Through this general release, _______________ (hereafter, EMPLOYEE) hereby releases and forever discharges ___________________ (hereafter, EMPLOYER), its management and supervisory team, and other employees of all charges, claims, and causes of action of every kind which EMPLOYEE has, or has ever had, or may in the future have relating in any manner to EMPLOYEE’S employment with the EMPLOYER up to and including the date this agreement has been signed by all parties.

EMPLOYEE agrees not to start, join or cause to be started a lawsuit or any action arising from any alleged unlawful conduct relating to his employment with the EMPLOYER up to and including the date this agreement is signed by all parties, in any forum.

EMPLOYEE understands and agrees that the waivers in this agreement include any and all discrimination action(s), including actions for ___________ [depending on your state, e.g., age discrimination under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, The California Fair Employment and Housing Act, and under any other federal or state laws, the law of contract and tort, or common law].

The EMPLOYER agrees to honor EMPLOYEE’s request to ___________ [resign / retire] effective ___________. [The date will probably be that in which the employer presents this form to the employee. My suggestion is that the employer not permit an employee to work once it is clear that termination is required. Many accidents or problems tend to arise after employers decide to terminate an employee but before they do so.]

[If applicable] It is understood and agreed that this general release does not alter the ____________ [e.g., vacation, retirement, health benefit coverage, or other benefits that may apply] to which EMPLOYEE is otherwise entitled following this separation. [Also, include a statement explaining employee will be paid for incentive pay he would have earned had the separation not taken place.]

SEVERANCE PAY. The EMPLOYER agrees to pay to EMPLOYEE [equivalent to number of weeks or months depending on reason for termination and number of years employee worked for EMPLOYER] $______ (__________________ Dollars), subject to appropriate and required tax withholding. In no way does this mean that the EMPLOYEE should consider himself / herself employed at ___________________ during this period.

EMPLOYEE understands and agrees that the payments made by the EMPLOYER described under SEVERANCE PAY represents compensation and that, therefore, the EMPLOYER will withhold from the gross amount of this payment all taxes and other appropriate deductions that it would normally withhold from the earnings of EMPLOYEE, and that the EMPLOYER will report the gross amounts of those payments to governmental agencies as earnings of the individual to whom net payment is made as done in the past.

Although EMPLOYEE is not otherwise entitled to it, the EMPLOYER agrees to pay, and EMPLOYEE agrees to accept the sum of $_________ (______________) as full and complete compensation and satisfaction of any present and prospective claims. Because under the terms of paragraphs 2 and 3 EMPLOYEE will be fully compensated for any arguable back pay and benefits owed, and because EMPLOYEE is not and would not be entitled to any future wages or benefits pursuant to any claims, it is understood and agreed that EMPLOYEE has no present claim for wages. Therefore, the parties agree that the entire amount described in this paragraph is to settle claims for mental and emotional distress.

TWO WEEKS NOTICE. The EMPLOYER expects employees to give a two weeks notice when resigning and desires to return the same courtesy to the EMPLOYEE. In addition to any payment mentioned in the paragraph "Severance Pay" the EMPLOYER will pay EMPLOYEE the equivalent of 2 weeks pay or $______ (__________________ Dollars) in lieu of of offering the employee a two weeks notice, and this pay is subject to appropriate and required tax withholding. The employee may use this time to search for another job or pursue other interests. In no way does this mean that the EMPLOYEE should consider himself / herself employed at ___________________ during this period.

UNEMPLOYMENT INSURANCE. EMPLOYER will not contest EMPLOYEE’s application for unemployment insurance benefits as a result of this agreement. [I believe this is a critical clause for many employees feel the only reason an employer wants the employee to resign rather than be fired, is so the employer can deny the unemployment benefits that would otherwise accrue to an employee. This should be stated right on the agreement, rather than verbally.] The EMPLOYER does not admit or deny, by so doing, that the EMPLOYEE had a right to receive unemployment insurance benefits.

