Separation Agreements - Tressler & Associates, PLLC
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Separation Agreements

Separation Agreements

As a business owner, you know that employees are bound to come and go over the years. Employees may receive new opportunities, their position may no longer be needed, and sometimes, professional relationships just don’t work out for various reasons. Whichever reason an employee may leave your company, you need to be prepared for when this happens. This is especially true when an employee is terminated. When this occurs, you need to ensure you’re protecting your business’s best interests. Separation agreements helps you do this.

At Tressler & Associates, our entrepreneurial law attorneys can help you implement various contracts for your business, including separation agreements. With our assistance, you know that you’re doing all that you can to handle a termination properly.

What is a Separation Agreement?

Terminating an employee is an often unpleasant, but necessary task. Naturally, terminating an employee will likely cause hurt feelings and sour your relationship. When an employee is terminated, separation agreements are often used to prevent the terminated employee from taking legal action against the company. Separation agreements are legally binding documents between an employer and the employee being terminated that outline the terms of the termination.

As employment separation agreements are legally binding, you need someone who understands the intricacies of the law to draft them. An entrepreneurial law attorney can prevent complications from arising after terminations through separation agreements. A separation agreement is meant to help your business, so you want to ensure this is done correctly.

What Should Be Included in a Separation Agreement?

Here are important elements that a separation agreement should include.

Termination of Employment Details

A separation agreement should include information related to the specific employee and their termination. This includes basic information, like the employee’s position title and the final date of their employment. While at-will employers are not required to give a reason for terminating an employee, this is something you might want to consider adding.

Waiver of Claims

A waiver of claims is one of the most important sections to add to a separation agreement. This prevents a terminated employee from taking legal action against your business, which is often a concern following terminations. By signing a separation agreement that includes a waiver of claims, the employee gives up their right to sue.

Confidentiality Agreement

During the employee’s time with your company, they’ll likely acquire a great deal of information that you want to be kept private. A confidentiality agreement prevents them from sharing this information.

Non-Disclosure Agreement

A non-disclosure agreement prevents the employee from discussing the separation agreement with others.

Non-Disparagement Agreement

A non-disparagement agreement prevents the employee from publicly disparaging the company. This may also apply to what the company is allowed to say about the employee.

Non-Compete Agreement

A non-compete agreement prevents an employee from working with your direct competitors.

While separation agreements largely help the business, they also typically provide benefits for the employee. Terminations have a significant impact on employees, so you may want to provide benefits for a certain period of time to help them get by. You also want to give employees a reason to sign their separation agreements, so it’s often helpful to include benefits for them.

Here is what you may want to consider adding to your separation agreement.

Severance Pay

Severance pay is financial compensation that may be given to terminated employees. This is typically determined by how long an employee has been with the company. For example, common severance pay is one week of pay for every year the employee was with the company. You may also include payment for the employee’s unused paid time off.


In addition to severance pay, you may also decide to continue to provide benefits for a certain length of time after the employee is terminated. This can include health insurance, life insurance, retirement benefits, and stock the employee has in the company.

Have an Entrepreneurial Law Attorney Draft Your Separation Agreements

It can be difficult to maintain a good relationship with a terminated employee, and the last thing you want is a wrongful termination lawsuit to harm your business. This is why it’s so important to have the right legal help when drafting a separation agreement. The entrepreneurial law attorneys at Tressler & Associates can ensure that your separation agreement is enforceable and prevents any issues from occurring due to a termination.

Don’t assume that you don’t need a separation agreement. Contact our Tennessee entrepreneurial law attorneys today.


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