Severance Agreements
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info@kowtunlaw.comSeverance Agreements: Protecting Your Business After Employee Separation
A severance agreement is a contract between an employer and a departing employee that outlines compensation and benefits in exchange for the employee waiving their right to sue the company.
Why Use Our Firm To Draft Your Severance Agreements?
While Texas law generally does not require employers to provide severance pay, such agreements are common tools for managing risk. We draft our severance agreements to include clauses such as non-disparagement, confidentiality, and the return of company property, so you can feel more secure following an employee separation.
Contact us today to discuss drafting your severance agreements.
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Frequently Asked Questions
The primary purpose of a severance agreement is to obtain a full legal release of claims from a departing employee to protect the employer from future litigation.
It is a sweeping waiver that covers virtually all potential legal actions. For example, claims of wrongful termination, discrimination, harassment, and breach of contract.
The Older Workers Benefit Protection Act (OWBPA) applies to employees over 40, who have special rights under the Act. We must include specific language as well as provide a review period and a revocation period for the waiver of age discrimination claims to be valid.
No, severance pay is not legally required in Texas except if a specific employment contract or company policy mandates it. However, strategically offering severance can help secure a full release of claims.
We advise our clients to include non-disparagement clauses that prohibit the departing employee from making negative statements about your business, its employees, or its management.
Severance payments generally do not prevent an employee from receiving unemployment benefits, though the timing of payments may impact when benefits begin.
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