Separation Agreement and General Release (Colorado)

SEPARATION AGREEMENT AND GENERAL RELEASE

State of Colorado

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 [________________________________], Colorado [____]

Date of Agreement: [__/__/____]

RECITALS

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

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 -- Colorado Requirements (CRITICAL).

(a) Colorado Wage Claim Act (C.R.S. § 8-4-104 and § 8-4-109). If Employee is discharged (involuntary termination), all earned, vested, determinable, and unpaid wages are due and payable immediately at the time of discharge. If the employer's accounting unit responsible for preparation of paychecks is located offsite, wages are due no later than six (6) hours after the start of the next regular workday. If Employee resigns (voluntary termination), wages are due no later than the next regular payday.

(b) Final wages include all earned base wages, overtime, commissions, and any other vested compensation through the Separation Date. Company shall NOT condition payment of earned wages on Employee's execution of this Agreement. Violation of final pay requirements may subject the employer to penalties, including continuation wages and other remedies under the Colorado Wage Claim Act.

(c) MANDATORY Vacation/PTO Payout. Under Colorado law (C.R.S. § 8-4-101(14)(a)(III) and Nieto v. Clark's Market, 2021 CO 48), all earned and determinable vacation is treated as wages and must be paid upon separation. Forfeiture of earned vacation is void. Company shall pay all accrued vacation/PTO in the amount of $[________________________________] with the final paycheck. Accrual caps are permissible, but earned vacation cannot be forfeited. "Unlimited" PTO policies are not payable unless the PTO is actually limited, measurable, or determinable.

(d) No Use-It-or-Lose-It. Colorado prohibits use-it-or-lose-it policies for earned vacation. Employers may cap total accrual but cannot forfeit what has been earned.

1.4 Expense Reimbursement. Employee shall submit all outstanding expenses within [____] days. Company shall reimburse per policy and Colorado law.

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 and Colorado state continuation (if applicable). Company provides required notice.

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

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. Colorado state income tax withheld. 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) Colorado State Statutes:

• Colorado Anti-Discrimination Act (C.R.S. § 24-34-401 et seq. / "CADA") -- prohibits employment discrimination based on disability, race, creed, color, sex, sexual orientation (including transgender status), religion, age, national origin, ancestry, and marital status
• POWR Act (SB23-172, effective August 7, 2023) -- expanded harassment standards and nondisclosure/non-disparagement restrictions under CADA
• Colorado Wage Claim Act (C.R.S. § 8-4-101 et seq.)
• Colorado Equal Pay for Equal Work Act (C.R.S. § 8-5-101 et seq.)
• Colorado FAMLI Act (C.R.S. § 8-13.3-501 et seq.)
• Colorado Healthy Families and Workplaces Act (C.R.S. § 8-13.3-401 et seq.)
• Colorado workers' compensation retaliatory discharge (C.R.S. § 8-74-102)
• Colorado whistleblower protections
• All other applicable Colorado statutory claims

(c) Common Law Claims: Breach of contract, breach of implied covenant, promissory estoppel, emotional distress, fraud, misrepresentation, defamation, invasion of privacy, wrongful discharge in violation of public policy, tortious interference, and negligence.

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

(a) Right to enforce this Agreement;
(b) Vested benefits;
(c) Workers' compensation benefits (C.R.S. § 8-40-101 et seq.);
(d) Unemployment insurance benefits;
(e) Indemnification and D&O insurance rights;
(f) Claims arising after signing;
(g) Right to file charges with the EEOC, Colorado Civil Rights Division (CCRD), 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) POWR Act rights (see Section 5.5 below);
(l) Rights that cannot be waived under Colorado 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 permitted under Colorado law.

ARTICLE 4: ADEA/OWBPA COMPLIANCE

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

4.2 Employee advised 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, NON-DISPARAGEMENT, AND POWR ACT COMPLIANCE

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 Section 7 rights, per McLaren Macomb, 372 NLRB No. 58 (2023).

