Severance Agreement

SEVERANCE AND MUTUAL RELEASE AGREEMENT

(California – Single Employee Termination)

TABLE OF CONTENTS

1. Document Header
2. Definitions

3. Operative Provisions
   3.1 Termination of Employment
   3.2 Severance Benefits
   3.3 Acknowledgment of Adequate Consideration
   3.4 Tax Matters
   3.5 Return of Company Property & Transition

4. Mutual Representations & Warranties

5. Covenants & Restrictions
   5.1 Confidentiality
   5.2 Nondisparagement
   5.3 No Post-Employment Restraint

6. Release and Waiver of Claims
   6.1 General Mutual Release
   6.2 OWBPA / ADEA Waiver Requirements
   6.3 California Civil Code § 1542 Waiver
   6.4 Carve-Outs (Non-Waivable Claims)
   6.5 No Indemnity, Clawback, or Liability Cap

7. Default & Remedies

8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

This Severance and Mutual Release Agreement (this “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between [FULL LEGAL NAME OF EMPLOYER], a [FORM OF ENTITY] organized under the laws of [STATE] (“Company”), and [EMPLOYEE LEGAL NAME] (“Employee,” and together with Company, the “Parties,” and each, a “Party”).

WHEREAS, Employee’s employment with Company will terminate effective [TERMINATION DATE] (the “Termination Date”); and
WHEREAS, Company desires to provide Employee with certain severance benefits in exchange for the releases, covenants, and agreements set forth herein;

NOW, THEREFORE, in consideration of the mutual promises herein and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree as follows.

2. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below. Capitalized terms not defined herein shall have their plain English meaning consistent with prevailing California employment law.

“Agreement” means this Severance and Mutual Release Agreement, including all exhibits and schedules.

“ADEA” means the federal Age Discrimination in Employment Act of 1967.

“ADEA Consideration Period” has the meaning provided in Section 6.2(b).

“Claims” means any and all actions, causes of action, charges, complaints, contracts, covenants, agreements, promises, debts, damages, judgments, demands, costs, losses, liabilities, and expenses of any kind or character, known or unknown, suspected or unsuspected, fixed or contingent.

“Confidential Information” has the meaning provided in Section 5.1.

“Release” means the release of Claims described in Section 6.1.

“Severance Benefits” has the meaning provided in Section 3.2(a).

“Revocation Period” means the seven (7) calendar-day period after Employee signs this Agreement during which Employee may revoke acceptance as provided in Section 6.2(c).

3. OPERATIVE PROVISIONS

3.1 Termination of Employment

(a) Employment Termination. Employee’s employment with Company shall terminate on the Termination Date.
(b) Final Wages & Accrued Benefits. If Company discharges Employee, earned and unpaid wages are due immediately under Cal. Lab. Code § 201. If Employee resigns, final wages are due under the timing rules in § 202. Vested vacation must be paid under § 227.3, and necessary business-expense reimbursements remain payable under § 2802. No severance payment is consideration for wages or reimbursements already due.
(c) No Additional Severance. Except as stated in this Agreement, Company promises no additional severance benefit. This sentence does not waive earned compensation, vested benefits, reimbursements, or another nonwaivable right.

3.2 Severance Benefits

(a) Severance Payment. Subject to Employee’s timely execution and non-revocation of this Agreement, Company shall pay Employee a lump sum of $[SEVERANCE AMOUNT] (the “Severance Benefits”) within [NUMBER] days after the Revocation Period expires.
(b) COBRA Subsidy. [OPTIONAL] Company shall pay [___]% of Employee’s COBRA premiums for [NUMBER] months following the Termination Date, subject to Employee’s timely election of COBRA continuation and applicable plan terms.
(c) Outplacement Services. [OPTIONAL] Company will provide outplacement assistance through [VENDOR] for [NUMBER] months.

3.3 Acknowledgment of Adequate Consideration

Employee acknowledges that the Severance Benefits constitute consideration to which Employee is not otherwise entitled absent execution of this Agreement.

