Template · Separation and offboarding
Separation agreement template
In short
A separation agreement template is a contract in which an employer gives a departing employee severance or other benefits they are not otherwise owed, in exchange for a release of legal claims. This template includes severance and benefits terms, a general release, age discrimination review and revocation periods, protected rights carve-outs, confidentiality, property return and signature blocks.
Separation Agreement and General Release template
Separation Agreement and General Release
This template is a starting point for US employers and must be reviewed by employment counsel before use, especially for employees 40 and over, group programs, California and other states with specific release rules, and employees outside the US. Replace every [Placeholder] and delete bracketed options that do not apply.
1. Parties and separation date
This Separation Agreement and General Release (the "Agreement") is entered into between [Company Legal Name] (the "Company") and [Employee Full Name] ("you"). Your employment with the Company ends on [Separation Date] (the "Separation Date"), [due to the elimination of your position / by mutual agreement / as communicated to you on [Date]].
2. Final pay and benefits you receive regardless of signing
Whether or not you sign this Agreement, the Company will pay you all wages earned through the Separation Date [and [number] hours of accrued, unused paid time off], less required withholdings, on [Date]. Your group health coverage ends on [Benefits End Date], and you will receive a separate notice of your right to continue coverage under COBRA. Your vested benefits under the Company's [401(k) / retirement] plan are governed by the terms of that plan.
3. Severance benefits
If you sign this Agreement within the review period below, do not revoke it, and comply with its terms, the Company will provide the following, which you are not otherwise entitled to receive:
(a) Severance pay of [Amount], equal to [number] weeks of your base pay, paid [in a lump sum / in installments on the Company's regular paydays] beginning on the first regular payday after the Effective Date;
(b) [If you timely elect COBRA, payment of [the employer portion of / the full] COBRA premiums for you and your enrolled dependents for [number] months or until you become eligible for another group health plan, whichever comes first;]
(c) [Outplacement services through [Provider Type] for [number] months;]
(d) [Other: pro-rated bonus, extended exercise period for vested equity, transfer of phone number, etc.]
All payments are subject to applicable tax withholdings and will be reported on IRS Form W-2.
4. General release of claims
In exchange for the severance benefits, you release the Company and its parents, subsidiaries, affiliates, and their current and former officers, directors, employees, agents, benefit plans and successors (the "Released Parties") from all claims, known or unknown, that you have or may have against them up to the date you sign this Agreement. This includes claims relating to your employment or its end under any federal, state or local law, including Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), the Older Workers Benefit Protection Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the Employee Retirement Income Security Act (except claims for vested benefits), the Genetic Information Nondiscrimination Act, Section 1981 of the Civil Rights Act of 1866, [State Law Names], and claims for breach of contract, wrongful discharge, or tort, to the fullest extent permitted by law.
5. Claims not released
This Agreement does not release: (a) claims that cannot be waived by law; (b) your right to unemployment insurance or workers' compensation benefits; (c) your rights to vested benefits under any retirement plan; (d) claims arising after you sign this Agreement; (e) your right to enforce this Agreement; or (f) any right to indemnification you have under the Company's bylaws, insurance or applicable law.
6. Protected rights
Nothing in this Agreement prevents you from filing a charge or complaint with, communicating with, providing information to, or participating in an investigation by the Equal Employment Opportunity Commission, National Labor Relations Board, Securities and Exchange Commission, Occupational Safety and Health Administration, Department of Labor, or any other federal, state or local agency, or from receiving an award from a government agency for information provided. You do, however, waive any right to recover money from the Released Parties in any charge or lawsuit brought by you or on your behalf, except where such a waiver is prohibited. Nothing in this Agreement limits your right to discuss the terms and conditions of your employment with others, to engage in activity protected by Section 7 of the National Labor Relations Act, or to testify truthfully in any legal proceeding. Nothing in this Agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.