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

5.5 COLORADO POWR ACT COMPLIANCE (SB23-172) -- CRITICAL.

(a) Right to Discuss Discriminatory/Unfair Employment Practices. Nothing in this Agreement shall be construed to prevent Employee from disclosing the underlying facts of any alleged discriminatory or unfair employment practice. Employee retains the full right to discuss such facts with any person, including but not limited to attorneys, government agencies, coworkers, and the public.

(b) Disclosure Not Disparagement. The Parties expressly acknowledge and agree that the disclosure of the underlying facts of any alleged discriminatory or unfair employment practice does not constitute disparagement under Section 5.2 of this Agreement.

(c) Employer Non-Disparagement Enforcement Limitation. If Company or any Released Party disparages Employee in violation of Section 5.2(b), Company shall not seek to enforce the non-disparagement or non-disclosure provisions of this Agreement against Employee and shall not seek damages against Employee for violating those provisions.

(d) Liquidated Damages. Any liquidated damages provisions in this Agreement or any related agreement are reasonable, proportionate, and not punitive, as required by the POWR Act.

(e) POWR Act Addendum. The Parties attest, by signing the addendum attached as Exhibit [____], that this Agreement complies with the requirements of C.R.S. § 24-34-402(2.5) (as amended by SB23-172). The addendum must be signed by all Parties.

WARNING: Under the POWR Act, merely presenting an employee with a nondisclosure or non-disparagement agreement that violates these requirements gives rise to a civil action for actual damages, penalties of $5,000 per violation, costs, and attorneys' fees. Ensure full compliance before presenting this Agreement.

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) Colorado Non-Compete Requirements (C.R.S. § 8-2-113) -- STRICT COMPLIANCE REQUIRED.

Colorado generally voids non-compete agreements unless they meet specific statutory exceptions:

• Trade Secret Protection: Non-competes are permitted only for the protection of trade secrets, and only if no broader than reasonably necessary to protect the employer's legitimate interest in protecting trade secrets.
• Highly Compensated Employees (HCE): Only an employee earning annualized cash compensation at or above the HCE threshold (adjusted annually by the Colorado Department of Labor; verify current threshold) may be subject to a non-compete.
• Non-Solicitation: Only employees earning at least 60% of the HCE threshold may be subject to a non-solicitation of customers covenant.
• Advance Written Notice: The employer must provide the employee with a separate written notice of the non-compete terms. The notice must be in the language used to communicate with the employee and must be provided before the earlier of the effective date of the agreement or 14 days after the employee receives an offer.
• Reasonable Scope and Duration: The non-compete must be reasonable.

IMPORTANT: If Employee's compensation does not meet the applicable threshold, or if the required notice was not properly provided, DELETE all non-compete provisions from this Agreement. Void non-competes may expose the employer to penalties.

7.3 Non-Solicitation. ☐ If applicable (Employee meets 60% HCE threshold): For [____] months, Employee shall not solicit customers with whom Employee had material contact.

7.4 NLRA Savings Clause. Nothing restricts Section 7 rights.

ARTICLE 8: RETURN OF COMPANY PROPERTY

Employee shall return all Company property by the Separation Date. No copies retained. System access revoked. No deductions from final wages for unreturned property except as allowed by Colorado law and FLSA.

ARTICLE 9: COOPERATION

Reasonable cooperation. Company reimburses expenses. Compensation at $[________________________________]/hour beyond [____] hours/month.

ARTICLE 10: REFERENCE POLICY

☐ Neutral verification. ☐ Per Exhibit B. ☐ Other: [________________________________].

ARTICLE 11: NO ADMISSION OF LIABILITY

Not an admission of wrongdoing by either Party.

ARTICLE 12: GOVERNING LAW AND DISPUTE RESOLUTION

12.1 Governing Law. Laws of the State of Colorado.

12.2 Dispute Resolution. ☐ Litigation in [________________________________] County, Colorado. ☐ Binding arbitration in [________________________________], Colorado, excluding non-arbitrable claims.

