Separation Agreement and General Release (Arkansas)

SEPARATION AGREEMENT AND GENERAL RELEASE

State of Arkansas

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 [________________________________], Arkansas [____]

Date of Agreement: [__/__/____]

RECITALS

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

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

WHEREAS, Company desires to provide Employee with certain separation benefits in exchange for Employee's agreement to the terms herein;

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

ARTICLE 1: SEPARATION OF EMPLOYMENT

1.1 Separation Date. Employee's employment with Company and all subsidiaries, affiliates, and related entities (collectively, "Company Group") shall terminate as of the Separation Date.

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

1.3 Final Wages -- Arkansas Requirements.

(a) Arkansas Final Pay (Ark. Code § 11-4-405). Upon discharge, Company shall pay all earned wages within seven (7) days if Employee makes a demand for payment. If no demand is made, Company shall pay by the next regular payday. Failure to pay within seven (7) days of the next regular payday results in the employer owing double the wages due.

(b) Final wages include all earned but unpaid base wages, overtime, and other compensation through the Separation Date. Company shall not condition payment of earned wages on execution of this Agreement.

(c) PTO/Vacation Payout. Arkansas does not require payout of accrued vacation or PTO unless Company's written policy or employment agreement provides for it. If Company policy provides payout, the amount of $[________________________________] shall be included with the final paycheck.

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

ARTICLE 2: SEVERANCE CONSIDERATION

2.1 Severance Payment.

☐ Lump Sum: $[________________________________], less withholdings, within [____] days following the Effective Date.

☐ Installments: $[________________________________] in [____] equal installments on regular payroll dates beginning after the Effective Date.

2.2 Benefits Continuation.

(a) COBRA. Employee eligible for COBRA continuation. Company shall provide required notice.

(b) Company-Paid COBRA Bridge. ☐ If selected: Company pays employer portion of COBRA premiums for [____] months. Ceases upon other group coverage or Medicare eligibility.

2.3 Outplacement Services. ☐ If applicable: Through [________________________________] for [____] months, not to exceed $[________________________________].

2.4 Equity and Bonus. Per applicable plan documents. Commissions paid per commission plan and Arkansas law.

2.5 Tax Treatment. Severance reported on W-2. Arkansas state income tax withholding applies. Payments intended to comply with or be exempt from IRC § 409A. Employee responsible for Employee's own taxes.

ARTICLE 3: GENERAL RELEASE OF CLAIMS

3.1 Employee Release. Employee releases the Company Group and all Released Parties from all claims through the date of signing, including:

(a) Federal Statutes: Title VII, ADEA, ADA, GINA, Equal Pay Act, FMLA, ERISA (excluding vested benefits), WARN Act, USERRA, 42 U.S.C. § 1981, Rehabilitation Act, Pregnant Workers Fairness Act.

(b) Arkansas State Statutes:

• Arkansas Civil Rights Act of 1993 (Ark. Code § 16-123-101 et seq.) -- prohibits employment discrimination based on race, religion, national origin, gender, and disability by employers with 9 or more employees
• Arkansas Minimum Wage Act (Ark. Code § 11-4-201 et seq.)
• Arkansas Wage Payment Law (Ark. Code § 11-4-401 et seq.)
• Arkansas Whistle-Blower Act (Ark. Code § 21-1-601 et seq.) (public sector; common law protections may also apply)
• Arkansas workers' compensation retaliatory discharge claims (Ark. Code § 11-9-107)
• All other applicable Arkansas statutory and regulatory claims

(c) Common Law Claims: Breach of contract, breach of implied covenant, promissory estoppel, 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:

(a) Right to enforce this Agreement;
(b) Vested benefits under ERISA;
(c) Workers' compensation benefits under Ark. Code § 11-9-101 et seq.;
(d) Unemployment insurance benefits;
(e) Indemnification and 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; provided, Employee waives monetary recovery (except where prohibited by law);
(h) Rights under Section 7 of the NLRA;
(i) Whistleblower protections under Sarbanes-Oxley, Dodd-Frank, and applicable Arkansas law;
(j) Rights under the Speak Out Act;
(k) Rights that cannot be waived under Arkansas or federal law.

3.3 FLSA Wage Claims. Bona fide dispute acknowledged. Consideration constitutes fair resolution. Employee represents wages paid through Separation Date.

3.4 Unknown Claims. Release covers known and unknown claims to the fullest extent permitted under Arkansas law.

3.5 Arkansas Civil Rights Act Statute of Limitations Note. Claims under the Arkansas Civil Rights Act must be filed within one (1) year of the discriminatory act or within ninety (90) days of receiving a Right-to-Sue letter or EEOC Determination, whichever is later. Employee acknowledges the release of such claims in exchange for the consideration provided.

ARTICLE 4: ADEA/OWBPA COMPLIANCE

4.1 Employee is waiving ADEA claims per 29 U.S.C. § 626(f).

4.2 Employee is advised in writing to consult an attorney.

4.3 Consideration Period: ☐ 21 days (individual) ☐ 45 days (group; see Exhibit A).

4.4 Seven-Day Revocation. Written revocation to [________________________________] within seven (7) calendar days of signing.