7. Review period, revocation and effective date
[For employees age 40 or over:] You acknowledge that: (a) you are waiving rights and claims under the Age Discrimination in Employment Act; (b) you are not waiving claims that arise after you sign; (c) you are receiving consideration beyond anything you are already entitled to; (d) the Company advises you in writing to consult an attorney before signing; (e) you have [21 days (individual separation) / 45 days (group program)] to consider this Agreement, and changes to it, material or not, do not restart that period; and (f) you may revoke this Agreement within 7 days after signing by delivering written notice to [Name, Title, Email]. This Agreement becomes effective on the eighth day after you sign it without revoking (the "Effective Date"). [For group programs: The information required by the Older Workers Benefit Protection Act about the decisional unit, eligibility factors, time limits, and the job titles and ages of those selected and not selected is attached as Exhibit A.]
[For employees under 40:] You have [number] days to consider this Agreement. It becomes effective on the date you sign it.
8. Return of property
You confirm that by [Date] you returned all Company property, including equipment, badges, keys, documents and files, and that you have not kept copies of Company confidential information in any form.
9. Continuing obligations and confidentiality
Your obligations under the [Confidentiality and Invention Assignment Agreement / Non-Solicitation Agreement] dated [Date] remain in effect [as limited by applicable law]. [You agree to keep the amount of your severance confidential, except to your spouse or partner, attorney, tax and financial advisers, and government agencies, and as allowed under Section 6 (Protected rights).]
10. Non-disparagement (optional, mutual)
[Subject to Section 6 (Protected rights), you agree not to make statements that are knowingly false and damaging about the Company's products or services. The Company will instruct [named executives] not to make false and damaging statements about you, and will respond to reference requests by confirming only your job title and dates of employment.]
11. Cooperation
[You agree to reasonably cooperate with the Company on matters you worked on, including any legal proceeding, at mutually convenient times. The Company will reimburse reasonable out-of-pocket expenses.]
12. General terms
No admission: this Agreement is not an admission of wrongdoing by either party. Tax: the Company makes no representation about the tax treatment of payments, and payments are intended to be exempt from or comply with Section 409A of the Internal Revenue Code. Entire agreement: this Agreement, together with the agreements named in Section 9, is the entire agreement about its subject and replaces prior discussions. Severability: if any provision is found unenforceable, the rest remains in effect. Governing law: [State]. Counterparts and electronic signatures are valid.
Signatures
By signing below, you confirm that you have read this Agreement, understand it, had the opportunity to consult an attorney, and sign it voluntarily.
- Employee name
- Employee signature
- Date signed by employee
- For the Company: name and title
- Company signature
- Date signed by Company
HR tracking (not part of agreement)
- Date agreement delivered
- Review period end date
- Date signed agreement received
- Revocation period end date
- Severance payroll date
How to use this template
- Confirm the employee will receive final pay, PTO payout and COBRA notice whether or not they sign, and keep those out of the severance consideration.
- Set the severance amount using your written formula so similar employees get similar terms.
- Choose the review period: 21 days for an individual employee 40 or over, 45 days plus the decisional unit disclosure for a group program.
- Add the state law names to the release and any state-required language, then have employment counsel review the final draft.
- Deliver the agreement with the termination or layoff letter and record the delivery date, review deadline and revocation deadline.
- Collect the signature electronically, wait until the revocation period has passed, then release the severance payment through payroll.
When to use a separation agreement
A severance agreement makes sense when you want certainty that a departing employee will not sue, and you are willing to pay for it. Common cases: layoffs and reductions in force, senior employees, terminations with some legal risk (a recent complaint, a protected leave, an inconsistent record), and mutual exits negotiated to avoid a performance process. For a routine dismissal of a short-tenure hourly employee with clear documentation, many employers do not offer one at all.
The agreement travels with the separation notice. Deliver it with the termination letter or, in a reduction in force, the layoff letter. The letter confirms what happens regardless; the agreement covers only what is offered in exchange for the release.
