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Separation agreements impose reciprocal rights and duties

On Behalf of | Mar 2, 2021 | Employment Law

Any discussion of separation agreements in an employment context might logically begin with a spotlighting of terms for clarity’s sake.

That is for good reason, as stressed in one legal overview of such contracts. That primer duly notes that separation agreements can assume “any of several different titles.” Those range broadly from severance agreements to exit contracts.

However they are denoted, their thrust is the same. The bottom line with any separation agreement is its mutual application of respective rights and obligations imposed on an employer and a departing worker. Both parties are empowered under the terms of such a contract, and both are encumbered.

Employer protections conferred in a separation agreement

The safeguards that an employer secures by crafting a well-written and enforceable separation agreement with an employee are multiple and straightforward.

Contract execution helps an employer “make the consequences to your business predictable while shielding yourself from potential litigation from a former employee.” Companies frequently insert contractual limitations relevant to noncompetition, continued confidentiality and additional matters into separation pacts.

Corresponding worker protections in a severance contract

Of course, a departing worker will be reluctant to sign away rights absent some corresponding benefit. It is fundamental to a separation agreement that an exiting employee receive some tangible benefit/s in exchange for forgoing future legal action against former bosses.

That so-called “consideration” can vary from case to case. Many workers receive a financial settlement spotlighting a package of departing benefits.

Both parties negotiating a severance agreement might logically have a number of material questions and concerns. A proven business law legal team can provide answers and diligent representation focused on securing optimal contractual results.