Separation Agreement and General Release (Tennessee)

SEPARATION AGREEMENT AND GENERAL RELEASE

State of Tennessee

PRIVILEGED AND CONFIDENTIAL

IMPORTANT -- TENNESSEE LAW NOTES: Tennessee requires final pay on the next regular payday or within twenty-one (21) days of the demand for payment, whichever occurs last (T.C.A. § 50-2-103). Tennessee has no specific non-compete statute but enforces reasonable non-competes under common law. The Tennessee Human Rights Act (THRA) covers employers with eight (8) or more employees and prohibits discrimination on the basis of race, creed, color, religion, sex, age, and national origin.

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 [________________________________], Tennessee [____]

(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 Tennessee;

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

WHEREAS, Company desires to provide separation benefits beyond what Employee is otherwise entitled to receive;

WHEREAS, Employee has been advised to consult with an attorney;

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

ARTICLE 1: SEPARATION OF EMPLOYMENT

1.1 Separation Date. Employment terminates effective the Separation Date.

1.2 Last Day of Work. [__/__/____].

1.3 Final Wages -- Tennessee Requirements.

(a) Final Pay Timing (T.C.A. § 50-2-103). Company shall pay Employee all wages earned and unpaid either on the next regular payday following the date of dismissal or voluntary separation, or within twenty-one (21) days following the date of the Employee's demand for payment, whichever occurs last.

(b) Demand for Payment. Employee may make a written demand for payment of wages. If Employee makes such demand, Company must pay within twenty-one (21) days of that demand or the next regular payday, whichever comes later.

(c) Wages Defined (T.C.A. § 50-2-101). "Wages" include compensation owed to an employee by reason of employment, including all forms of compensation that are payable to the employee.

(d) PTO/Vacation Payout. Tennessee does not mandate payout of accrued PTO/vacation by statute. If Company policy or agreement provides for payout, such amounts may constitute wages. If policy provides: $[________________________________].

(e) Penalties (T.C.A. § 50-2-103(c)). If an employer fails to pay wages when due, the employer is liable for the unpaid wages plus reasonable attorneys' fees and costs. There is no statutory multiplier for damages, but courts may award attorneys' fees and litigation expenses.

1.4 Expense Reimbursement. Within [____] days of the Separation Date.

ARTICLE 2: SEVERANCE CONSIDERATION

2.1 Severance Payment.

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

☐ Installments: $[________________________________] per [____], for [____] months.

2.2 Benefits Continuation.

☐ COBRA Subsidy: [____] months.
☐ Tennessee Continuation Coverage: For employers with fewer than 20 employees, Tennessee requires continuation of group health coverage for up to 3 months (T.C.A. § 56-7-2312).
☐ Lump Sum: $[________________________________].

2.3 Outplacement. [________________________________]

2.4 Other Benefits. [________________________________]

2.5 Tax Treatment. Subject to applicable withholdings. (Note: Tennessee does not impose a state income tax on wages and salaries.)

2.6 Adequacy of Consideration. Exceeds amounts already owed.

ARTICLE 3: EQUITY, BONUS, AND OTHER COMPENSATION

3.1 Equity Awards. [________________________________]

3.2 Bonus/Commissions. [________________________________]

3.3 Section 409A. Compliance intended.

ARTICLE 4: GENERAL RELEASE OF CLAIMS

4.1 Employee Release. Employee hereby voluntarily, knowingly, and irrevocably releases and forever discharges the Released Parties from all claims, including but not limited to:

(a) Federal Statutes:

• Title VII, ADEA (subject to Article 6), ADA, FMLA, Equal Pay Act, GINA, USERRA, ERISA (excluding vested benefits), WARN Act, Section 1981, Sarbanes-Oxley, Dodd-Frank

(b) Tennessee Human Rights Act (THRA) (T.C.A. § 4-21-101 et seq.):

• The THRA prohibits employment discrimination based on race, creed, color, religion, sex, age, and national origin
• Enforced by the Tennessee Human Rights Commission (THRC)
• Applies to employers with eight (8) or more employees
• Administrative complaints must be filed with the THRC within one (1) year of the alleged discriminatory act (T.C.A. § 4-21-302)
• Civil actions may be filed in chancery or circuit court
• Remedies: Back pay, compensatory damages, reinstatement, injunctive relief, and reasonable attorneys' fees
• Caps on compensatory damages based on employer size (T.C.A. § 4-21-313): $25,000 (8-14 employees); $50,000 (15-100); $100,000 (101-200); $200,000 (201-500); $300,000 (500+)
• Disability discrimination is covered separately under the Tennessee Disability Act (T.C.A. § 8-50-103) for some public-sector aspects, and under the THRA (T.C.A. § 4-21-102) for private employers
• T.C.A. § 4-21-301 -- Retaliation protections