3.4 Tax Matters

All payments under this Agreement are subject to required withholding. The payment schedule must be reviewed by benefits and tax counsel before use; this template makes no tax-compliance representation to Employee.

3.5 Return of Company Property & Transition

(a) Return of Property. No later than the Termination Date, Employee shall return to Company all Company property, including keys, devices, documents, and Confidential Information, whether in tangible or electronic form.
(b) Post-Separation Services. Any requested services after the Termination Date require a separate written scope and lawful compensation arrangement; the Severance Benefits do not purchase unrecorded or uncompensated work.

4. MUTUAL REPRESENTATIONS & WARRANTIES

4.1 Authority. Each Party represents that it has full power and authority to enter into this Agreement and that doing so will not violate any contractual or legal obligations.
4.2 No Reliance. Each Party acknowledges that it has not relied on any statement or representation not set forth in this Agreement.
4.3 Voluntary Execution. Each Party represents that it enters this Agreement voluntarily, without coercion, and after having had the opportunity to consult legal counsel.

5. COVENANTS & RESTRICTIONS

5.1 Confidentiality

(a) Definition. “Confidential Information” means all non-public business information of Company, including intellectual property, trade secrets, and proprietary data, whether disclosed before or after the Effective Date.
(b) Non-Disclosure. Employee shall not disclose Confidential Information except as required by law or with Company’s prior written consent.
(c) Exclusions. Nothing herein prohibits communications with government agencies, legally protected whistleblower activity, or other activity protected by applicable law.

(d) SB 331 (Silenced No More Act) Notice. Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.

5.2 Nondisparagement

Each Party agrees not to make any false, misleading, or disparaging statements about the other Party. This Section does not restrict the Parties from truthful statements required by law or legal process.

SB 331 (Silenced No More Act) Notice. Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.

5.3 No Post-Employment Restraint

This Agreement does not prohibit Employee from lawfully soliciting, recruiting, hiring, or accepting business from any customer, worker, or other person after employment. Nothing in this Section authorizes misuse of a trade secret or breach of a lawful confidentiality duty. No provision may be construed to impose a restraint void under California Business and Professions Code §§ 16600, 16600.1, or 16600.5.

6. RELEASE; WAIVER OF CLAIMS; INDEMNIFICATION

6.1 General Mutual Release

(a) Employee Release. Subject to Section 6.4, Employee releases Company and its affiliates, officers, directors, employees, and agents (collectively, “Company Released Parties”) from Claims based on acts occurring on or before the date Employee signs this Agreement. The release includes ADEA, Title VII, California Fair Employment and Housing Act, contract, tort, and other claims only to the extent lawfully waivable. It does not release wages that remain unpaid in violation of Cal. Lab. Code § 206.5.
(b) Company Release. Company releases Employee and Employee’s agents and heirs (collectively, “Employee Released Parties”) from Claims based on acts occurring on or before Company signs this Agreement, excluding any specifically identified claim listed here: [________________________________]. An undisclosed generic fraud or misconduct exception is not retained after execution.

6.2 OWBPA / ADEA Waiver Requirements

(a) Specific Reference. Employee understands that this Release includes a waiver of Claims under the ADEA, as amended by the OWBPA, 29 U.S.C. § 626(f).
(b) Consideration Period. If Employee is age 40 or older and this Agreement seeks an ADEA waiver, Employee receives at least twenty-one (21) calendar days to consider it. A group or class termination program requires at least forty-five (45) days plus the written decisional-unit, eligibility, time-limit, job-title, and age disclosures required by 29 U.S.C. § 626(f)(1)(H). Separately, every California separation agreement covered by Cal. Gov. Code § 12964.5 must advise the employee of the right to consult an attorney and provide at least five business days to do so. Employee may sign sooner only through a knowing and voluntary choice not induced by fraud, misrepresentation, a threatened withdrawal or change, or different terms for early signature.
(c) Revocation Right. Employee may revoke this Agreement within the Revocation Period by delivering written notice to [CONTACT NAME/TITLE] at [ADDRESS/EMAIL] no later than 11:59 p.m. Pacific Time on the seventh (7th) calendar day after signing. This Agreement shall not become effective until the Revocation Period expires without revocation.
(d) Consultation with Counsel. Employee is hereby advised in writing to consult with an attorney prior to executing this Agreement.
(e) No Future Claims. This Agreement does not waive any ADEA or other claim arising after Employee signs it.

