SEVERANCE AND RELEASE AGREEMENT
(Colorado – Single Employee Termination)
[// GUIDANCE: This template is designed for a single-employee separation. If part of a “group termination program,” replace the 21-day consideration period with 45 days and append the OWBPA “decisional unit” disclosures required by 29 U.S.C. § 626(f)(1)(H).]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
- Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
1.1 Parties
This Severance and Release Agreement (this “Agreement”) is entered into by and between [EMPLOYER LEGAL NAME], a [STATE] [corporation/limited liability company] with its principal place of business at [ADDRESS] (“Employer”), and [EMPLOYEE FULL LEGAL NAME], residing at [ADDRESS] (“Employee,” and together with Employer, the “Parties,” and each, a “Party”).
1.2 Effective Date
The “Effective Date” shall be the eighth (8th) calendar day after Employee signs this Agreement, provided Employee has not revoked it pursuant to Section 3.7.
1.3 Recitals
A. Employer and Employee have mutually agreed to terminate Employee’s employment effective [TERMINATION DATE] (“Separation Date”).
B. Employer wishes to provide Employee with severance benefits conditioned upon Employee’s execution of, and compliance with, this Agreement.
C. Employee desires to accept such severance benefits and to release Employer from certain claims, all as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
2. DEFINITIONS
The following capitalized terms shall have the meanings set forth below. Terms used in the singular include the plural and vice-versa.
“Affiliate” – Any entity controlling, controlled by, or under common control with a Party, directly or indirectly, through one or more intermediaries.
“COBRA” – Continuation coverage under 29 U.S.C. § 1161 et seq., as amended.
“Confidential Information” – All non-public information relating to Employer or its Affiliates, including trade secrets, business plans, financial data, customer lists, and proprietary know-how, whether in oral, written, electronic, or any other form.
“Covered Claims” – All claims released by Employee under Section 3.4 and by Employer under Section 3.5, subject to the exclusions stated therein.
“Severance Benefits” – The consideration described in Section 3.1.
3. OPERATIVE PROVISIONS
3.1 Severance Benefits
Subject to Employee’s timely execution, non-revocation, and continued compliance with this Agreement:
a. Cash Severance: Employer shall pay Employee a lump-sum of $[SEVERANCE AMOUNT] (the “Severance Payment”), less applicable withholdings, within ten (10) business days after the Effective Date.
b. COBRA Subsidy: Employer shall pay [SPECIFY % OR DOLLAR AMOUNT] of Employee’s monthly COBRA premium for [NUMBER] months following the Separation Date, or until Employee becomes eligible for other employer-provided group health coverage, whichever occurs first.
[// GUIDANCE: Replace/omit if Employer elects a different COBRA structure or none.]
c. Accrued Benefits: Employer shall pay all wages, accrued but unused vacation, and reimbursable business expenses through the Separation Date in accordance with Colorado wage payment laws.
3.2 Consideration & Acknowledgments
Employee acknowledges that the Severance Benefits exceed any compensation or benefits to which Employee would otherwise be entitled absent this Agreement.
3.3 Consultation Period – OWBPA Compliance
Employee is advised to consult with an attorney prior to executing this Agreement. Employee has twenty-one (21) calendar days to review and consider this Agreement before signing.
[// GUIDANCE: For group programs, replace “twenty-one (21)” with “forty-five (45).”]
3.4 Employee Release of Claims
a. General Release. Employee, on behalf of Employee and Employee’s heirs, assigns, and representatives, irrevocably and unconditionally releases Employer, its Affiliates, and all of their respective officers, directors, employees, insurers, and agents (the “Released Parties”) from any and all claims, causes of action, charges, complaints, liabilities, or obligations of any kind, whether known or unknown, suspected or unsuspected, arising at any time prior to the Effective Date, including but not limited to:
i. claims arising out of or relating to Employee’s employment or the termination thereof;
ii. claims under federal, state, or local constitutions, statutes, ordinances, or regulations, including the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. (“ADEA”); Title VII of the Civil Rights Act of 1964; the Americans with Disabilities Act; the Family and Medical Leave Act; the Colorado Anti-Discrimination Act; and the Colorado Wage Claim Act;
iii. claims in contract or tort; and
iv. claims for attorneys’ fees and costs.
