Separation Agreement and General Release (Arizona)

SEPARATION AGREEMENT AND GENERAL RELEASE

State of Arizona

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 [________________________________], Arizona [____]

Date of Agreement: [__/__/____]

RECITALS

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

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 -- Arizona Requirements.

(a) Arizona Final Pay (A.R.S. § 23-353). When Employee is discharged by Company, Company shall pay all wages due within seven (7) working days or by the end of the next regular pay period, whichever is sooner. If Employee voluntarily quits, wages are due by the next regular payday. Willful failure to pay constittes a class 2 misdemeanor and may result in treble damages.

(b) Final wages shall be paid regardless of whether Employee executes this Agreement. Company shall not condition earned wages on execution of this Agreement.

(c) PTO/Vacation Payout. Arizona does not have a specific statute requiring vacation payout. Payout is governed by Company's written policy or agreement. If Company policy provides for payout, $[________________________________] shall be included in the final paycheck.

(d) Arizona Earned Paid Sick Time (Proposition 206). Earned paid sick time under A.R.S. § 23-371 et seq. is not required to be paid out upon separation unless Company policy provides otherwise.

1.4 Expense Reimbursement. Employee shall submit all outstanding expenses within [____] days.

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.

2.2 Benefits Continuation.

(a) COBRA. Employee eligible for COBRA continuation coverage.

(b) Company-Paid COBRA Bridge. ☐ Company pays employer portion of COBRA premiums for [____] months.

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

2.4 Equity and Bonus. Per applicable plan documents.

2.5 Tax Treatment. Reported on W-2. Arizona state income tax withholding applies. IRC § 409A compliance intended. Employee responsible for Employee's 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) Arizona State Statutes:

• Arizona Civil Rights Act (A.R.S. § 41-1461 et seq.) -- prohibits employment discrimination based on race, color, religion, sex, age (40+), national origin, or disability by employers with 15+ employees (1+ for sexual harassment)
• Arizona Employment Protection Act (A.R.S. § 23-1501) -- at-will employment with public policy exceptions
• Arizona Wage Payment Act (A.R.S. § 23-350 et seq.)
• Arizona Earned Paid Sick Time Act (A.R.S. § 23-371 et seq.)
• Arizona workers' compensation retaliatory discharge protections
• Arizona whistleblower protection (A.R.S. § 38-532 for public employees; common law protections)
• All other applicable Arizona statutory and regulatory claims

(c) Common Law Claims: Breach of contract, breach of implied covenant of good faith and fair dealing, promissory estoppel, emotional distress (intentional and negligent), fraud, misrepresentation, defamation, invasion of privacy, wrongful discharge in violation of public policy (per Wagenseller v. Scottsdale Memorial Hospital, 710 P.2d 1025 (Ariz. 1985)), 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;
(d) Unemployment insurance benefits;
(e) Indemnification and D&O insurance rights;
(f) Claims arising after signing;
(g) Right to file charges with the EEOC, Arizona Civil Rights Division (Attorney General), NLRB, SEC, OSHA, DOL, or any agency; Employee waives monetary recovery except where prohibited;
(h) Section 7 NLRA rights;
(i) Whistleblower protections;
(j) Speak Out Act rights;
(k) Rights that cannot be waived under Arizona or federal law.

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

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

3.5 Medicare Secondary Payer Act. Medicare status considered; Parties will cooperate with Medicare requirements.

ARTICLE 4: ADEA/OWBPA COMPLIANCE

4.1 ADEA claims waived per 29 U.S.C. § 626(f).

4.2 Employee advised in writing to consult attorney.

4.3 ☐ 21 days (individual) ☐ 45 days (group; Exhibit A).

4.4 7-day revocation by written notice to [________________________________].

4.5 Consideration exceeds existing entitlements.

4.6 Written in understandable manner.

4.7 ☐ Group disclosures: Exhibit A.

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 directs officers/executives not to disparage Employee.

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

5.4 Protected Disclosures. Nothing prohibits reporting to governmental agencies (including the Arizona Civil Rights Division), 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 trade secret law for disclosure made (i) in confidence to a government official or attorney for reporting/investigating a suspected law violation, or (ii) in a sealed court filing. Retaliation claimants may disclose trade secrets to their attorney and use them in court under seal.

ARTICLE 7: RESTRICTIVE COVENANTS

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

7.2 Non-Competition. ☐ If applicable:

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

(b) Arizona Enforceability. Arizona enforces reasonable non-compete agreements. Courts consider: (i) whether the restriction is greater than necessary to protect the employer's legitimate business interest; (ii) whether the restriction imposes undue hardship on the employee; and (iii) whether the restriction injures the public. Arizona courts may "blue-pencil" overbroad restrictions. Non-competes must be reasonable in scope, duration, and geographic area. Arizona follows the Employment Protection Act (A.R.S. § 23-1501) at-will framework but recognizes enforceable contractual restrictions.

