Separation Agreement and General Release (Alabama)

SEPARATION AGREEMENT AND GENERAL RELEASE

State of Alabama

PRIVILEGED AND CONFIDENTIAL

This Separation Agreement and General Release ("Agreement") is entered into by and between:

EMPLOYER: [________________________________] ("Company"), a [________________________________] organized under the laws of [________________________________], with its principal place of business at [________________________________]

EMPLOYEE: [________________________________] ("Employee"), an individual residing at [________________________________], Alabama [____]

(Company and Employee are each a "Party" and collectively the "Parties.")

Date of Agreement: [__/__/____]

RECITALS

WHEREAS, Employee has been employed by Company in the position of [________________________________] since [__/__/____], working primarily in the State of Alabama;

WHEREAS, the Parties have mutually agreed that Employee's employment with Company shall end effective [__/__/____] (the "Separation Date");

WHEREAS, the Parties desire to resolve all matters relating to Employee's employment and the termination thereof;

WHEREAS, Company desires to provide Employee with certain separation benefits to which Employee is not otherwise entitled, in exchange for Employee's agreement to the terms of this Agreement;

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the Parties agree as follows:

ARTICLE 1: SEPARATION OF EMPLOYMENT

1.1 Separation Date. Employee's employment with Company and all subsidiaries, affiliates, parents, and related entities (collectively, "Company Group") shall terminate as of the Separation Date. Employee hereby resigns from all positions held with any member of the Company Group.

1.2 Last Day of Work. Employee's last day of active work shall be [__/__/____].

1.3 Final Wages -- Alabama Requirements.

(a) Alabama Final Pay. Alabama does not have a general final paycheck timing statute for private employers. Company shall pay all earned wages and compensation promptly and no later than the next regular payday following the Separation Date, or earlier if required by Company policy or contract. Company shall not condition payment of earned wages on Employee's execution of this Agreement.

(b) Sales Representative Commissions. If Employee is a sales representative, all commissions due at the time of termination must be paid within thirty (30) days from termination pursuant to Ala. Code § 8-24-1 through § 8-24-3. Failure to pay may result in treble damages, attorneys' fees, and court costs.

(c) PTO/Vacation Payout. Alabama does not require payout of accrued vacation or PTO upon separation unless Company's written policy, employment offer, or collective bargaining agreement provides for such payout. If Company policy provides for payout, accrued PTO in the amount of $[________________________________] shall be paid with the final paycheck. Company policy is: ☐ Attached as Exhibit [____] ☐ Summarized as follows: [________________________________].

1.4 Expense Reimbursement. Employee shall submit all outstanding business expense reimbursement requests within [____] days of the Separation Date.

ARTICLE 2: SEVERANCE CONSIDERATION

In consideration for Employee's execution, non-revocation, and compliance with this Agreement, Company shall provide the following severance benefits, which Employee acknowledges exceed anything to which Employee is already entitled:

2.1 Severance Payment.

☐ Lump Sum: Company shall pay Employee $[________________________________] (equivalent to [____] weeks/months of base salary), less applicable withholdings, within [____] days following the Effective Date.

☐ Installments: Company shall pay Employee $[________________________________], less applicable withholdings, in [____] equal installments on Company's regular payroll dates, beginning on the first regular payroll date following the Effective Date.

2.2 Benefits Continuation.

(a) COBRA. Following the Separation Date, Employee shall be eligible for COBRA continuation coverage. Company shall provide the required COBRA election notice.

(b) Company-Paid COBRA Bridge. ☐ If selected: Company shall pay or reimburse the employer portion of COBRA premiums for [____] months, provided Employee timely elects COBRA. This benefit ceases if Employee becomes eligible for other group health coverage or Medicare.

2.3 Outplacement Services. ☐ If applicable: Company shall provide outplacement services through [________________________________] for [____] months, not to exceed $[________________________________].

2.4 Equity and Bonus.

(a) Equity Awards. Treatment per applicable plan documents and award agreements. Vested but unexercised options must be exercised within [____] days following the Separation Date.

(b) Annual Bonus. ☐ Pro-rated bonus of $[________________________________] for fiscal year [____]. ☐ No bonus entitlement.

(c) Commissions. Earned but unpaid commissions shall be paid per the commission plan and Ala. Code § 8-24-1 if applicable.

2.5 Tax Treatment and Section 409A Compliance.

(a) Severance payments reported on IRS Form W-2. All applicable federal and Alabama state income taxes withheld. Alabama imposes a state income tax; withholdings shall comply with Alabama Department of Revenue requirements.

(b) Payments intended to comply with or be exempt from Section 409A of the IRC. Each installment treated as a separate payment. Specified employee delay provisions apply if applicable.