(c) Other Tennessee Statutes:

• Tennessee Wage Regulations Act (T.C.A. § 50-2-101 et seq.)
• Tennessee Workers' Compensation Act (T.C.A. § 50-6-101 et seq.) (excluding existing claims)
• Tennessee Equal Pay Act (T.C.A. § 50-2-202)
• Tennessee Public Protection Act (whistleblower) (T.C.A. § 50-1-304)
• Tennessee Pregnant Workers Fairness Act (T.C.A. § 4-21-408)
• Tennessee Healthy Workplace Act (T.C.A. § 50-1-501 et seq.)

(d) Common Law Claims: Breach of contract, wrongful discharge in violation of public policy, tortious interference, defamation, fraud, outrageous conduct (IIED), negligent infliction of emotional distress, invasion of privacy, and all other Tennessee common law claims.

4.2 Standard Carve-Outs. This Release does NOT waive or release:

(a) Rights to enforce this Agreement;
(b) Post-signing claims;
(c) Vested ERISA benefits;
(d) Unemployment insurance benefits;
(e) Workers' compensation benefits;
(f) Indemnification rights;
(g) Right to file or cooperate with the EEOC, NLRB, SEC, OSHA, THRC, Tennessee Department of Labor and Workforce Development, or any governmental agency;
(h) NLRA Section 7 rights;
(i) Speak Out Act protections;
(j) Non-waivable rights.

4.3 Unknown Claims. Release covers known and unknown claims to the fullest extent permitted by Tennessee law.

4.4 Company Release. Standard mutual release with exceptions.

ARTICLE 5: DEFEND TRADE SECRETS ACT -- WHISTLEBLOWER IMMUNITY NOTICE

Pursuant to 18 U.S.C. § 1833(b):

"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 is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order."

ARTICLE 6: OWBPA / ADEA COMPLIANCE (EMPLOYEES AGE 40 AND OLDER)

6.1 Knowing and Voluntary Waiver. Per OWBPA, 29 U.S.C. § 626(f).

6.2 Consideration Period.

☐ Individual (21 days).

☐ Group Exit (45 days). Decisional unit disclosure: Exhibit A.

6.3 Revocation Period. Seven (7) calendar days. Written revocation to [________________________________]. Effective Date: eighth day.

6.4 Advice of Counsel. Employee is advised in writing to consult with an attorney.

6.5 No Waiver of Future Claims.

6.6 Additional Consideration.

ARTICLE 7: CONFIDENTIALITY, NON-DISPARAGEMENT, AND PROTECTED DISCLOSURES

7.1 Confidentiality. Standard terms with carve-outs.

7.2 Non-Disparagement (McLaren Macomb-Compliant). Mutual; NLRA Section 7 carve-out per McLaren Macomb, 372 NLRB No. 58 (2023).

7.3 Protected Disclosures. Employee may:

(a) File with EEOC, NLRB, SEC, OSHA, THRC, TN Department of Labor, or any agency;
(b) Cooperate with investigations;
(c) Testify truthfully;
(d) Engage in NLRA Section 7 activity;
(e) Make Speak Out Act and DTSA-protected disclosures;
(f) Exercise Tennessee Public Protection Act rights (T.C.A. § 50-1-304).

7.4 Confidential Business Information. Per existing agreements and Tennessee Uniform Trade Secrets Act (T.C.A. § 47-25-1701 et seq.).