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

ARTICLE 13: GENERAL PROVISIONS

13.1 Entire agreement. 13.2 Written amendments only. 13.3 Severability. 13.4 No waiver. 13.5 Counterparts. 13.6 Written notices.

ARTICLE 14: EFFECTIVE DATE

Effective on the eighth (8th) day after signing (if no revocation). Under age 40: effective on signing date.

ARTICLE 15: ACKNOWLEDGMENTS

☐ Read and understood; ☐ Advised to consult attorney; ☐ Signing voluntarily; ☐ Adequate time provided; ☐ Consideration exceeds entitlements; ☐ Not waiving post-signing rights; ☐ Understands ADEA release (if applicable); ☐ Returned Company property; ☐ Understands POWR Act rights are preserved.

COLORADO-SPECIFIC COMPLIANCE CHECKLIST

☐ Final pay (C.R.S. § 8-4-104): Discharge = IMMEDIATELY (6-hour offsite accounting exception). Resignation = next regular payday. Penalties for late payment.

☐ Vacation/PTO payout MANDATORY: ALL earned/determinable vacation = wages. Forfeiture VOID (Nieto v. Clark's Market, 2021 CO 48). No use-it-or-lose-it. Accrual caps OK; forfeiture prohibited. Unlimited PTO not payable unless actually limited/determinable.

☐ Wages NOT conditioned on release.

☐ CADA claims released (C.R.S. § 24-34-401 et seq.): Race, creed, color, sex, sexual orientation, religion, age, national origin, ancestry, marital status, disability.

☐ POWR Act compliance (SB23-172): (a) Disclosure of discriminatory/unfair practices NOT disparagement; (b) employer disparagement terminates enforcement; (c) no punitive liquidated damages; (d) signed addendum required; (e) $5,000 penalty per violation for non-compliant agreements.

☐ Non-compete (C.R.S. § 8-2-113): HCE threshold met? Advance written notice in employee's language? Trade secret protection? Reasonable scope? If not, DELETE non-compete provisions.

☐ Equal Pay for Equal Work Act compliance.

☐ 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: [__/__/____]

POWR ACT ADDENDUM

The undersigned Parties attest that this Separation Agreement and General Release complies with the requirements of C.R.S. § 24-34-402(2.5) (as amended by SB23-172), including:

☐ The agreement does not prohibit disclosure of the underlying facts of any alleged discriminatory or unfair employment practice;
☐ Disclosure of such facts does not constitute disparagement;
☐ If Company disparages Employee, Company may not enforce non-disparagement/non-disclosure provisions;
☐ Any liquidated damages are reasonable, proportionate, and not punitive.

EMPLOYEE: _________________________________ Date: [__/__/____]

COMPANY: _________________________________ Date: [__/__/____]

EXHIBITS

☐ Exhibit A: OWBPA Group Disclosures ☐ Exhibit B: Reference Letter ☐ Exhibit C: Payment Schedule ☐ Exhibit D: Restrictive Covenant Summary ☐ Exhibit E: POWR Act Addendum (above or separate)

Sources and References

• Colorado Anti-Discrimination Act, C.R.S. § 24-34-401 et seq.
• Colorado POWR Act, SB23-172, https://leg.colorado.gov/bills/sb23-172
• Colorado Wage Claim Act, C.R.S. § 8-4-104
• Colorado Non-Compete Statute, C.R.S. § 8-2-113, https://law.justia.com/codes/colorado/title-8/labor-i-department-of-labor-and-employment/labor-relations/article-2/part-1/section-8-2-113/
• Nieto v. Clark's Market, 2021 CO 48 (vacation payout)
• Littler, Colorado's POWR Act, https://www.littler.com/publication-press/publication/colorados-powr-act-significantly-expands-workplace-harassment-laws
• 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 Colorado before use.