(c) Employee is solely responsible for Employee's own tax obligations.

ARTICLE 3: GENERAL RELEASE OF CLAIMS

3.1 Employee Release. In consideration of the severance benefits in Article 2, Employee hereby releases the Company Group and their respective officers, directors, employees, shareholders, partners, agents, attorneys, insurers, predecessors, successors, assigns, subsidiaries, and affiliates (collectively, "Released Parties") from any and all claims, from the beginning of time through the date Employee signs this Agreement, including but not limited to claims arising under:

(a) Federal Statutes:

• Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.)
• Age Discrimination in Employment Act (29 U.S.C. § 621 et seq.)
• Americans with Disabilities Act (42 U.S.C. § 12101 et seq.)
• Genetic Information Nondiscrimination Act (42 U.S.C. § 2000ff et seq.)
• Equal Pay Act (29 U.S.C. § 206(d))
• Family and Medical Leave Act (29 U.S.C. § 2601 et seq.)
• ERISA (29 U.S.C. § 1001 et seq.) (excluding vested benefits)
• WARN Act (29 U.S.C. § 2101 et seq.)
• USERRA (38 U.S.C. § 4301 et seq.)
• 42 U.S.C. § 1981
• Rehabilitation Act (29 U.S.C. § 701 et seq.)
• Pregnant Workers Fairness Act (42 U.S.C. § 2000gg et seq.)

(b) Alabama State Law:

IMPORTANT NOTE: Alabama does not have a comprehensive state civil rights or anti-discrimination employment statute comparable to those in most other states. Employee protections against employment discrimination in Alabama are primarily federal. However, the following Alabama-specific claims are included in this release:

• Alabama Age Discrimination Act (Ala. Code § 25-1-20 et seq.) -- prohibits age-based employment discrimination by employers with 20+ employees
• Claims under Ala. Code § 8-24-1 et seq. (Sales Representative Commission Act), to the extent waivable
• Claims under the Alabama Workers' Compensation Act (Ala. Code § 25-5-1 et seq.), to the extent waivable (retaliatory discharge claims under Ala. Code § 25-5-11.1 are included)
• Alabama common law claims, including wrongful discharge in violation of public policy
• Alabama statutory claims regarding wage payment and deductions

(c) Common Law Claims: Breach of contract (express or implied), breach of the implied covenant of good faith and fair dealing, promissory estoppel, negligent or intentional infliction of emotional distress, fraud, misrepresentation, defamation, invasion of privacy, wrongful discharge, tortious interference, and negligence.

3.2 Carve-Outs from Release. This release does NOT waive or release:

(a) Employee's right to enforce this Agreement;

(b) Claims for vested benefits under ERISA or applicable law;

(c) Workers' compensation benefits under Ala. Code § 25-5-1 et seq.;

(d) Unemployment insurance benefits under Ala. Code § 25-4-1 et seq.;

(e) Indemnification or D&O insurance rights;

(f) Claims arising after the date of signing;

(g) Right to file charges with the EEOC, NLRB, SEC, OSHA, DOL, or any governmental agency, or to participate in any investigation; provided, Employee waives the right to recover monetary damages or individual relief (except where prohibited by law);

(h) Rights under Section 7 of the NLRA (29 U.S.C. § 157);

(i) Whistleblower protections under the Sarbanes-Oxley Act, Dodd-Frank Act, and applicable Alabama law;

(j) Rights under the Speak Out Act regarding sexual assault or sexual harassment;

(k) Any rights that cannot be waived under Alabama or federal law.

3.3 FLSA Wage Claims. The Parties acknowledge a bona fide dispute exists regarding any potential FLSA wage claims. The consideration herein constitutes a fair and reasonable resolution. Employee represents that all wages, overtime, and compensation owed through the Separation Date have been paid or are resolved through this Agreement.

3.4 Unknown Claims. This release covers known and unknown claims to the fullest extent permitted under Alabama law. Employee expressly waives any rights under any statute or common law principle that would limit this release to claims known or suspected at signing.

3.5 Medicare Secondary Payer Act. Employee represents that Employee's Medicare status has been considered and the Parties will cooperate in complying with Medicare's requirements.

ARTICLE 4: ADEA/OWBPA COMPLIANCE

This section applies if Employee is age 40 or older.

4.1 Specific ADEA Reference. Employee is waiving claims under the ADEA, as amended by the OWBPA, 29 U.S.C. § 626(f).

4.2 Advice to Consult Attorney. Employee is advised in writing to consult an attorney before signing. Employee has had the opportunity to do so.

4.3 Consideration Period.

☐ Twenty-one (21) days (individual separation).
☐ Forty-five (45) days (group termination program; see Exhibit A for OWBPA disclosures).