4.5 Consideration exceeds existing entitlements.

4.6 Written in understandable manner.

4.7 ☐ Group disclosures attached as Exhibit A if applicable.

ARTICLE 5: CONFIDENTIALITY AND NON-DISPARAGEMENT

5.1 Confidentiality. Agreement terms confidential except disclosures to spouse/partner, attorney, financial/tax advisor, as required by law, or to enforce the Agreement.

5.2 Non-Disparagement. Mutual. Employee shall not disparage Released Parties. Company shall direct officers/executives not to disparage Employee.

5.3 NLRA Section 7 Carve-Out. Nothing restricts Employee's NLRA Section 7 rights, per McLaren Macomb, 372 NLRB No. 58 (2023).

5.4 Protected Disclosures. Nothing prohibits reporting to governmental agencies, whistleblower disclosures, Speak Out Act disclosures, cooperation with investigations, or truthful testimony.

ARTICLE 6: DEFEND TRADE SECRETS ACT NOTICE

Pursuant to 18 U.S.C. § 1833(b): An individual shall not be held liable under any federal or state trade secret law for disclosure of a trade secret made (i) in confidence to a government official or attorney for reporting/investigating a suspected law violation, or (ii) in a sealed court filing. An individual suing for retaliation may disclose trade secrets to their attorney and use them in court under seal.

ARTICLE 7: RESTRICTIVE COVENANTS

7.1 Continuing Obligations. Surviving confidentiality, nondisclosure, and invention assignment agreements remain in effect.

7.2 Non-Competition. ☐ If applicable:

(a) For [____] months, Employee shall not compete within [________________________________].

(b) Arkansas Enforceability. Arkansas generally enforces reasonable non-compete agreements. Courts evaluate: (i) whether the restraint protects a legitimate business interest; (ii) whether duration and geographic scope are reasonable; and (iii) whether the restriction imposes undue hardship. Arkansas courts may reform overbroad covenants. Ark. Code § 4-75-101 (antitrust) does not prohibit employment non-competes that meet reasonableness standards.

7.3 Non-Solicitation. ☐ For [____] months, Employee shall not solicit employees or customers with whom Employee had material contact.

7.4 NLRA Savings Clause. Nothing restricts Section 7 rights.

ARTICLE 8: RETURN OF COMPANY PROPERTY

8.1 On or before the Separation Date, Employee shall return to Company all Company property in Employee's possession, custody, or control, including but not limited to:

☐ Laptop computers and peripherals
☐ Mobile phones, tablets, and electronic devices
☐ Access badges, keys, and security cards
☐ Credit cards and purchasing cards
☐ Files, documents, and records (physical and electronic)
☐ Proprietary information, trade secrets, and confidential materials
☐ Customer lists, vendor lists, and business contact information
☐ Software, tools, and equipment
☐ Company vehicles
☐ Other: [________________________________]

8.2 Employee represents and warrants that Employee has not retained copies of any Company confidential information, trade secrets, or proprietary materials on any personal device, cloud storage account, email account, or other medium.

8.3 Company shall revoke Employee's access to all Company systems, email, networks, and accounts as of the Separation Date.

8.4 No deductions shall be made from Employee's final wages for unreturned property except as permitted by Arkansas law and consistent with FLSA minimum wage/overtime requirements.

ARTICLE 9: COOPERATION

9.1 Employee agrees to cooperate reasonably with Company in connection with: (a) the transition of Employee's duties and responsibilities; (b) any pending or future litigation, arbitration, regulatory proceeding, or governmental investigation involving Company in which Employee has relevant knowledge; and (c) any audit or regulatory inquiry.

9.2 Company shall provide Employee with reasonable advance notice of any required cooperation and shall schedule activities at times that do not unreasonably interfere with Employee's subsequent employment.

9.3 Company shall reimburse Employee for reasonable out-of-pocket expenses incurred in connection with cooperation activities.

9.4 If cooperation activities exceed [____] hours in any calendar month, Company shall compensate Employee at a rate of $[________________________________] per hour.

ARTICLE 10: REFERENCE POLICY

10.1 Company agrees that in response to reference inquiries regarding Employee, Company shall provide only the following information:

☐ Dates of employment and last position held (neutral reference)
☐ The reference set forth in the attached Exhibit B
☐ Other: [________________________________]

10.2 All reference inquiries shall be directed to [________________________________] at [________________________________].

ARTICLE 11: NO ADMISSION OF LIABILITY

11.1 This Agreement does not constitute and shall not be construed as an admission by Company or Employee of any wrongdoing, liability, or violation of any law, regulation, or duty. The Parties enter into this Agreement solely to resolve all matters related to Employee's employment and separation in an amicable manner.