HOUSING TERMINATION AGREEMENT. [It is a good practice to have a housing agreement before any such situation may arise. The following wording is important, in terms of additional pay to be given to employee for quickly vacating company provided housing. It is important that it does not come across as punishing the employee, and therefore it is critical that the larger figure, to be given if employee vacates in one week instead of two, be mentioned second because it is more difficult to achieve. It sounds very negative indeed to say to the employee something like, "If you leave in one week, we will pay you $500, in two weeks $1000, and after that you get nothing."] EMPLOYER agrees to pay EMPLOYEE an additional $500 [this amount can be changed up or down] if EMPLOYEE vacates the company provided housing within two weeks, or by ______________ at ____ PM, and leaves the house in a clean condition. If the employee vacates the company provided housing within one week, or by or by ________________ at ____ PM, and leaves the house in a clean condition, the EMPLOYER agrees to pay EMPLOYEE $1000 [this amount should be about double of that mentioned under the two week plan.

It is understood and agreed that this is a settlement agreement of disputed claims to avoid any possible lawsuit. By entering into this Settlement Agreement and General Release, the EMPLOYER does not admit liability or responsibility at any time for any purpose.

EMPLOYEE promises and agrees not to publish or distribute the terms of this Settlement Agreement and General Release by any written or verbal means. This paragraph is not intended to prohibit the use of this Agreement in any proceeding if either of the parties alleges a breach of this Settlement Agreement and General Release.

If any party starts an action to enforce this Agreement, the prevailing party shall recover as costs his/her attorney’s fees, costs and expenses actually incurred in such action.

If EMPLOYEE breaks the promises contained in this agreement and files a claim or lawsuit based on legal claims that have been released, EMPLOYEE will pay for all costs incurred by the EMPLOYER or its agents or employees, including reasonable attorneys’ fees, in defending against the EMPLOYEE’S claim.

The parties to this Settlement Agreement and General Release understand and agree that this agreement shall not be a precedent or model for the resolution or settlement of any future claim resulting from similar or different circumstances.

EMPLOYEE and the EMPLOYER agree that this Settlement Agreement and General Release contains a full settlement and resolution of all disputes and issues between the parties relating in any manner to his employment with the EMPLOYER up to and including the date this agreement is signed by all parties. It is also understood and agreed that this Settlement Agreement and General Release is a full and final release applying to all unknown and unanticipated damages or losses to EMPLOYEE resulting from or in any way related to his employment with the EMPLOYER up to and including the date this agreement is signed by all parties. EMPLOYEE hereby waives the provisions of section 1542 of the California Civil Code, which states:

"A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." (Civ. Code, S 1542.)

EMPLOYEE represents that he has been represented in negotiations for and the preparation of this Settlement Agreement and General Release by counsel of his own choosing, and that he understands all of this Settlement Agreement and General Release and is fully aware of its content and of its legal effects.

EMPLOYEE represents that he has been strongly encouraged to consult with an attorney before signing this agreement. EMPLOYEE understands that whether or not to do so is EMPLOYEE’s decision. [There are articles in the Web that look at termination agreements from the EMPLOYEE’s perspective, and you may want to print one of those to have the employee look at. It is to everyone’s benefit that the EMPLOYEE does not feel coerced in any way to sign this document. One such sample article is Employment Separation Agreements by Steven Niznik. You may find a better one.]

[If 40 or over] EMPLOYEE understands that EMPLOYEE has been given a period of 21 days to review and consider this Agreement before signing it. EMPLOYEE further understands that EMPLOYEE may use as much of this 21-day period as EMPLOYEE wishes prior to signing.

EMPLOYEE may revoke this Agreement within seven days of EMPLOYEE’s signing it. Revocation can be made by delivering a written notice of revocation to [insert name and address of responsible Company official]. For this revocation to be effective, written notice must be received by [official] no later than the close of business on the seventh day after EMPLOYEE signs this Agreement, or ________________, _____ PM. If EMPLOYEE revokes this Agreement, it shall not be effective or enforceable and EMPLOYEE will not receive the benefits described in this document.

This agreement states the entire understanding and agreement between the parties with respect to its subject matter. The EMPLOYER has made no promises to EMPLOYEE other than those contained in this Agreement. This Agreement may be modified, or any provision waived, only by a signed written agreement of the affected parties.

Dated: ______________, 20__ By ______________________________

Dated: ______________, 20__ By ______________________________

Dated: ______________, 20__ By ______________________________

For a comprehensive article on what to do before you get to this point of having to terminate an employee, see Ch. 14, Employee Discipline and Ch. 15, Employee Termination.

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