There’s been a lot in the news of late about “outrageous” provisions found in an separation agreement between an employer and an employee, like confidentiality.  Indeed, some proposed legislation would restrict the use of some provisions.  

So I thought it would be helpful to go over what we typically see in a separation agreement.

First a big caveat: My description of a “typical” agreement does not mean that these provisions are in every agreement or even that these provisions ought to be in some agreements. Each separation or settlement has differing facts that may make certain provisions more important than others. And some employers or employees negotiate differently.

In other words, there is not a one-size-fits-all to this and employers should definitely not attempt to do this without legal guidance.

One more caveat, back in 2009, I provided a link to a great checklist that existed at the time about key provisions to have in a separation agreement. Nearly 10 years later, it still holds up pretty well.  You could do a lot worse than rely on that.

So what are typical provisions?

  1.  Last Day of Employment
  2. Benefits Upon Separation of Employment
  3. A Release of all possible claims related to employment (maybe even broader) with lots of legalese
  4. Confidentiality of Agreement
  5. Nondisparagement of one or more of the parties
  6. No Admission of Liability
  7. No Obligation by Employer to Re-Hire
  8. Return of Property
  9. Affirmation of Any Prior Restrictive Covenants (such as Non-Compete periods)
  10. References or Removal of Negative Information from Personnel File
  11. Many more technical provisions regarding what the governing law is, indemnification in case of breach, incorporation provisions making sure this agreement supersedes prior agreements, and, OWBPA-compliant provisions if necessary.

So, before you read headlines or “expert” commentary expressing shock that a separation agreement contains a confidentiality provision, understand that typically these are sought by both an employer and employee.  There may be good reasons that both have for wanting to keep the reasons for the separation and any separation agreement private.