6.3 California Civil Code § 1542 Waiver

Employee expressly waives the provisions of California Civil Code § 1542, which reads:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”

6.4 Carve-Outs (Non-Waivable Claims)

Nothing in this Agreement shall be construed to waive or limit:
(i) Claims arising after Employee signs this Agreement;
(ii) Claims for workers’ compensation, unemployment insurance, or state disability insurance;
(iii) Rights to vested benefits under any employee benefit plan governed by ERISA;
(iv) Rights to file, communicate with, testify, assist, or participate in a charge, investigation, hearing, or proceeding before the EEOC, Civil Rights Department (CRD), NLRB, Labor Commissioner, LWDA, or another government agency, and any relief the agency is legally authorized to pursue;
(v) PAGA claims, penalties, settlements, or State interests except to the extent a court-approved or otherwise lawful resolution expressly permits; and
(vi) Any other claim or remedy that applicable law does not permit the Parties to waive privately.

6.5 No Indemnity, Clawback, or Liability Cap

This Agreement does not impose employee indemnity, a release-challenge penalty, a severance clawback, or a liability cap. A good-faith challenge to the validity of the release does not forfeit consideration already paid, subject to the rules governing ADEA waivers in 29 C.F.R. § 1625.22.

7. DEFAULT & REMEDIES

7.1 Events of Default. A Party shall be in default if it breaches any material obligation under this Agreement and fails to cure within ten (10) days after written notice.
7.2 Remedies. A Party may seek lawful contract remedies for a proven material breach. No remedy restricts agency access, protected communications, wage rights, or a good-faith challenge to the release, and no prevailing-party fee shift is created by this template.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California and applicable federal law, without regard to conflict-of-laws principles.
8.2 Forum. Any action concerning this Agreement may be filed in a California state or federal court that has subject-matter and personal jurisdiction and proper venue.
8.3 Arbitration. No arbitration clause is included. If the Parties choose arbitration, use a separately reviewed addendum addressing formation, costs, discovery, remedies, and governing law.
8.4 Jury Trial. No predispute jury waiver is included in this template.

9. GENERAL PROVISIONS

9.1 Amendment; Waiver. This Agreement may be amended only by a written instrument signed by both Parties. No waiver shall be effective unless in writing and signed by the Party waiving.
9.2 Assignment. This Agreement is personal to Employee and may not be assigned. Company may assign this Agreement to any successor in interest.
9.3 Severability; Reformation. If any provision is held invalid, the remainder shall remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to be valid and enforceable.
9.4 Entire Agreement. This Agreement constitutes the entire understanding between the Parties and supersedes all prior agreements, whether written or oral, with respect to the subject matter hereof.
9.5 Counterparts; Electronic Signatures. The Parties may sign counterparts and may use electronic signatures when permitted by the transaction platform and applicable law.
9.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the dates set forth below.

Sources and References

• 29 U.S.C. § 626(f) — ADEA waiver requirements
• 29 C.F.R. § 1625.22 — ADEA waivers
• Cal. Lab. Code §§ 201–202 — final wages
• Cal. Lab. Code § 206.5 — wage-release restriction
• Cal. Lab. Code § 227.3 — vested vacation
• Cal. Lab. Code § 2802 — expense reimbursement
• Cal. Civ. Code § 1542 — unknown claims
• Cal. Bus. & Prof. Code §§ 16600–16600.5
• Cal. Code Civ. Proc. § 1001
• Cal. Gov. Code § 12964.5
• Cal. Lab. Code § 2699 — PAGA

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