Practice Areas > Employment Law > Separation Agreements

Termination & Separation Agreements 

In the United States, the standard employment contract is considered to be at-will meaning that the employer and employee are both free to terminate the employment at any time and for any cause, or for no cause at all. However, if a termination of employment by the employer is deemed unjust by the employee, there can be legal recourse to challenge such a termination.

The classic definition of terminating someone's employment is being fired, or in technical terms involuntary termination. In the workplace, an employee may be fired for many reasons including: work performance that fails to meet a given standard, especially over a period of time; chronic absence; constant or gross insubordination, or other inability to properly relate (i.e., get along) with co-workers and/or customers; inappropriate conduct or misconduct; engaging in illegal activities on the job (such as embezzlement or illegal subordinate harassment including denial of pay and benefits); criminal or traffic record; or any other failing as deemed appropriate by a workplace manager or supervisor.

It is generally advised that a supervisor or manager keep extensive documentation of employees, including records of disciplinary action, evaluations, attendance records, and correspondence from supervisors, co-workers and customers. Often, these items can be used in determining whether to terminate an employee considered for such an action.  In some cases, certain disciplinary records, evaluations and relevant information must be expunged from the employee's file after a specified time period.

Often, an involuntary termination is part of a "progressive step" process, meaning the employee will have been warned for his work performance and/or conduct and given an opportunity to improve before more severe measures are taken.  However, immediate termination may be enacted for severe cases, such as fighting, on-the-job sexual harassment or other zero tolerance offenses. Often, workplace managers require giving an employee due process, giving the worker a chance to show why he should be allowed to keep his job; they may also be required to give a terminated employee the option to appeal his firing.

In addition to the risks and resulting consequences involved with involuntary terminations, there is the matter of unemployment benefits. In the United States, these benefits are financed by companies; a firm's unemployment costs increase with each worker laid off or fired. Therefore, more common are de facto firings, which are classified as "voluntary" termination.

How We Serve Our Clients

A separation, settlement or compromise agreement is a legally binding contract between employee and employer entered into on or after the employee's employment with the company terminates.  If negotiated and executed properly, these agreements can resolve a dispute in an employment relationship without the need for costly and protracted litigation.  Settlements are generally less expensive than litigation and give the parties more control of the dispute resolution process, resulting in an amicable settlement.  Moreover, they allow the parties to avoid the distractions and disruptive effects of a lawsuit and can protect the parties reputation in the business community. 

The scope of any settlement depends on various factors, including the validity of each parties claim.  Settlement agreements can include numerous provisons such as: severance payment; release of future claims; continuation of benefits for a fixed period of time; favorable reference letters; and vesting in stock options, as well as, non-solicitation, non-compete, confidentiality agreements.

Our attorneys are experienced in representing both employers and employees in drafting and negoiating separation agreements.  We will work closely with you to ensure that your legal rights are protected and you reach a fair and equitable settlement.


Associated Practice Areas

Employment Law & Benefits

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