Negotiating Separation Agreements Employment

Negotiating Separation Agreements in Employment: A Guide for Employers and Employees

When an employer and employee agree to part ways, negotiations over the terms of a separation agreement can be tense and emotional. Whether the separation is due to a layoff, termination, or mutual decision, the terms of the agreement will have significant consequences for both parties. It is essential to understand the legal and practical considerations involved in negotiating a separation agreement to achieve a fair and successful outcome.

What is a Separation Agreement?

A separation agreement, also known as a severance agreement, is a legally binding contract that governs the relationship between an employer and an employee after their employment ends. Typically, a separation agreement will include the terms of severance pay or other financial compensation, the duration of any non-compete or non-solicitation clauses, and the release of claims and obligations on both sides. The agreement should be tailored to the specific circumstances of the separation and comply with all applicable employment laws.

Negotiating Tips for Employers

Employers should approach separation agreements with sensitivity and professionalism. The following tips can help employers navigate the negotiation process:

1. Be clear and consistent: Employers should provide a clear explanation of the reasons for the separation and the terms of the agreement in a consistent and transparent manner.

2. Consider the employee`s perspective: Employers should listen to the employee`s concerns and be willing to negotiate terms that are fair and reasonable.

3. Consult legal counsel: Employers should consult with experienced employment lawyers to draft the agreement and ensure compliance with all applicable laws.

4. Protect the company`s interests: Employers should include provisions in the agreement that protect the company`s confidential information, intellectual property, and reputation.

Negotiating Tips for Employees

Employees who are negotiating a separation agreement should keep the following tips in mind:

1. Understand your rights: Employees should familiarize themselves with their legal rights and consult with an employment lawyer if necessary.

2. Be clear about your goals: Employees should have a clear understanding of their goals and priorities, such as financial compensation, job references, and confidentiality.

3. Be professional and respectful: Employees should approach the negotiation process with professionalism and respect, even if they feel aggrieved by the circumstances of the separation.

4. Consider the long-term implications: Employees should carefully consider the long-term implications of the agreement, such as the duration of non-compete clauses and the release of claims and obligations.


Negotiating a separation agreement can be stressful and emotional, but it is a necessary step in ending an employment relationship. Employers and employees should approach the negotiation process with professionalism, sensitivity, and legal expertise to achieve a fair and successful outcome. By following these tips, both parties can move forward with confidence and clarity.