What makes a release enforceable
Three things matter most. First, consideration: the employee must receive something they are not already owed. Final wages, earned PTO that state law or policy requires you to pay, and COBRA rights do not count. Conditioning final pay on a signature is a common, costly mistake.
Second, the release must be knowing and voluntary. Plain language, enough time to review and a written suggestion to see a lawyer all help. For employees 40 and over, the Older Workers Benefit Protection Act sets specific requirements: the agreement must refer to the ADEA by name, give 21 days to consider (45 in a group program), allow 7 days to revoke, and in a group program list the job titles and ages of those selected and not selected. Miss any one of these and the age discrimination waiver fails.
Third, it cannot release claims the law makes non-waivable, such as the right to file an EEOC charge or to receive minimum wage and overtime owed under the FLSA without Department of Labor or court approval.
Worked example: setting the severance amount
A regional bank closing an operations center uses one formula for everyone: two weeks of base pay per full year of service, minimum four weeks, maximum 26 weeks, plus three months of COBRA premiums at the company's normal contribution rate.
A processor with seven years of service earning $1,200 a week receives 14 weeks, or $16,800, plus three months of the employer's share of health premiums. A supervisor with 15 years earning $1,700 a week hits 26 weeks under the cap, not 30, for $44,200. Writing the formula down, and applying it the same way to every employee in the program, is the best protection against claims that severance was handed out unequally. See severance pay for typical formulas and how they vary by level.
Confidentiality and non-disparagement limits
Broad gag clauses are riskier than they used to be. In McLaren Macomb (2023), the NLRB held that offering non-supervisory employees severance agreements with broad confidentiality and non-disparagement terms can violate the National Labor Relations Act. The Board applied McLaren Macomb again in 2026, though its current majority has said it is open to reconsidering the decision, so check its status with counsel. Either way, narrow clauses with a clear protected rights section remain the safer drafting choice. California requires separation agreements to state that the employee can discuss information about unlawful acts in the workplace, and to give at least five business days to consider the agreement; several other states limit nondisclosure terms for harassment and discrimination claims.
The protected rights clause in this template uses that language. Do not remove it to make the agreement feel tighter. A clause that a court or agency strikes out does not protect you, and it can put the rest of the agreement at risk. Requirements vary by state and change often, so treat this as informational, not legal advice.
Executing agreements at volume
In a layoff of 80 people, the hard part is tracking: who received which version, when the 45-day review ends for each person, who signed, and when each 7-day revocation window closes. Payroll must not release severance until the Effective Date. Build one tracking sheet with those dates and send agreements for e-signature, which time-stamps delivery and signing and removes questions about when the review period started.
Use one template per program and per state group rather than editing documents one by one, and keep the decisional unit disclosure attached to every copy. Before payroll runs, run the HR tracking block against the termination checklist so final pay, property and access items are closed too.
Frequently asked questions
What is the difference between a separation agreement and a severance agreement?
In practice they are the same document. Both offer severance or other benefits in exchange for a release of claims. "Separation agreement" is the broader name; "severance agreement" emphasizes the payment.
Is an employer required to offer a severance agreement?
No US federal law requires severance. It may be required by an employment contract, a company policy or plan, a union agreement, or certain state laws, such as New Jersey's rules for covered mass layoffs.
How long does an employee have to sign a release agreement?
Employees 40 and over must get at least 21 days, or 45 days in a group program, plus 7 days to revoke. For younger employees no federal minimum applies, though California requires at least five business days and many employers give one to two weeks.
Can an employee negotiate a severance letter?
Yes. Employees often ask for more weeks of pay, longer COBRA support or a neutral reference. In a group program, keep changes rare and consistent, because special deals undermine the formula.
When should severance be paid?
After the agreement becomes effective, which for employees 40 and over is the day after the 7-day revocation period ends without revocation. Paying earlier means paying for a release the employee can still cancel.
Can a separation agreement waive unemployment benefits?
No. Unemployment insurance rights generally cannot be waived by private agreement, although severance can affect the timing of benefits in some states.