Benjamin E. Widener, a shareholder in Lawrenceville-based law firm Stark-Stark, agrees. If a separation agreement is not required by a formal employment contract or severance package, the company should consider offering separation pay in return for the release of all claims by the employee, even if such claims do not yet exist. “It provides the employer with protection and isolation from frivolous (or non-frivolous) complaints from angry former employees,” he said. “There is no real risk” of not having a separation agreement, said Lisa Hird Chung, an employment law associate at Duane Morris` San Diego office. Non-competitions are another area to be carefuld. Because some states have limited their scope through laws or court decisions, “non-compete agreements in severance agreements can raise questions,” Rees said. For example, in California, non-competition prohibitions are generally unenforceable. “Employee Separation Agreements” can have many different names.
They are also called termination agreements; The release of rights at work; Separation of Jobs Agreements; Severance pay agreements. To avoid the threat of litigation, many companies go beyond requesting documentation of an employee`s poor performance or inappropriate behaviour before cutting the cord: they will push the employee to sign a separation agreement that documents his obligations to the company after departure for an agreed severance pay. Separation agreements generally provide for payments that go beyond what the employer already owes the outgoing worker. This is called a “severance pay” and can be spent in a lump sum or over weeks or months. In addition to severance pay, separation agreements may also provide for a large number of other cash and in-kind benefits, including: as noted above, dismissal on the basis of discrimination of any kind constitutes a ground for action in unlawful cessation. These include workers over the age of 40 protected by the Protection of Older Workers Act (OWBPA), which is part of the Age Discrimination Act (ADEA). The OWBPA protects workers over the age of 40 from age discrimination and sets strict conditions that employers must meet in the event of dismissal of older workers.