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 all Company property, 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 that no copies of confidential information have been retained on any personal device, cloud storage, or other medium.

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

8.4 No deductions from final wages for unreturned property except as permitted by Arizona law and consistent with FLSA requirements.

ARTICLE 9: COOPERATION

9.1 Employee shall cooperate reasonably with Company regarding: (a) transition of duties; (b) any pending or future litigation, arbitration, or investigation; and (c) any audit or regulatory inquiry.

9.2 Company shall provide reasonable advance notice and shall not unreasonably interfere with Employee's subsequent employment.

9.3 Company shall reimburse reasonable out-of-pocket expenses.

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

ARTICLE 10: REFERENCE POLICY

10.1 Company agrees that in response to reference inquiries, Company shall provide:

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

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

ARTICLE 11: NO ADMISSION OF LIABILITY

11.1 This Agreement does not constitute an admission of wrongdoing, liability, or violation of any law by either Party. The Parties enter into this Agreement solely to resolve matters related to Employee's separation.

ARTICLE 12: GOVERNING LAW AND DISPUTE RESOLUTION

12.1 Governing Law. This Agreement shall be governed by the laws of the State of Arizona, without regard to conflicts of law principles.

12.2 Dispute Resolution.

☐ Litigation: Disputes shall be resolved in the state or federal courts in [________________________________] County, Arizona. Each Party consents to jurisdiction and venue.

☐ Arbitration: Binding arbitration in [________________________________], Arizona, administered by [________________________________]. Excluded: (i) workers' compensation/unemployment; (ii) Ending Forced Arbitration Act claims; (iii) non-arbitrable claims; (iv) emergency injunctive relief.

12.3 Jury Waiver. ☐ If enforceable: EACH PARTY WAIVES JURY TRIAL RIGHTS.

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

ARTICLE 13: GENERAL PROVISIONS

13.1 Entire Agreement. This Agreement constitutes the entire agreement regarding separation and supersedes all prior agreements.

13.2 Amendments. Written amendments signed by both Parties required.

13.3 Severability. Invalid provisions modified to minimum extent; remaining provisions survive.

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

13.5 Counterparts. Execution in counterparts permitted, including electronic signatures.

13.6 Assignment. Binding on heirs, executors, successors, and assigns. Employee may not assign without consent.

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

13.8 Construction. Construed as a whole; no presumption against either Party.

ARTICLE 14: EFFECTIVE DATE

14.1 Effective on the eighth (8th) calendar day after signing, provided no revocation during the seven-day period (the "Effective Date"). If revoked, Agreement is null and void.

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

ARTICLE 15: ACKNOWLEDGMENTS

By signing below, Employee acknowledges and agrees that:

☐ Employee has carefully read and understands this entire Agreement;

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

☐ Employee signs voluntarily, knowingly, and without duress;

☐ Adequate time to consider has been provided;

☐ The consideration exceeds anything Employee is already entitled to;

☐ Employee is not waiving rights arising after the date of signing;

☐ Employee has not relied on representations outside this Agreement;

☐ Employee understands the ADEA release (if applicable);

☐ Employee has returned all Company property;

☐ Employee understands Arizona-specific final pay requirements under A.R.S. § 23-353.

ARIZONA-SPECIFIC COMPLIANCE CHECKLIST

☐ Final pay (A.R.S. § 23-353): Discharge -- within 7 working days or end of next pay period, whichever sooner. Quit -- next regular payday. Treble damages for willful failure.

☐ Arizona Civil Rights Act (A.R.S. § 41-1461 et seq.): Covers race, color, religion, sex, age (40+), national origin, disability; 15+ employees (1+ for sexual harassment). File with AZ Civil Rights Division within 180 days or EEOC within 300 days.

☐ Employment Protection Act (A.R.S. § 23-1501): At-will with public policy exceptions.

☐ PTO payout: Per employer policy only (no statutory mandate).

☐ Earned Paid Sick Time: Not required to be paid out.

☐ Non-compete: Enforceable if reasonable; courts may blue-pencil.

☐ 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

• Arizona Civil Rights Act, A.R.S. § 41-1461 et seq.
• Arizona Final Pay, A.R.S. § 23-353, https://www.azleg.gov/ars/23/00353.htm
• Arizona Employment Protection Act, A.R.S. § 23-1501
• Wagenseller v. Scottsdale Memorial Hospital, 710 P.2d 1025 (Ariz. 1985)
• 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 Arizona before use.