When employees and employers part ways, there are sometimes agreements that come along with the separation. The reason for this split might be anything from a round of layoffs to the employees resigning. No matter what it is, it is always better to part ways on good terms. The employment separation agreement can do this.
It is imperative that the agreement protects both parties as it is written. Both sides should have a chance to review the agreement and present it to their legal representation to look over. There are several things that should be included in these agreements.
Information about the separation
Many employment separation agreements will include the reason for the employee leaving the company, including resignation, termination, layoff or another reason. This might be vague, but many companies have more specific information. The employee and company name must be included, and it must have the date of separation, as well as the employment term.
Some employment separation contracts will also include what the employee can expect when potential employers call to get a reference. In some cases, written referrals might also be provided to make it easier for the person to find employment. This is usually reserved for excellent employees who leave on very good terms.
Any extraordinary agreements
Some employment separation agreements contain things like severance packages, but these are optional. The only way that you are guaranteed to get a severance package is if you have an employment contract with a clause providing this.
Information about the last paycheck, taxes, insurance and any benefits might also be included. These should be as specific as possible so that everyone knows the expectations. In some cases, the benefits and severance package will remain in effect for a specific term after the separation.
Other terms that are possible include a non-disparagement agreement that outlines what the former employee can say about the employer, a non-compete agreement that restricts where the person can seek employment and a non-disclosure agreement that protects the company’s trade secrets and other information.
Remember that employment separation contracts are enforceable, which means that either side can take legal action if the terms aren’t followed. It is best to scrutinize these thoroughly before signing them to ensure that you are protected by the terms. Never sign one if you don’t fully agree with the terms.