Business Separation Agreements
A business separation agreement is also known as a severance agreement. It is a contract between the employer and employee that determines the right and responsibilities of each party if the employee’s job is terminated. They type of agreement may be offered as part of the job contract, but is generally offered as part of the job termination.
Common Element in a Separation Agreement
Each separation agreement will be different depending on the company, employee, and factors such as how long the employee has worked for the company. While each agreement will vary to a degree, there are several common elements that include:
- The amount of severance pay to be paid out
- A non-compete agreement that prohibits the employee from working for a competitor for a specific period of time
- The extension of benefits, such as healthcare or insurance, and when those benefits will be termination
- A clause stating that the employee cannot file a wrongful termination lawsuit
Review the Contact
Each separation agreement should be reviewed, in depth. First, take the time to read it so that you understand what is included. After, be sure to seek the advice from an employment lawyer who can make sure that you are being treated fairly.
Purpose of a Separation Agreement
The purpose of a separation agreement is to provide the employee with living expenses while he or she searches for a new job. This is a protection to allow the employee the time to find a new job while still being able to provide for his or her family. While this agreement does protect the employee, it is also in place to protect the employer from potential liability and litigation. It provides a clear understanding of the employee and employer relationship upon the employee’s termination.
The Lebanon business lawyers can help you review your separation agreement today. Call our office at 717-274-3644 for a free initial consultation.