Severance Agreement - Montana

DISCLAIMER
This template is provided for general informational purposes only and does not constitute legal advice. No attorney–client relationship is created by your use of this document. Always consult a qualified attorney licensed in the applicable jurisdiction to review, customize, and approve this agreement before it is executed.

Severance and Mutual Release Agreement

(“Agreement”)

This Severance and Mutual Release Agreement (the “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between [EMPLOYER LEGAL NAME], a [STATE OF ORG] [ENTITY TYPE] with its principal place of business at [ADDRESS] (“Employer”), and [EMPLOYEE FULL NAME], residing at [ADDRESS] (“Employee,” and together with Employer, the “Parties” and each a “Party”).

TABLE OF CONTENTS

1. Recitals
2. Definitions
3. Separation of Employment & Consideration
4. Severance Benefits & Tax Matters
5. Release of Claims
6. ADEA‐Specific Waiver Requirements
7. Representations & Warranties
8. Covenants & Continuing Obligations
9. Risk Allocation & Limited Remedies
10. Dispute Resolution
11. General Provisions
12. Execution Block

1. RECITALS

A. Employee’s employment with Employer will terminate effective [TERMINATION DATE] (the “Separation Date”).
B. Employer desires to provide Employee with certain severance benefits in exchange for Employee’s promises, releases, and covenants contained in this Agreement.
C. If Employee is age 40 or older, the Parties intend the ADEA waiver to satisfy 29 U.S.C. § 626(f) and 29 C.F.R. §§ 1625.22-1625.23. The release also identifies lawfully waivable claims under current federal and Montana law.

NOW, THEREFORE, in consideration of the mutual promises and covenants herein, and intending to be legally bound, the Parties agree as follows:

2. DEFINITIONS

For purposes of this Agreement, the following capitalized terms have the meanings set forth below. Defined terms may be used in the singular or plural form, as the context requires.

“ADEA” means the federal Age Discrimination in Employment Act; its waiver requirements are addressed in 29 U.S.C. § 626(f).
“Agreement” has the meaning set forth in the preamble.
“Claims” means any and all claims, demands, causes of action, complaints, liabilities, damages, costs, attorneys’ fees, or other relief of any nature, whether known or unknown, suspected or unsuspected, fixed or contingent, that a Party may have.
“Confidential Information” means any proprietary or non-public information of Employer, whether in tangible or intangible form.
“Consideration Period” has the meaning given in Section 6.1.
“Employee Protected Rights” has the meaning given in Section 5.2.
“Release Scope” has the meaning given in Section 5.1.
“Severance Amount” means U.S. $[AMOUNT] as set forth in Section 4.1.

3. SEPARATION OF EMPLOYMENT & CONSIDERATION

3.1 Termination of Employment. Employee’s employment with Employer shall terminate on the Separation Date. As of the Separation Date, Employee shall have no further authority to act on Employer’s behalf and shall resign from all offices, directorships, and fiduciary positions with Employer and its affiliates, except as otherwise agreed in writing.

3.2 Final Wages and Benefits. If Employer separates Employee for cause or layoff, unpaid wages are due immediately unless a written personnel policy extends payment to the next regular payday for the pay period or 15 days after separation, whichever occurs first. For another separation, unpaid wages are due on that next regular payday or within 15 days, whichever occurs first. Mont. Code Ann. § 39-3-205(1)-(2). Employer will pay final wages on [PAY DATE] through [PAYMENT METHOD]. Vacation, PTO, bonuses, expenses, and plan benefits will be handled under the governing written terms and applicable law.

3.3 Additional Consideration. Subject to Employee’s timely execution and non-revocation of this Agreement, Employer will provide the severance benefits in Section 4. Only benefits in excess of wages, vested benefits, policy or plan benefits already due, and other amounts already owed constitute consideration for the release.

4. SEVERANCE BENEFITS & TAX MATTERS

4.1 Severance Payment. Employer shall pay Employee the Severance Amount, less applicable withholdings, in [lump-sum/installments] commencing on the first regular payroll date following the Effective Date and expiration of the Revocation Period (defined in Section 6.2).

