When running a business, you may learn that not every employment relationship is meant to last. Employees will come and go for various reasons. When they do, it may be in your best interests to use an employee separation agreement. If you have never heard of or used this document before, you may be wondering: What is an employee separation agreement?
What is an Employee Separation Agreement?
An employee separation agreement is essentially a contract between an employer and employee that the employee will sign when leaving employment. The terms may vary, but the main reason for the agreement is to prevent the employee from suing the employer after they are no longer employed. These contracts can also be used to end pending disputes.
When Would I Use an Employee Separation Agreement?
Employee separation agreements can be used when an employee leaves voluntarily or involuntarily. These devices are typically utilized when an employee is provided with some type of severance. When the employee is paid a severance, they typically do so as part of a termination or lay-off. When they accept the payment, it’s standard for them to sign some type of agreement in exchange.
What Should be Included in My Employee Separation Agreement?
Your employee separation agreement should be drafted with your business needs in mind. Depending on your area, you may need to include product or industry-specific terms.
Waiver of Claims
One of the most important provisions of your employee separation agreement will be a waiver of claims. This section of the agreement will establish that the employee is waiving their right to sue your business for certain types of employment-related claims.
Confidentiality
You will probably also want to include confidentiality language that prohibits the employee from disclosing certain information learned during their employment.
Non-Disclosure
This document can also include a non-disclosure provision that prevents the employee from discussing the agreement.
Non-Solicitation
It may also be to your benefit to include a non-solicitation section that keeps the employee from trying to hire from within your company or approaching your clients.
Non-Disparagement
Some employers also include a non-disparagement clause prohibiting employees from speaking ill of the business.
These and other clauses may be beneficial to include in your employee separation agreement.
Being Careful with Your Employee Separation Agreement
Using an employee separation agreement can be a good way to clarify expectations and protect your business. However, employee separation agreements must be carefully drafted to avoid conflicts with state and federal law. For instance, Florida law has specific requirements regarding non-compete provisions. You would want to ensure your agreement complies with these statutory requirements. Additionally, depending on the employee, there are certain federal civil rights statutes than may be implicated.
If you plan on using an employee separation agreement, it’s crucial that you consult with an experienced business law attorney to ensure that you are using legally-compliant terms that protect your interests.
Contact an Experienced Florida Business Attorney
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with commercial leasing, business, and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.