b. OWBPA Specific Waiver. Pursuant to 29 U.S.C. § 626(f):
• Employee’s waiver of ADEA claims is knowing and voluntary;
• Employee is advised in writing to consult with an attorney before signing;
• Employee has at least 21 days to consider this Agreement; and
• Employee may revoke this Agreement within seven (7) days after signing, in which case the Agreement shall be null and void.
c. Excluded Claims. Notwithstanding the foregoing, Employee does not waive:
i. claims arising after the Effective Date;
ii. rights to enforce this Agreement;
iii. rights to unemployment or workers’ compensation;
iv. vested benefits under Employer’s qualified retirement plans;
v. rights to file or participate in an administrative proceeding with the EEOC, DOL, NLRB, SEC, or any similar agency (but Employee waives the right to personal monetary relief to the extent permitted by law).
3.5 Employer Mutual Release
Employer, on behalf of itself and its Affiliates, releases Employee from any and all claims arising out of Employee’s employment known to Employer as of the Effective Date, excluding (i) claims based on fraud, embezzlement, or willful misconduct, and (ii) claims to enforce this Agreement.
3.6 Return of Property
No later than the Separation Date, Employee shall return to Employer all property, documents, and electronically stored information belonging to Employer, whether created by Employee or others.
3.7 Revocation Right
Employee may revoke this Agreement within seven (7) calendar days after signing by delivering written notice of revocation to [EMPLOYER CONTACT NAME & ADDRESS]. If Employee revokes, this Agreement shall be void ab initio, and Employer shall have no obligation to provide Severance Benefits.
4. REPRESENTATIONS & WARRANTIES
4.1 Mutual Authority. Each Party represents that it has full authority to enter into and perform this Agreement.
4.2 No Pending Claims. Employee represents that Employee has not filed any lawsuit or arbitration against Employer as of the Effective Date, other than as disclosed in writing.
4.3 Tax Advice Disclaimer. Employee acknowledges that Employer has not provided tax advice and that Employee has been advised to consult independent tax counsel regarding the consequences of this Agreement.
4.4 Survival. The representations and warranties in this Article 4 shall survive the Effective Date for the applicable statute-of-limitations period.
5. COVENANTS & RESTRICTIONS
5.1 Confidentiality of Employer Information. Employee shall maintain the confidentiality of Employer’s Confidential Information and shall not disclose such information except as compelled by law or with Employer’s prior written consent.
5.2 Non-Disparagement. Employee shall not make any statement intended to disparage Employer or its management. Employer shall instruct its C-level executives not to disparage Employee.
[// GUIDANCE: Consider adding liquidated damages or carve-outs for truthful testimony.]
5.3 Employee Cooperation. Upon reasonable notice, Employee shall cooperate with Employer in any matter arising from events that occurred during Employee’s employment, including litigation or regulatory inquiries, provided Employer reimburses reasonable out-of-pocket expenses.
5.4 Protected Rights. Nothing in this Agreement prohibits Employee from (a) reporting possible violations of law to any governmental agency or entity, (b) making other disclosures protected under whistleblower provisions of federal or state law, or (c) discussing wages or workplace concerns as permitted by Colo. Rev. Stat. § 8-5-101 et seq.
6. DEFAULT & REMEDIES
6.1 Events of Default
a. Employee Breach: Any material breach of Article 5.
b. Employer Breach: Failure to pay Severance Benefits within the timeframes set forth in Section 3.1.
6.2 Notice & Cure
The non-breaching Party shall provide written notice and a ten (10) business-day cure period (five (5) business days for payment defaults).
6.3 Remedies
a. If Employee is in default and fails to cure, Employer may (i) cease any unpaid Severance Benefits; (ii) seek equitable relief limited to enforcement of Article 5 (subject to Section 8.3); and (iii) recover damages up to, but not exceeding, the Severance Payment actually made.
b. If Employer is in default and fails to cure, Employee may pursue payment of overdue Severance Benefits plus interest at the statutory rate and reasonable attorneys’ fees.