Changes to this Agreement do not restart the consideration period.

4.4 Seven-Day Revocation Period. Employee may revoke within seven (7) calendar days after signing by delivering written notice to [________________________________] at [________________________________]. This Agreement becomes effective only after the revocation period expires.

4.5 Adequate Consideration. The severance benefits exceed anything Employee is already entitled to.

4.6 Plain Language. This Agreement is written in an understandable manner.

4.7 Group Disclosures. ☐ If applicable: See Exhibit A.

ARTICLE 5: CONFIDENTIALITY AND NON-DISPARAGEMENT

5.1 Confidentiality of Agreement Terms. Employee shall keep the terms of this Agreement confidential except disclosures to: (a) spouse or domestic partner; (b) attorney, financial advisor, or tax preparer; (c) as required by law; or (d) to enforce this Agreement.

5.2 Non-Disparagement.

(a) Employee shall not make disparaging statements about the Released Parties.

(b) Company shall direct current officers and senior executives not to make disparaging statements about Employee.

(c) Alabama Good-Faith Statement Safeguard. Nothing in this non-disparagement provision shall prohibit either Party from making good-faith statements for legitimate purposes, including statements made to government agencies, in response to legal process, or in connection with legal compliance obligations.

5.3 NLRA Section 7 Carve-Out (McLaren Macomb Compliance). Nothing in this Agreement restricts Employee's rights under Section 7 of the NLRA, including protected concerted activity, discussing wages and working conditions, filing NLRB charges, or other NLRA-protected rights, per McLaren Macomb, 372 NLRB No. 58 (2023).

5.4 Protected Disclosures. Nothing prohibits Employee from: (a) reporting law violations to governmental agencies; (b) making protected whistleblower disclosures; (c) disclosures regarding sexual assault/harassment under the Speak Out Act; (d) cooperating with governmental investigations; or (e) testifying truthfully.

ARTICLE 6: DEFEND TRADE SECRETS ACT NOTICE

Pursuant to 18 U.S.C. § 1833(b): Employee is notified that:

(a) An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (i) is made in confidence to a government official or attorney solely for reporting or investigating a suspected violation of law; or (ii) is made in a sealed court filing.

(b) An individual suing for retaliation for reporting a suspected law violation may disclose trade secrets to their attorney and use trade secret information in court proceedings under seal.

ARTICLE 7: RESTRICTIVE COVENANTS

7.1 Continuing Obligations. Employee's obligations under previously executed confidentiality, nondisclosure, and invention assignment agreements survive termination and remain in effect.

7.2 Non-Competition. ☐ If applicable:

(a) For [____] months following the Separation Date, Employee shall not engage in competitive activity within [________________________________].

(b) Alabama Restrictive Covenants Act (Ala. Code § 8-1-190 et seq.). Alabama permits non-compete agreements that protect a "protectable interest" (including trade secrets, confidential information, relationships with specific customers/clients, customer goodwill, and training investment). Duration presumptions: employee non-competes are presumed reasonable if two (2) years or less; customer non-solicitation covenants are presumed reasonable if eighteen (18) months or less. Any non-compete in this Agreement must: (i) identify the protectable interest; (ii) be reasonable in scope, duration, and geography; and (iii) comply with the Act. Courts may reform overbroad provisions.

7.3 Non-Solicitation. ☐ If applicable: For [____] months (not to exceed 18 months per Alabama presumption), Employee shall not solicit employees, customers, or clients with whom Employee had material contact.

7.4 NLRA Savings Clause. Nothing in this Article restricts Employee's rights under Section 7 of the NLRA.

ARTICLE 8: RETURN OF COMPANY PROPERTY

8.1 Employee shall return all Company property on or before the Separation Date, including laptops, phones, badges, keys, credit cards, files, documents, confidential materials, customer lists, and equipment. No deductions from final wages for unreturned property except as permitted by law and consistent with FLSA minimum wage/overtime rules.

8.2 Employee represents that no copies of confidential information have been retained on personal devices or accounts.

8.3 Company shall revoke system access as of the Separation Date.

ARTICLE 9: COOPERATION

9.1 Employee shall cooperate reasonably with Company regarding transition, litigation, and regulatory matters.

9.2 Company shall provide reasonable notice and reimburse reasonable expenses.

9.3 If cooperation exceeds [____] hours per month, Company shall compensate Employee at $[________________________________] per hour.

ARTICLE 10: REFERENCE POLICY

10.1 Company shall provide: ☐ Neutral verification (dates and title only). ☐ Reference per Exhibit B. ☐ Other: [________________________________].

ARTICLE 11: NO ADMISSION OF LIABILITY

This Agreement is not an admission of wrongdoing or liability by either Party.