ARTICLE 8: RESTRICTIVE COVENANTS

8.1 Tennessee Non-Compete Law (Common Law Reasonableness).

Tennessee has no specific non-compete statute but enforces reasonable non-competes under common law:

• Reasonableness Standard: Non-competes must be reasonable in (1) time, (2) geographic scope, and (3) scope of restricted activities, and must be supported by adequate consideration
• Protectable Interests: Trade secrets, confidential information, customer relationships, and specialized training
• Consideration: Employment at-will generally provides sufficient consideration if the non-compete is entered into at the beginning of employment. For mid-employment non-competes, continued employment may be sufficient consideration in Tennessee (unlike some states requiring new consideration)
• Blue-Pencil: Tennessee courts have the ability to modify and enforce overbroad restrictions rather than voiding the entire covenant (Vantage Technology, LLC v. Cross, 17 S.W.3d 218 (Tenn. Ct. App. 1999))
• Typical Duration: 1-2 years is generally considered reasonable; restrictions beyond 2 years face increased scrutiny
• Healthcare Professionals: T.C.A. § 63-1-148 imposes limitations on physician non-competes, requiring buy-out provisions and allowing continued treatment of patients in acute care

☐ No Non-Compete.
☐ Existing Non-Compete. Duration: [____] months. Geographic scope: [________________________________]. Activity: [________________________________].

8.2 Non-Solicitation. [________________________________]

8.3 Existing NDAs/Invention Assignment. Survive per their terms.

8.4 No-Rehire. ☐ Applicable. ☐ Not applicable.

ARTICLE 9: RETURN OF COMPANY PROPERTY

9.1 Within [____] days, return all Company property. 9.2 No copies retained. 9.3 Transition cooperation.

ARTICLE 10: DISPUTE RESOLUTION

10.1 Governing Law. Laws of Tennessee.

10.2 Forum. State or federal courts in [________________________________] County, Tennessee.

10.3 Arbitration. ☐ Not applicable. ☐ Applicable (with standard exclusions).

10.4 Jury Waiver. ☐ Mutual waiver. ☐ Not applicable.

ARTICLE 11: GENERAL PROVISIONS

11.1 Entire Agreement. 11.2 Amendments. 11.3 Severability. 11.4 Waiver. 11.5 Counterparts. 11.6 Successors and Assigns. 11.7 No Admission. 11.8 Section 409A.

ARTICLE 12: TENNESSEE-SPECIFIC COMPLIANCE CHECKLIST

☐ Final wages paid on next regular payday or within 21 days of demand (T.C.A. § 50-2-103)
☐ Final wages NOT conditioned on execution of this Agreement
☐ PTO/vacation payout per Company policy
☐ THRA claims enumerated (T.C.A. § 4-21-101 et seq.) -- applies to 8+ employees, 1-year filing deadline
☐ THRA compensatory damages caps noted (based on employer size)
☐ Non-compete (if any) meets Tennessee reasonableness standard
☐ Physician non-compete limitations addressed if applicable (T.C.A. § 63-1-148)
☐ No state income tax on wages and salaries
☐ Tennessee Public Protection Act whistleblower rights preserved
☐ OWBPA consideration period provided (21 or 45 days)
☐ 7-day ADEA revocation period provided
☐ Employee advised to consult an attorney
☐ DTSA whistleblower immunity notice included (18 U.S.C. § 1833(b))
☐ McLaren Macomb NLRA Section 7 carve-out included
☐ Speak Out Act protections preserved
☐ THRC filing rights preserved

ARTICLE 13: SIGNATURES

PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, INCLUDING CLAIMS UNDER THE TENNESSEE HUMAN RIGHTS ACT.

EMPLOYER: Signature: _____________________________ Date: [__/__/____]

Name: [________________________________] Title: [________________________________]

EMPLOYEE: Signature: _____________________________ Date: [__/__/____]

Name: [________________________________]

EXHIBITS:

☐ Exhibit A -- OWBPA Decisional Unit Disclosure (if applicable)
☐ Exhibit B -- Severance Payment Schedule
☐ Exhibit C -- Non-Compete Terms (if applicable)
☐ Exhibit D -- Reference Letter

Sources and References

• Tennessee Human Rights Act: T.C.A. § 4-21-101 et seq.
• Tennessee Final Pay: T.C.A. § 50-2-103
• Tennessee Human Rights Commission: THRC
• Tennessee Public Protection Act: T.C.A. § 50-1-304
• Physician Non-Compete: T.C.A. § 63-1-148
• OWBPA: 29 U.S.C. § 626(f)
• DTSA: 18 U.S.C. § 1833(b)
• McLaren Macomb: 372 NLRB No. 58 (2023)

This template is provided for informational purposes only. Tennessee has no state income tax on wages. Non-competes are evaluated under common law reasonableness. Consult a qualified Tennessee attorney before use.

Generated for use on the ezel.ai platform.