A termination of employment agreement should at least deal with the following issues: I. Release of all claims – When an employee leaves, always include a release of all claims in the separation agreement. The purpose of this provision is very basic and critically important: to protect you from additional expenditures of time and money resulting from further claims. At a small company where there is not a lot of money, this may be the difference between success and failure. The release should cover any and all unknown claims, since a general release may not be sufficient. II. Non-disparagement agreement – One solution to prevent an employee from bad mouthing your company may be to have the departing employee sign a separation agreement with a non-disparagment agreement, which should: A. Clearly define “disparagement;” B. Be broad enough to include statements which may not arise to the legal definition of defamation; C. Be a material element of the entire separation agreement; and D. Include a clause noting that employees will face an injunction should they violate the agreement. III. Confidentiality/trade secret and proprietary invention agreement – In a separation agreement, it is imperative to include these provisions that deal with these subjects, they should survive any other challenge to the agreement. The employee should also acknowledge that an injunction is a proper remedy for a breach of the agreement. !V. Additional payment for the separation agreement – For a separation agreement to be enforceable, it needs what is called “additional consideration.” This means that you cannot pay an employee simply what she is owed to the last day of employment. Instead, you have to make an additional payment.
Termination of Employment Contract with Release of all Claims This Termination of Employment Agreement and General Release of All Claims (this Agreement) is made on the (date), between (Name of Employee) of (street address, city, state, zip code), referred to herein as Employee, and (Name of Employer), a corporation organized and existing under the laws of the state of (name of state), with its principal office located at (street address, city, state, zip code), referred to herein as the Company. Whereas, Employee was employed by the Company pursuant to an employment agreement dated (date) (the Employment Agreement). Whereas, Employee and Company have agreed to resolve any and all disputes regarding the Employee's employment, the Employment Agreement, his performance as a (title or duties) and his separation from the Company. Now, therefore, for and in consideration of the matters described above, and of the mutual benefits and obligations set forth in this Agreement, the parties agree as follows: 1. Termination of Employment. Company and Employee agree that the Employee's employment with the Company will end on (date). The parties further agree that the Employment Agreement will terminate on (date), except as otherwise provided below in this Agreement. 2. Severance Payment. In consideration for the Employee's promises contained in this Agreement, the Company agrees as follows: A. Beginning on (date), and continuing through (date), the Company shall pay Employee, pursuant to the terms and conditions described below in this Agreement, an amount equal to the annual rate of compensation provided in Section (number) of the Employment Agreement, on a pro-rated basis, less any withholdings and deductions as are, or may be, required by law. The Company shall pay the compensation in installments in accordance with the Company's normal payroll practices, with the first installment due on the date of the Company's first regularly scheduled payroll after (date). B. Employee acknowledges and agrees that this Agreement states all amounts to which he is entitled by virtue of his Employment Agreement and his employment by the Company, and that the amount listed above in this Section is being paid to resolve all disputes between the parties, and that he is not entitled to any other funds from the Company, except as provided in this Section. 3. Employment Agreement Provisions. The Employee's obligations under Section 5 (Mutual Promises and Covenants) and Section 6 (Confidentiality) of the Employment Agreement shall survive the termination of the Employment Agreement. 4. Employee’s Releases and Promises. As consideration for the Company's promises as contained in this Agreement, the Employee agrees as follows: A. Employee, on behalf of himself and all of his heirs, assigns, legal representatives, successors-in-interest, or any person claiming through him agrees to release and discharge any claim, charge, complaint, demand, dispute, or liability of any kind that relates to or involves his employment by the Company, the Employment Agreement, the termination of the Employment Agreement and/or his separation from the Company, except those claims that may arise from any breach of this Agreement, which he has had or now has against the Company or against any other business that is related to the Company, including, but not limited to all of its parent, subsidiary, and affiliated companies ("Related Entities") or against any current or former employee, officer, director, agent, shareholder, attorney, accountant, partner, insurer, advisor, partnership, assign, successor-in-interest, joint venturer, and/or affiliated person of the Company or of any of the Related Entities ("Related Persons"). The claims being released by the Employee include, but are not limited to, any and all claims for pay, benefits, damages, fees and costs, or any other relief that may be or could have been asserted in any legal or administrative proceeding under federal law, including, but not limited to, the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C.A. §§ 621 et seq., Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C.A. §§ 2000 et seq., 42 U.S.C.A. § 1981, the Americans With Disabilities Act, as amended, 42 U.S.C.A. App. §§ 12101 et seq., the Family and Medical Leave Act, 29 U.S.C.A. §§ 2611 et seq., the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C.A. App. §§ 1.001 et seq.; or under any state or local statute or regulation, Act or law similar to the federal laws; or any claim for tortious conduct, including, but not limited to, defamation or slander, infliction of emotional distress, negligence, interference with contract, or for breach of contract or equitable relief. In short, the Employee knowingly and voluntarily releases any and all claims he has had or may have against the Company, the Related Entities and the Related Persons. B. The Employee further acknowledges that he is aware of and has had the opportunity to consult with an attorney and become aware of his rights under the laws specifically and generally described above in this Section, and that he is permanently waiving those legal rights to the fullest extent that waiver is allowed by law. 5. Mutual Promises and Covenants. The Employee also agrees that he will not engage in any conduct or make any statements which are critical of the Company, the Related Entities, or any of the Related Persons regarding, relating to or in connection with his
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