Severance Pay Release Of Claims Template for United States

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Key Requirements PROMPT example:

Severance Pay Release Of Claims

"I need a Severance Pay Release of Claims agreement for a senior executive who is being terminated as part of a company restructuring, with a six-month severance package and continued health benefits through June 2025."

Document background
The Severance Pay Release of Claims agreement is utilized when an employer wishes to provide severance benefits to a departing employee while protecting against potential future legal claims. This document is particularly important in situations involving layoffs, restructuring, or voluntary separation programs. It must be carefully drafted to comply with U.S. federal and state laws, particularly when dealing with age discrimination concerns under ADEA and OWBPA. The agreement typically includes detailed provisions about payment terms, comprehensive release language, and mandatory consideration and revocation periods.
Suggested Sections

1. Parties: Identification of employer and employee

2. Background: Context of employment termination and agreement purpose

3. Definitions: Key terms used throughout the agreement

4. Severance Payment: Amount, timing, and method of severance payment

5. Release of Claims: Comprehensive release of legal claims against employer

6. Consideration Period: Statutory time period for review (21 days for individual, 45 days for group terminations)

7. Revocation Rights: 7-day right to revoke acceptance after signing

8. Governing Law: Specification of applicable state and federal laws

9. Acknowledgments: Employee acknowledgments of understanding and voluntary acceptance

Optional Sections

1. Non-Compete Provisions: Restrictions on future employment - include when protecting business interests is crucial

2. Confidentiality Obligations: Ongoing confidentiality requirements - include when sensitive information was accessed during employment

3. Return of Company Property: Process for returning company assets - include when employee possessed company property

4. Continuation of Benefits: Terms for extending benefits post-employment - include when offering extended benefits package

5. Non-Disparagement: Mutual or one-way agreement not to make negative statements - include when reputation protection is important

Suggested Schedules

1. Schedule A - Severance Calculation: Detailed breakdown of severance payment calculation including base pay, bonuses, and deductions

2. Schedule B - Benefits Summary: Comprehensive summary of continued benefits, including healthcare, insurance, and other perks

3. Appendix A - OWBPA Disclosure: Required disclosure for group terminations including job titles and ages of those selected and not selected

4. Appendix B - State-Specific Provisions: Additional provisions required by specific state laws

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Industries

Age Discrimination in Employment Act (ADEA): Federal law requiring specific provisions for employees 40 and older, including 21-day consideration period (45 days for group terminations) and 7-day revocation period

Older Workers Benefit Protection Act (OWBPA): Federal law establishing additional requirements for valid waivers and specific disclosure requirements for group terminations

Title VII of the Civil Rights Act: Federal law prohibiting employment discrimination based on race, color, religion, sex, and national origin that must be addressed in release language

Americans with Disabilities Act (ADA): Federal law protecting rights of individuals with disabilities that must be considered in release provisions

Fair Labor Standards Act (FLSA): Federal law governing wages and overtime that must be addressed in severance calculations and release language

Family and Medical Leave Act (FMLA): Federal law protecting employee leave rights that should be addressed in release provisions

State Labor Laws: Various state-specific requirements regarding final pay, releases, and severance that must be incorporated based on applicable jurisdiction

Internal Revenue Code: Federal tax regulations affecting the treatment of severance payments, including Medicare and Social Security implications

COBRA: Federal law requiring continuation of health coverage that must be addressed in severance agreements

ERISA: Federal law governing employee benefits that must be considered if severance agreement includes benefit provisions

National Labor Relations Act (NLRA): Federal law protecting workers' rights to organize and engage in collective bargaining that must be considered in release language

WARN Act: Federal law requiring advance notification of qualifying plant closings and mass layoffs, which may affect severance timing and terms

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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