ARTICLE 12: GOVERNING LAW AND DISPUTE RESOLUTION

12.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Arkansas, without regard to its conflicts of law principles.

12.2 Dispute Resolution.

☐ Litigation: Any dispute arising out of or relating to this Agreement shall be resolved in the state or federal courts located in [________________________________] County, Arkansas. Each Party irrevocably consents to the personal jurisdiction and venue of such courts.

☐ Arbitration: Any dispute shall be resolved by final and binding arbitration in [________________________________], Arkansas, administered by [________________________________] in accordance with its employment arbitration rules. The following claims shall NOT be subject to mandatory arbitration: (i) workers' compensation or unemployment benefits; (ii) claims under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act; (iii) claims that cannot be compelled to arbitration under applicable law; and (iv) either Party's right to seek emergency injunctive relief.

12.3 Jury Waiver. ☐ If enforceable under Arkansas law: EACH PARTY WAIVES ANY RIGHT TO TRIAL BY JURY.

12.4 Attorneys' Fees. In any action to enforce this Agreement, the prevailing Party shall be entitled to recover reasonable attorneys' fees and costs.

ARTICLE 13: GENERAL PROVISIONS

13.1 Entire Agreement. This Agreement, together with any surviving restrictive covenant agreements, constitutes the entire agreement between the Parties regarding Employee's separation and supersedes all prior agreements, negotiations, representations, and understandings.

13.2 Amendments. This Agreement may not be amended, modified, or supplemented except by a written instrument signed by both Parties.

13.3 Severability. If any provision is held invalid, illegal, or unenforceable, the remaining provisions shall continue in full force and effect. Invalid provisions shall be modified to the minimum extent necessary to make them enforceable.

13.4 Waiver. Failure to enforce any provision shall not constitute a waiver of the right to enforce it in the future.

13.5 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. Electronic signatures shall have the same force as original signatures.

13.6 Assignment. This Agreement shall bind and benefit the Parties and their heirs, executors, administrators, successors, and assigns. Employee may not assign without Company's consent.

13.7 Notices. All notices shall be in writing and delivered personally, by certified mail (return receipt requested), or by nationally recognized overnight courier.

13.8 Construction. This Agreement shall be construed as a whole and in accordance with its fair meaning. No presumption of construction shall apply against either Party.

ARTICLE 14: EFFECTIVE DATE

14.1 This Agreement shall become effective on the eighth (8th) calendar day after Employee signs it, provided Employee does not revoke this Agreement during the seven (7) day revocation period described in Section 4.4 (the "Effective Date"). If Employee revokes, this Agreement is null and void, and no severance benefits shall be paid.

14.2 If Employee is under age 40, the Effective Date shall be the date Employee signs this Agreement, unless the Parties agree to a different consideration period.

ARTICLE 15: ACKNOWLEDGMENTS

By signing below, Employee acknowledges and agrees that:

☐ Employee has carefully read this Agreement in its entirety and understands all of its terms;

☐ Employee has been advised in writing to consult with an attorney before signing and has had the opportunity to do so;

☐ Employee is signing this Agreement voluntarily, knowingly, and of Employee's own free will, without duress or coercion;

☐ Employee has been given adequate time to consider this Agreement as set forth in Section 4.3;

☐ The consideration provided under Article 2 is in addition to anything of value to which Employee is already entitled;

☐ Employee is not waiving any rights or claims that arise after the date Employee signs this Agreement;

☐ Employee has not relied on any representations, promises, or statements not contained in this Agreement;

☐ Employee understands this Agreement includes a release of claims under the ADEA (if applicable);

☐ Employee has returned all Company property as required by Article 8;

☐ Employee understands the Arkansas-specific provisions regarding final pay timing and the double damages penalty for late payment under Ark. Code § 11-4-405.

ARKANSAS-SPECIFIC COMPLIANCE CHECKLIST

☐ Final pay (Ark. Code § 11-4-405): Within 7 days upon demand; otherwise next regular payday. Double damages for late payment after 7 days past next payday.

☐ Arkansas Civil Rights Act (Ark. Code § 16-123-101 et seq.): Covers race, religion, national origin, gender, disability; employers with 9+ employees; 1-year statute of limitations.

☐ PTO payout: Per employer policy only.

☐ Non-compete: Reasonable restraints enforceable; courts may reform.

☐ Wages not conditioned on release.

☐ OWBPA compliance (if age 40+).

☐ DTSA 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 Disclosures ☐ Exhibit B: Reference Letter ☐ Exhibit C: Payment Schedule ☐ Exhibit D: Restrictive Covenant Summary

Sources and References

• Arkansas Civil Rights Act of 1993, Ark. Code § 16-123-101 et seq., https://law.justia.com/codes/arkansas/title-16/subtitle-7/chapter-123/subchapter-1/
• Arkansas Final Pay, Ark. Code § 11-4-405, https://law.justia.com/codes/arkansas/title-11/chapter-4/subchapter-4/section-11-4-405/
• EEOC Guidance on Waivers, 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)

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