7. RISK ALLOCATION
7.1 Mutual Release. The releases in Sections 3.4 and 3.5 allocate the risk of past liabilities between the Parties.
7.2 Limitation of Liability. Except for willful misconduct or obligations under Article 5, each Party’s aggregate liability under this Agreement shall not exceed the Severance Payment.
7.3 No Indemnification. The mutual releases render separate indemnification provisions unnecessary; accordingly, no Party indemnifies the other beyond the scope of the releases granted.
7.4 Force Majeure. Neither Party shall be liable for delay or failure in performance caused by events beyond its reasonable control, provided that the affected Party promptly notifies the other and uses commercially reasonable efforts to mitigate.
8. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement and any dispute arising hereunder shall be governed by the laws of the State of Colorado and applicable federal law, without regard to conflicts-of-law principles.
8.2 Forum Selection. Subject to Section 8.3, the Parties consent to the exclusive jurisdiction of the state or federal courts located in Denver, Colorado, and waive any objection to venue therein.
8.3 Optional Arbitration.
[ARBITRATION SELECTION BOX – INITIAL APPLICABLE OPTION]
☐ Arbitration Elected ☐ Arbitration Declined
If elected, any dispute shall be resolved by binding arbitration administered by [AAA/JAMS] in Denver, Colorado, under its employment rules. Judgment on the award may be entered in any court of competent jurisdiction. Equitable relief to enforce Article 5 may be sought from any such court pending arbitration.
8.4 Jury Trial Waiver.
[// GUIDANCE: Colorado generally enforces contractual jury waivers when knowing and voluntary.]
☐ Jury Waiver Included ☐ Jury Waiver Omitted
If included, each Party irrevocably waives the right to a jury trial in any action arising out of this Agreement.
8.5 Injunctive Relief Limitation. Equitable relief shall be limited to enforcing confidentiality, non-disparagement, or return-of-property obligations and shall not extend to prohibiting Employee’s post-employment competitive activities unless separately agreed in a valid restrictive-covenant agreement compliant with Colo. Rev. Stat. § 8-2-113.
9. GENERAL PROVISIONS
9.1 Entire Agreement. This Agreement constitutes the entire understanding between the Parties and supersedes all prior agreements, whether written or oral, concerning the subject matter hereof.
9.2 Amendment & Waiver. Any amendment must be in a writing signed by both Parties. No waiver shall be effective unless in writing and signed by the waiving Party.
9.3 Assignment. This Agreement is personal to Employee and may not be assigned by Employee. Employer may assign to any successor by merger, consolidation, or sale of substantially all assets, provided the assignee assumes Employer’s obligations.
9.4 Severability & Reformation. If any provision is found unenforceable, it shall be modified to the minimum extent necessary to render it enforceable, and the remainder shall remain in full force and effect.
9.5 Successors & Assigns. This Agreement shall bind and inure to the benefit of the Parties and their respective successors and permitted assigns.
9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together constitute one instrument. Signatures delivered via facsimile, PDF, or electronic signature platform (e.g., DocuSign) shall be deemed original signatures.
9.7 Headings. Section headings are for convenience only and shall not affect interpretation.
9.8 Construction. The Parties acknowledge that this Agreement was jointly drafted and agree that no presumption against the drafter shall apply.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Severance and Release Agreement as of the dates set forth below.
| EMPLOYER: | EMPLOYEE: |
| [EMPLOYER LEGAL NAME] | [EMPLOYEE NAME] |
| By: ____ | Signature: ____ |
| Name: ________ | Date: ________ |
| Title: _______ | |
| Date: ________ |
[OPTIONAL NOTARIZATION – remove if not required]
State of __ )
County of __ )
Subscribed and sworn before me this ___ day of _, 20_, by ________.
Notary Public: ____
My Commission Expires: _______
[// GUIDANCE:
1. Attach OWBPA “decisional unit” disclosure if a reduction-in-force.
2. Verify COBRA subsidy does not trigger nondiscrimination penalties under IRC § 105(h).
3. Confirm that any separate non-compete complies with Colo. Rev. Stat. § 8-2-113 (2022 amendments).]