ARTICLE 12: GOVERNING LAW AND DISPUTE RESOLUTION

12.1 Governing Law. This Agreement is governed by the laws of the State of Alabama.

12.2 Dispute Resolution.

☐ Litigation: Disputes resolved in the state or federal courts in [________________________________] County, Alabama.

☐ Arbitration: Binding arbitration in [________________________________], Alabama, administered by [________________________________]. Excluded claims: workers' compensation, unemployment benefits, Ending Forced Arbitration Act claims, other non-arbitrable claims, and emergency injunctive relief.

12.3 Attorneys' Fees. Prevailing Party entitled to reasonable attorneys' fees and costs.

ARTICLE 13: GENERAL PROVISIONS

13.1 Entire Agreement. This Agreement constitutes the entire agreement regarding Employee's separation.

13.2 Amendments. Written amendments signed by both Parties required.

13.3 Severability. Invalid provisions shall be modified to the minimum extent necessary; remaining provisions survive.

13.4 Waiver. Failure to enforce does not waive future enforcement rights.

13.5 Counterparts. Execution in counterparts (including electronic) permitted.

13.6 Notices. Written notices by personal delivery, certified mail, or overnight courier.

ARTICLE 14: EFFECTIVE DATE

14.1 This Agreement becomes effective on the eighth (8th) calendar day after Employee signs (provided no revocation). If revoked, this Agreement is null and void.

14.2 If Employee is under 40, the Effective Date is the date of signing unless otherwise agreed.

ARTICLE 15: ACKNOWLEDGMENTS

Employee acknowledges:

☐ Employee has read and understands the entire Agreement;
☐ Employee has been advised to consult an attorney and had the opportunity to do so;
☐ Employee signs voluntarily, knowingly, and without duress;
☐ Employee has had adequate time to consider this Agreement;
☐ The consideration exceeds anything Employee is already entitled to;
☐ Employee is not waiving rights arising after the date of signing;
☐ Employee understands this includes a release of ADEA claims (if applicable);
☐ Employee has returned all Company property.

ALABAMA-SPECIFIC COMPLIANCE CHECKLIST

☐ No general state civil rights act: Alabama lacks a comprehensive state anti-discrimination employment statute; federal laws (Title VII, ADA, ADEA) are primary protections. Alabama Age Discrimination Act (Ala. Code § 25-1-20) applies to employers with 20+ employees.

☐ Final pay: No specific Alabama final paycheck timing statute for private employers. Pay promptly, no later than next regular payday.

☐ Sales representative commissions: If applicable, pay within 30 days per Ala. Code § 8-24-1 (treble damages for failure).

☐ PTO payout: Only if required by written policy, offer, or CBA.

☐ Non-compete compliance: Ala. Code § 8-1-190 et seq. -- protectable interest identified, reasonable scope, duration presumptions (2 years non-compete, 18 months non-solicit).

☐ Wages not conditioned on release.

☐ Deductions: Only as permitted by law and consistent with FLSA.

☐ OWBPA compliance (if Employee age 40+).

☐ DTSA whistleblower notice included.

☐ NLRA Section 7 carve-out included.

SIGNATURES

EMPLOYEE:

Signature: [________________________________]

Printed Name: [________________________________]

Date: [__/__/____]

COMPANY:

Signature: [________________________________]

Printed Name: [________________________________]

Title: [________________________________]

Date: [__/__/____]

EXHIBITS

☐ Exhibit A: OWBPA Group Termination Disclosures (if applicable)
☐ Exhibit B: Reference Letter / Reference Policy
☐ Exhibit C: Severance Payment Schedule
☐ Exhibit D: Summary of Surviving Restrictive Covenant Agreements

Sources and References

• Alabama Restrictive Covenants Act, Ala. Code § 8-1-190 et seq.
• Alabama Age Discrimination Act, Ala. Code § 25-1-20 et seq.
• Alabama Sales Representative Commission Act, Ala. Code § 8-24-1 et seq.
• Baker Donelson, Quick and Easy Guide to Labor & Employment Law: Alabama, https://www.bakerdonelson.com/easy-guide-alabama
• EEOC, Q&A: Understanding Waivers of Discrimination Claims, https://www.eeoc.gov/laws/guidance/qa-understanding-waivers-discrimination-claims-employee-severance-agreements
• NLRB, McLaren Macomb, 372 NLRB No. 58 (2023)
• 18 U.S.C. § 1833(b) (DTSA Whistleblower Immunity)
• 29 U.S.C. § 626(f) (OWBPA Requirements)

This template is provided for informational purposes only by ezel.ai and does not constitute legal advice. Consult a qualified attorney licensed in Alabama before use.