A Short Guide to Understanding Mutual Separation Agreements

There are a lot of terms and regulations surrounding employment that can be confusing for the average person. One such term is "mutual separation agreement." What is a mutual separation agreement? Simply put, it is an agreement between an employer and an employee that details the terms of the employee's departure from the company.

Mutual separation agreements are also known as compromise agreements, settlement agreements, and severance agreements. They are typically used when an employer and employee have mutually agreed that it is in both of their best interests for the employee to leave the company.

What's Included in a Mutual Separation Agreement?

A typical mutual separation agreement will include several key clauses that protect both the employer and the employee. These clauses will outline the following:

• The amount of severance pay the employee is entitled to receive
• The conditions under which the employee is eligible to receive severance pay (for example, if they sign a non-disclosure agreement)
• The date on which the employee will receive their severance pay
• A release of claims clause, which protects the employer from being sued by the employee for any reason related to their employment
• An acknowledgment by the employee that they have read and understand the agreement
• An agreement by both parties not to disparage each other publicly or otherwise damage each other's reputations

A mutual separation agreement is a legally binding document that outlines the terms of an employee's departure from a company. These agreements typically cover topics such as severance pay, release of claims, and non-disparagement clauses. If you are thinking about leaving your job, or if your employer has suggested a mutual separation, it is important to have an attorney review your agreement before you sign anything.