual. Except if the employee is working abroad, it’s prescribed for all gatherings to leave embracing a positive outlook by drawing nearer and illuminating them face to face. Moreover, the best is to do this one-on-one. Individuals will generally respond diversely around others and the two parties will have a superior opportunity at a legit discussion on the off chance that there isn’t a group of people.


Choose Employee’s Last Day

Despite the prominent sentiment, it isn’t ideal to allow somebody to go on a Friday, or more terrible, before a vacation end of the week. Except if there is severance, it’s ideal to start the end cycle early or mid-week to allow them a superior opportunity at tracking down new employment.

Demand a Separation Agreement

To repay the two parties, the gatherings ought to approve a detachment understanding that expresses that no party is at fault for any bad behaviour and that the representative’s end was expected exclusively founded on their activities. Also, assuming there is severance because of the representative the payments and amounts ought to be recorded in this arrangement.

Propose to Assist in the Transition

The final hindrance for the terminated individual will be to settle their termination and continue toward the following part of their life. The most ideal way for an employer to help is by giving to compose a recommendation letter. Moreover, it ought to be noticed that assuming the employer is reached that a positive endorsement will be given to any solicitations for data about the former employee. Because every employment situation is remarkable and personal relationships that might foster throughout one’s career, it’s ideal to likewise offer any emotional support if conceivable. Having a “going away party” or one more occasion that aids the change will assist with providing the individual with the inner serenity they need to leave enjoying good terms.


In return for the employee to respect the separation agreement, the employer should make a thought of some consideration. Thought is an amount that can be honestly passed as payment for an individual or entity to fulfil an obligation. For it to be viewed as real, it should appear to be legit with regards to what is being inquired. For instance, a $100 payment to the employee for a rundown of demands that seriously impede the employee’s capacity to find new employment may not appear to be fair in that frame of mind of any court.

Prescribed Severance

It’s encouraged to give any previous employee fourteen days’ severance upon the termination of their work as long as the individual in question consents to a separation arrangement.

Employment Discrimination

In many arrangements, there are two (2) kinds of discrimination regulations that the business will need to be exempt from, Federal and State separation regulations which cover:

  • Incapacity;
  • Race;
  • Statement of faith;
  • Colour;
  • Sex;
  • Sexual Orientation;
  • Religion;
  • Age;
  • National origin; or
  • Parentage.

A Termination Agreement Should Contain What?

An employment termination agreement means that there are terms with the former employee that are linked to your business. This contract also has corporate terms that are relevant to the employment situation. An experienced employment lawyer can help you to navigate employee terminations. Moreover, they can help you for expertise in drafting an employee separation agreement.

Employment Termination Details

When you are drafting an employee separation agreement, you should include the former employee’s name and the date of the employment ended. It also varies on the agreement between your business and the employee, you need to give a reason for your departure from the job. Furthermore, there is also a situation when the employee and business owner agree that the employee should leave the organization. The experienced employment lawyer can help you to provide services related to the employment departure details. Further, he can handle the situation for terminating employee matters.

Severance package:

One of the key reasons for a separation agreement is to get a claim waiver. Similarly, a severance package is another good option when you are going to terminate an employee from the job. Usually, the employees who get fired or laid off are eligible for the severance package. Moreover, there is another option for giving cash in the form of a waiver claim. Senior executives from the company are also entitled to severance under the employment agreement. This is important that employer staff should check all documents and agreements before drafting separation contracts. The business-expert lawyers are the best option who can protect you from employment law liability.

Benefit Plans:

Employers give access to their best employees for post-termination-benefit. Moreover, they are allowed to be part of an employment contract. It’s important that in any issue a separation agreement should use to document what post-employment benefits an employee can receive.

Non-Financial Clauses:

All parts of the employment separation agreement template are not related to money. One of the most important aspects of a separate contract is confidentiality. Similarly, reputational damage to your business from the former employee is more costing money than a separation agreement.

Some clauses should include:

  • Waivers of the employee’s right to sue the company for discrimination;
  • There is a confidentiality clause ensuring that any information about the company who acquires it during the employee’s tenure should keep private.
  • The former employee cannot hire other employees or take away your clients if they are subject to a non-solicitation clause;
  • Inclusion of a non-disparagement clause confirming what each party can say about the other;
  • A non-disclosure clause that ensures the former employee will not disclose its existence; and
  • In the case of a particular employment situation, other non-financial clauses may apply.

Separation agreements protect you in more ways than one. Think about what your biggest risks are before adding clauses. Be specific and thoughtful in your writing.

Termination of Older Employees: Special Requirements

To comply with the federal Age Discrimination Discrimination in Employment Act of 1967 (ADEA), employers must take some additional steps when terminating an employee aged 40 or older. These steps are following:

  • Before signing a separation agreement, an employee should inform in writing that he or she should consult an attorney.
  • At least 21 days must pass before the employee makes a decision.
  • Employees must have 7 days to revoke their signatures after signing a separation agreement.


An employment separation agreement template is a release agreement of an employee. It can be employee termination from the employer or the leaving of job from the employee. It can be in the claim waiver form, severance package. Moreover, a separation document is for the benefit of both employer and employee so that employer can protect himself from suing the business against the former employee. If you have an experienced business lawyer that will help you to protect from lawsuits of the separation agreement. Separation agreement templates are available for your ease. You can modify the text and customize the letter as per requirement.

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Shariq Ali

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