A discharge agreement is a legal document that is used to formalize the relationship between an employer and an employee at the time of termination. It is a mutually agreed-upon document that outlines the terms and conditions of the employee`s termination, such as severance pay and benefits, and also sets out the rights and obligations of both parties.
If you are an employer or an employee who is facing the prospect of a termination, it is important to understand the importance of a discharge agreement, what it should contain, and how to draft one that meets the needs of both parties.
Here is a discharge agreement sample that can be used as a template:
Discharge Agreement
This Agreement (“Agreement”) is entered into on [Date] by and between [Employer Name], a corporation organized under the laws of the State of [State], with its principal place of business at [Address] (“Employer”), and [Employee Name], an individual residing at [Address] (“Employee”).
WHEREAS, Employee`s employment with Employer will be terminated on [Date] (“Termination Date”) as a result of [Reason for Termination]; and
WHEREAS, Employer and Employee desire to set forth their respective rights and obligations following Employee`s termination of employment.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, Employer and Employee agree as follows:
1. Severance Pay: Within [Number of Days] days after this Agreement is signed, Employee shall receive a lump sum payment in the amount of [Amount] as severance pay, less applicable deductions.
2. Benefits Continuation: Employer agrees to continue Employee`s health, dental, and vision insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) for [Number of Months] months following the Termination Date. Employee will be responsible for paying the full cost of the premiums during this period.
3. Accrued Vacation: Employee shall receive payment for any accrued and unused vacation time as of the Termination Date.
4. Release of Claims: In exchange for the severance pay and other consideration provided under this Agreement, Employee agrees to release and forever discharge Employer and any of its affiliates, officers, directors, employees, and agents from any and all claims, demands, causes of action, and liabilities of any kind, including but not limited to claims arising under any federal or state law, including but not limited to Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and any similar state laws. This release includes any and all claims that Employee may have arising out of or relating to Employee`s employment with Employer or the termination thereof.
5. Non-Disparagement: Employee agrees not to make disparaging remarks about Employer or any of its affiliates, officers, directors, employees, or agents, orally or in writing, to any person, including but not limited to customers, clients, vendors, suppliers, or any other third party.
6. Confidentiality: Employee agrees to keep confidential all confidential and proprietary information of Employer, including but not limited to trade secrets, customer lists, and other confidential business information. Employee further agrees not to take any confidential or proprietary information with him/her upon termination of employment.
7. Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the State of [State] without giving effect to any choice or conflict of law provision or rule.
8. Entire Agreement: This Agreement contains the entire agreement between Employer and Employee with respect to the subject matter hereof and supersedes all prior negotiations, understandings, and agreements between the parties, whether written or oral.
9. Counterparts: This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
[Employer Name]
By:______________________________
[Name]
[Title]
[Employee Name]
______________________________
[Name]