4.2 COBRA/Health Benefits. Employer shall pay [NUMBER] months of COBRA premiums for continuation of Employee’s group health coverage, commencing the first day of the month following the Separation Date, provided Employee timely elects COBRA.

4.3 Outplacement Services. Employer shall provide outplacement assistance through [PROVIDER] for up to [NUMBER] months after the Separation Date.

4.4 Tax Withholding; Section 409A. Payments are subject to required withholding. The Parties intend the payments to comply with or be exempt from Internal Revenue Code § 409A. No tax representation or guarantee is made.

5. RELEASE OF CLAIMS

5.1 Scope of Release. Subject to Section 5.2, Employee, on behalf of Employee and Employee’s heirs, representatives, and assigns, irrevocably and unconditionally releases Employer and its parents, subsidiaries, affiliates, predecessors, successors, and all of their respective officers, directors, employees, and agents (collectively, the “Released Parties”) from any and all Claims (the “Release Scope”) based on acts occurring on or before the date Employee signs this Agreement, including but not limited to Claims under:
a. ADEA and OWBPA;
b. Title VII of the Civil Rights Act of 1964;
c. Americans with Disabilities Act;
d. Family and Medical Leave Act;
e. lawfully waivable claims under the Montana Wrongful Discharge from Employment Act, including Mont. Code Ann. § 39-2-904, subject to the Act's exemptions in § 39-2-912;
f. the Montana Human Rights Act, including Mont. Code Ann. § 49-2-303;
g. common-law tort or contract; and
h. any other lawfully waivable federal, state, or local law.

5.2 Excluded Rights. Nothing in this Agreement releases or limits:
a. Employee’s right to enforce this Agreement;
b. claims that cannot be waived as a matter of law;
c. wages, vested benefits, policy or plan benefits already due, or other amounts already owed;
d. Employee’s rights to unemployment or workers’ compensation;
e. claims arising after Employee signs; or
f. Employee’s right to file a charge, communicate with, or participate in an investigation or proceeding before the EEOC, NLRB, or another government agency (collectively, “Employee Protected Rights”). Nothing interferes with agency enforcement authority or waives a right that cannot lawfully be waived. Any effect of the release on individual monetary recovery is governed by applicable law.

5.3 Mutual Release. Employer releases Employee from any and all Claims Employer may have arising out of or relating to Employee’s employment or termination thereof, except for Claims arising from (a) criminal or fraudulent conduct, or (b) Employee’s breach of this Agreement.

6. ADEA-SPECIFIC WAIVER REQUIREMENTS

6.1 Applicability and Consideration Period. This Section applies if Employee is age 40 or older. Employee has at least twenty-one (21) days to consider this Agreement, or at least forty-five (45) days if the waiver is offered in connection with an exit incentive or other employment termination program offered to a group or class (the “Consideration Period”). Employee may sign sooner only by a knowing and voluntary choice not induced by fraud, misrepresentation, a threat to withdraw or alter the offer before the period ends, or better terms for early signature.

6.2 Revocation Period. Employee may revoke this Agreement within seven (7) days after signing by delivering written notice of revocation to [EMPLOYER CONTACT] at [ADDRESS/EMAIL] (“Revocation Period”). This Agreement becomes effective on the eighth (8th) day after Employee signs, provided no revocation has occurred.

6.3 Acknowledgments. By signing, Employee confirms that:
a. this Agreement is written in plain language;
b. Employee has read and understands it;
c. Employee is advised in writing to consult with an attorney before signing; and
d. Employee signs freely and without coercion.

6.4 Group Program Disclosure. If the 45-day period applies, Employer must provide, at the beginning of that period, a written disclosure calculated to be understood by the average eligible employee that identifies the decisional unit, eligibility factors and time limits, job titles and individual ages of all eligible or selected employees, and individual ages of employees in the same job classification or organizational unit who are not eligible or selected.

6.5 Final Offer; Future Claims; Waiver Challenge. Material changes to the final offer restart the applicable 21- or 45-day period unless the Parties agree otherwise. No right or Claim arising after Employee signs is waived. Nothing requires tender back of consideration or imposes a condition precedent, penalty, attorney-fee liability, damages, or another limitation that adversely affects Employee’s right to challenge the validity of the ADEA waiver.

