Separation Agreements: Pros and Cons


Summary

Although separation agreements cover various aspects of an employee's termination, their primary objective is to restrict litigation and other risks associated with the employment relationship and termination. In exchange for the employee's release and other promises, the employer must provide consideration that exceeds that to which the employee would otherwise be entitled by law or company policy. Often employers will provide separation/severance pay based on the employee's tenure with the company, and may include other things of value such as COBRA subsidies and outplacement services.