Separation Agreement and General Release (Vermont)

SEPARATION AGREEMENT AND GENERAL RELEASE

State of Vermont

PRIVILEGED AND CONFIDENTIAL

IMPORTANT -- VERMONT LAW NOTES: Vermont requires final wages within 72 hours of discharge (21 V.S.A. § 342(c)). Vermont has no specific non-compete statute and applies common law reasonableness principles. The Vermont Fair Employment Practices Act (VFEPA) provides exceptionally broad protections, including sexual orientation, gender identity, place of birth, and ancestry among its protected classes. Vermont applies to all employers with one (1) or more employees for most VFEPA provisions.

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 [________________________________], Vermont [____]

(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 Vermont;

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 -- Vermont Requirements.

(a) Final Pay Timing (21 V.S.A. § 342(c)).

• Discharge/Involuntary Termination: Company shall pay all wages due within seventy-two (72) hours of the discharge.
• Voluntary Quit/Resignation: Company shall pay all wages due on the last regular payday of the employer, or, if there is no regular payday, on the following Friday.

(b) Wages Defined (21 V.S.A. § 342(a)). "Wages" include any compensation due to an employee by reason of employment, including salary, hourly pay, commissions, bonuses, and fringe benefits (if provided by agreement or policy).

(c) PTO/Vacation Payout. Vermont does not mandate vacation payout by statute. However, if Company policy or employment agreement provides for payout of accrued vacation upon separation, such amounts constitute wages and must be paid. Amount (if applicable): $[________________________________].

(d) Penalties (21 V.S.A. § 345). An employer who violates the wage payment statutes may be liable for the full amount of unpaid wages, plus double the amount of the wages owed as damages (treble total), costs, and reasonable attorneys' fees. The Vermont Department of Labor may also impose administrative penalties.

(e) Wage Deductions (21 V.S.A. § 342(b)). No deductions except those required by law, authorized by the employee in writing, or permitted by collective bargaining agreement.

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

ARTICLE 2: SEVERANCE CONSIDERATION

2.1 Severance Payment.

☐ Lump Sum: $[________________________________], less applicable withholdings.

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

2.2 Benefits Continuation.

☐ COBRA Subsidy: [____] months.
☐ Vermont Continuation Coverage: Vermont requires continuation of group health coverage for employers with 2+ employees, for up to 18 months (8 V.S.A. § 4090a).
☐ Lump Sum: $[________________________________].

2.3 Outplacement. [________________________________]

2.4 Other Benefits. [________________________________]

2.5 Tax Treatment. Subject to applicable withholdings.

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, Pregnant Workers Fairness Act (PWFA) (42 U.S.C. § 2000gg et seq.), FMLA, Equal Pay Act, GINA, USERRA, ERISA (excluding vested benefits), WARN Act, Section 1981, Sarbanes-Oxley, Dodd-Frank

(b) Vermont Fair Employment Practices Act (VFEPA) (21 V.S.A. § 495 et seq.):

• The VFEPA prohibits employment discrimination based on race, color, religion, national origin, sex (including sexual harassment, pregnancy, and gender identity), sexual orientation, ancestry, place of birth, age, disability, HIV status, and genetic information
• Vermont has among the broadest sets of protected classes in the nation
• Enforced by the Vermont Human Rights Commission (VHRC) and the Vermont Attorney General's Civil Rights Unit
• Applies to all employers with one (1) or more employees (for most provisions)
• Administrative complaints may be filed with the VHRC or Employee may file directly in Superior Court
• Statute of Limitations: One (1) year for filing with the VHRC; six (6) years for a civil action in court (general statute of limitations for statutory claims)
• Remedies: Back pay, front pay, compensatory damages, reinstatement, injunctive relief, punitive damages, and reasonable attorneys' fees
• No statutory cap on compensatory or punitive damages (unlike Title VII)
• 21 V.S.A. § 495(a)(8) -- Retaliation protections

(c) Other Vermont Statutes:

• Vermont Wage and Hour Laws (21 V.S.A. Chapter 5)
• Vermont Workers' Compensation Act (21 V.S.A. Chapter 9) (excluding existing claims)
• Vermont Parental and Family Leave Act (21 V.S.A. § 471 et seq.)
• Vermont Earned Sick Time Law (21 V.S.A. § 481 et seq.)
• Vermont Whistleblower Protections (21 V.S.A. § 507)
• Vermont Equal Pay Act (21 V.S.A. § 495(a)(7))
• Vermont Sexual Harassment statute (21 V.S.A. § 495h)

(d) Common Law Claims: Breach of contract, wrongful discharge in violation of public policy, tortious interference, defamation, fraud, intentional or negligent infliction of emotional distress, invasion of privacy, and all other Vermont 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, VHRC, Vermont Department of Labor, Vermont Attorney General's Office, 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 Vermont 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, VHRC, Vermont Department of Labor, AG's Office, 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 Vermont whistleblower protections (21 V.S.A. § 507).

7.4 Confidential Business Information. Per existing agreements and Vermont Uniform Trade Secrets Act (9 V.S.A. § 4601 et seq.).

ARTICLE 8: RESTRICTIVE COVENANTS

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

Vermont has no specific non-compete statute. Non-competes are evaluated under common law reasonableness principles:

• Reasonableness Test: A non-compete must be reasonable in (1) scope of restricted activities, (2) geographic area, and (3) duration, and must protect a legitimate business interest
• Legitimate Interests: Trade secrets, confidential information, and customer goodwill
• Consideration: Employment at the time of hiring generally provides sufficient consideration. Mid-employment non-competes may require additional consideration
• Public Policy: Vermont courts consider whether enforcement would unduly burden the employee's ability to earn a livelihood
• Judicial Modification: Vermont courts may have the ability to reform overbroad restrictions, though this area is not well-developed in Vermont case law
• Duration: Restrictions of 1-2 years are generally considered reasonable; longer periods face heightened scrutiny

☐ 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 property. 9.2 No copies retained. 9.3 Transition cooperation.

ARTICLE 10: DISPUTE RESOLUTION

10.1 Governing Law. Laws of Vermont.

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

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: VERMONT-SPECIFIC COMPLIANCE CHECKLIST

☐ Final wages paid within 72 hours of discharge / next regular payday for voluntary quit (21 V.S.A. § 342(c))
☐ Final wages NOT conditioned on execution of this Agreement
☐ PTO/vacation payout per Company policy
☐ Wage penalty exposure noted (treble damages: wages + double damages, 21 V.S.A. § 345)
☐ VFEPA claims enumerated (21 V.S.A. § 495 et seq.) -- applies to 1+ employees, broadest protected classes
☐ No statutory cap on compensatory/punitive damages under VFEPA
☐ Protected classes include sexual orientation, gender identity, HIV status, ancestry, place of birth
☐ Non-compete (if any) meets common law reasonableness standard
☐ Vermont Human Rights Commission filing rights preserved
☐ Vermont AG Civil Rights Unit filing 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

ARTICLE 13: SIGNATURES

PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, INCLUDING CLAIMS UNDER THE VERMONT FAIR EMPLOYMENT PRACTICES 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

• Vermont FEPA: 21 V.S.A. § 495 et seq.
• Vermont Final Pay: 21 V.S.A. § 342
• Vermont Wage Penalties: 21 V.S.A. § 345
• Vermont Human Rights Commission: VHRC
• Vermont AG Civil Rights Unit: Civil Rights
• 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. Vermont applies the VFEPA to employers with 1+ employees with no caps on damages. Verify current non-compete enforcement. Consult a qualified Vermont attorney before use.

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