7. REPRESENTATIONS & WARRANTIES

7.1 Mutual. Each Party represents that it has full authority to enter into and perform this Agreement and that the execution has been duly authorized.

7.2 Employee Specific. Employee represents that Employee has disclosed any known unpaid-compensation or benefit issue here: [________________________________]. This representation does not waive protected agency rights or delay payment of amounts already owed.

8. COVENANTS & CONTINUING OBLIGATIONS

8.1 Confidentiality of Employer Information. Employee shall protect legitimate trade secrets and non-public proprietary information. This Section does not restrict truthful testimony, protected communications, government reports, discussions of wages or working conditions protected by law, or other protected conduct. The Agreement itself is not designated categorically confidential.

8.2 Non-Disparagement. During [TIME PERIOD], neither Party shall knowingly make a false statement of fact intended to harm the other Party’s reputation. This Section does not restrict truthful statements, government communications, whistleblower reports, testimony, discussions of wages or working conditions protected by law, or other protected conduct.

8.3 Return of Property. Employee confirms that all Employer property has been returned or will be returned within [NUMBER] days of the Separation Date. Return of property does not delay wages, vested benefits, policy or plan benefits already due, or other amounts already owed.

8.4 Cooperation. Employee will reasonably cooperate with Employer in any investigations or litigation relating to events that occurred during employment, provided Employer reimburses reasonable out-of-pocket expenses.

9. RISK ALLOCATION & LIMITED REMEDIES

9.1 Lawful Remedies. A Party may pursue lawful contract remedies for a proven material breach. No remedy creates a release-challenge penalty, requires repayment merely for filing or participating in an agency matter, restricts protected communication, delays amounts already owed, or creates a prevailing-party fee shift.

9.2 No Employee Risk-Shifting. This Agreement does not impose employee indemnity, a liability cap, a force-majeure excuse for payment, a severance clawback, or a penalty for a good-faith challenge to the release.

10. DISPUTE RESOLUTION

10.1 Governing Law. This Agreement shall be governed by the laws of the State of Montana, together with applicable federal employment laws, without regard to conflict-of-laws principles.

10.2 Forum. An action concerning this Agreement may be filed in a Montana state or federal court with subject-matter and personal jurisdiction and proper venue.

10.3 Arbitration. No arbitration clause is included. If selected, use a separately reviewed addendum addressing formation, costs, discovery, remedies, and governing law.

10.4 Jury Trial. No predispute jury waiver is included in this template.

10.5 Fees. Each Party bears its own attorneys’ fees and costs except as required by applicable law or a court order.

11. GENERAL PROVISIONS

11.1 Amendment; Waiver. No amendment or waiver is effective unless in writing and signed by both Parties. A waiver on one occasion is not a waiver on any subsequent occasion.

11.2 Assignment. Employee may not assign any rights or delegate any obligations under this Agreement. Employer may assign to a successor in interest.

11.3 Successors & Assigns. This Agreement binds and benefits the Parties and their respective successors and permitted assigns.

11.4 Severability. If any provision is held invalid, the remaining provisions remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to achieve its original intent.

11.5 Integration. This Agreement constitutes the entire understanding between the Parties concerning its subject matter and supersedes all prior agreements, oral or written.

11.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts. The Parties may use an agreed electronic-signature method subject to applicable law and counsel review.

12. EXECUTION BLOCK

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

[OPTIONAL NOTARY BLOCK, if required by Employer policy or MT law.]

Sources and References

• 29 U.S.C. § 626(f)
• 29 C.F.R. § 1625.22
• 29 C.F.R. § 1625.23
• 29 U.S.C. § 157
• McLaren Macomb, 372 NLRB No. 58
• 42 U.S.C. § 2000e-2
• 42 U.S.C. § 12112
• 29 U.S.C. § 2615
• 29 U.S.C. § 1161
• 29 U.S.C. § 1165
• Mont. Code Ann. § 39-3-205
• Mont. Code Ann. § 39-2-904
• Mont. Code Ann. § 39-2-912
• Mont. Code Ann. § 49-2-303
• 26 U.S.C. § 409A