Separation Agreements & Severance Packages

A separation agreement is a mutually binding contract between an employer and employee, which establishes the terms and conditions of a severance package. When a company eliminates a position through no fault of the employee, they often offer a severance package to the departing employee. A severance package provides certain benefits to a former employee, for a limited period of time during their job search. 

The separation agreement enumerates the specific benefits the employee will receive, as well as the conditions of receiving those benefits. In consideration of the severance benefits, the employee will promise not to sue the company for any reason afterwards. This makes the separation agreement mutually beneficial to both parties. The business can control the costs and risks associated with relieving a high-level employee, while the employee can immediately secure benefits he or she can utilizing while searching for a new job.