SEPARATION AGREEMENT AND GENERAL RELEASE

(State-specific base: IL)

[// GUIDANCE: Use employer letterhead if desired. Confirm compliance with state wage payment, PTO payout, and any required language before issuing.]

1. Parties and Key Dates

• Employer: [Company legal name and entity type]; address: [address].
• Employee: [Employee legal name]; address: [address].
• Separation date: [date].
• Final compensation timing (820 ILCS 115/5): all final compensation is due at separation if possible, but no later than the next regularly scheduled payday; if Employee requests in writing that it be mailed, Employer will comply. Final wages/earned amounts are not conditioned on signing this Agreement (severance may be).
• Final compensation includes wages/salary, earned commissions, earned bonuses, and the monetary equivalent of earned vacation/earned holidays and any other compensation owed under an agreement (820 ILCS 115/2).

2. Consideration and Benefits

• Severance: [amount] payable [lump sum/installments] less required withholdings; conditioned on timely execution and non-revocation.
• COBRA/benefits: [duration and amount of employer contribution]; subject to plan terms.
• Outplacement or transition support: [if any].

3. Equity, Bonus, and Other Compensation

• Equity awards: state treatment of vested/unvested equity, exercise deadlines, and post-termination service rules.
• Bonus/commissions: state “earned” conditions per the written plan/offer; attach the plan. Include timing and any lawful adjustments.
• Vacation/PTO/holidays: pay out monetary equivalent of earned/accrued time per policy and Illinois law; confirm any pro-rata accrual calculation.
• Expense reimbursement: confirm all business expenses have been submitted; commit to pay in compliance with state law.

4. Release of Claims and Carve-Outs

• Employee releases Company and affiliates from all claims through the signing date arising from employment or separation.
• Carve-outs: enforcement of this Agreement; vested benefits; claims arising after signing; unemployment or workers compensation benefits; indemnification rights; rights that cannot be waived by law; right to file or cooperate with agencies (EEOC, NLRB, DOL, SEC, OSHA, state equivalents); whistleblower and protected disclosures; NLRA Section 7 rights for non-supervisory employees; Speak Out Act and any state Silenced No More style protections.
• Unknown claims: release covers known and unknown claims to the fullest extent permitted under Illinois law.

5. ADEA/OWBPA (if 40 or older)

• Consideration period: [21 or 45] days; revocation period: 7 days after signing.
• Written advice to consult independent counsel; employee acknowledges opportunity to do so.
• If part of group exit, attach required decisional-unit disclosures where applicable.

6. Confidentiality, Non-Disparagement, and Protected Disclosures

• Confidentiality limited to Agreement terms and underlying negotiations, subject to legal requirements and protected disclosures.
• Non-disparagement: mutual, time-limited, excludes truthful testimony, agency filings, and protected concerted activity.
• Protected disclosures: nothing restricts reporting suspected illegality, harassment, discrimination, retaliation, wages, or safety issues to government agencies or making disclosures protected by the Speak Out Act or Illinois law; preserves rights to report, participate/testify (including in arbitration), seek legal advice, and engage in concerted activity (Workplace Transparency Act amendments effective Jan. 1, 2026). If confidentiality is used for alleged unlawful employment practices, provide separate consideration and do not frame it as employee “preference” unless compliant.

7. Restrictive Covenants and No-Rehire (Optional)

• Confirm continuing obligations under existing NDAs, invention assignment, and any enforceable non-solicit/non-compete (must satisfy IFWA, 820 ILCS 90: earnings thresholds, 14-day review + attorney advisement, and category-based limits).
• No-rehire clause optional; include only if lawful in IL and consistent with public policy.

8. Return of Property and Information Security

• Employee confirms return of all devices, files, credentials, and confidential information; no copies retained; accounts access terminated except as required by law.
• No deductions from wages/final compensation except those required by law or with Employee’s express written authorization consistent with Illinois law.

9. Dispute Resolution

• Governing law: IL.
• Forum: [court location]; arbitration optional. If arbitration is selected, exclude claims that cannot be compelled to arbitration (for example, claims covered by the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act) and allow small-claims court access. Specify rules (AAA/JAMS), locale, and fee allocation. Jury waiver only if enforceable under IL law.

10. State-Specific Overlay Checklist (IL)

• ☑ Final pay timing: Next regular payday (at separation if possible); mail if requested (820 ILCS 115/5)
• ☑ PTO payout MANDATORY: Earned vacation/holidays = final compensation; must be paid out (820 ILCS 115/2)
• ☑ Wages not conditioned on release: Final compensation cannot be withheld for signing agreement
• ☑ Workplace Transparency Act (effective Jan 1, 2026): Preserve reporting/participation/concerted activity rights; separate consideration if confidentiality covers alleged unlawful practices
• ☑ Non-compete requirements (IFWA - 820 ILCS 90): Earnings thresholds, 14-day review + attorney advisement, category-based limits
• ☐ Deductions: Only as required by law or with express written authorization at time of deduction
• IFWA compliance for noncompete/nonsolicit (earnings thresholds, 14-day review + attorney advisement, category-based limits, pandemic/healthcare nuances as applicable).
• Translation/readability or notary/witness needs (if any) for IL use.

11. Signatures

Employer: ___________________________ Date: __________
Name/Title: __________________________

Employee: ___________________________ Date: __________

[Optional exhibits: OWBPA group disclosure; payment schedule; reference letter; restrictive covenant summary; any state-permitted unknown-claims waiver text.]