Severance Agreement - New Mexico

SEVERANCE AND RELEASE AGREEMENT

(New Mexico – Federal & State Employment Law Compliant)

TABLE OF CONTENTS

I. Document Header
II. Definitions
III. Operative Provisions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block

I. DOCUMENT HEADER

1. Parties.
   This Severance and Release Agreement (the “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between [EMPLOYER LEGAL NAME], a [STATE OF INCORP.] [entity type] with its principal place of business at [ADDRESS] (“Company”), and [EMPLOYEE NAME], an individual residing in [COUNTY, NM] (“Employee”). Company and Employee are each a “Party” and collectively the “Parties.”

2. Recitals.
   A. Employee’s employment with Company will terminate effective [TERMINATION DATE] (“Separation Date”).
   B. Company desires to provide Employee with severance benefits in exchange for Employee’s promises, including a release of claims, as set forth herein.
   C. Employee desires to accept such benefits and enter into this Agreement subject to the terms and conditions below.

3. Consideration.
   The mutual covenants herein and payment of the Severance Benefits (defined below) constitute good and sufficient consideration.

II. DEFINITIONS

For purposes of this Agreement, capitalized terms have the meanings set forth below:

“Agreement” – This Severance and Release Agreement, including all exhibits and schedules.
“COBRA” – Continuation coverage pursuant to 29 U.S.C. § 1161 et seq.
“Confidential Information” – All non-public business, technical, or proprietary information of Company, whether oral, written, electronic, or graphic.
“Consideration Period” – Twenty-one (21) calendar days commencing on the date Employee receives this Agreement.
“Company Group” – Company, its parents, subsidiaries, affiliates, predecessors, successors, and each of their respective past and present directors, officers, employees, agents, insurers, and benefit plans.
“Releasees” – The Company Group.
“Revocation Period” – Seven (7) calendar days following Employee’s execution of this Agreement.
“Severance Amount” – $[AMOUNT], representing [NUMBER] weeks of Employee’s final base salary, less applicable withholdings.
“Severance Benefits” – The Severance Amount plus any additional benefits listed in Section III.2.

III. OPERATIVE PROVISIONS

1. Separation of Employment.
   Employment terminates on the Separation Date. If Company discharges Employee, fixed and definite wages demanded by Employee are due within five days; task-, piece-, commission-, or other calculation-based wages are due within ten days. NMSA 1978, § 50-4-4. If Employee resigns, wages are due on the next regular payday under NMSA 1978, § 50-4-5. PTO and other benefits will be handled under the governing written terms and applicable law. Final Compensation is due regardless of whether Employee signs this Agreement.

2. Severance Benefits.
   Subject to Employee’s timely execution and non-revocation of this Agreement:

2.1 Payment. Company shall pay the Severance Amount in a lump sum within ten (10) business days after the later of (i) the Separation Date or (ii) expiration of the Revocation Period.

2.2 COBRA Subsidy [optional]. Company will pay the employer-portion of COBRA premiums for [NUMBER] months following the Separation Date, provided Employee validly elects COBRA.

2.3 Outplacement [optional]. Company will reimburse up to $[CAP] for outplacement services incurred within six (6) months post-Separation Date.

3. Conditions Precedent.
   Delivery, execution, and non-revocation of this Agreement are conditions precedent only to the Severance Benefits, not to Final Compensation or other amounts already owed.

4. Taxes.
   All payments shall be subject to applicable federal, state, and local withholding. Employee is solely responsible for any additional tax liability.

IV. REPRESENTATIONS & WARRANTIES

1. Mutual Authority. Each Party has full legal power and authority to enter into and perform this Agreement.

2. Employee Representations.
   a. Voluntary Execution; Legal Counsel. Employee has read this Agreement, understands it, and has been advised in writing to consult legal counsel.
   b. No Assignment of Claims. Employee has not assigned or transferred any claim released herein.
   c. Age Disclosure. Employee’s date of birth is [DOB] (age 40+ if applicable).

3. Compensation Disclosure. Employee has identified any known unpaid-compensation or benefit issue here: [________________________________]. This disclosure does not waive protected agency rights or delay payment of amounts already owed.

4. Survival. The representations and warranties in this Article IV survive execution and delivery of this Agreement.

V. COVENANTS & RESTRICTIONS

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

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.

3. Cooperation. Upon reasonable notice, Employee shall cooperate with Company in any pending or future investigations or proceedings related to Employee’s employment.

4. Return of Property. On or before the Separation Date, Employee shall return all Company property, including documents and electronic files.

5. Post-Termination Restrictive Covenants. No noncompetition or non-solicitation covenant is included. Any separate covenant must be reviewed under current New Mexico law for the employee’s occupation and the covenant’s scope.

VI. DEFAULT & REMEDIES

1. Events of Default.
   a. Employee breaches Articles V or VII;
   b. Either Party materially breaches Article IV representations.

2. Notice & Cure. The non-breaching Party must provide written notice specifying the default. The breaching Party has ten (10) business days to cure, if curable.

3. 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, delays amounts already owed, or creates a prevailing-party fee shift.

VII. RISK ALLOCATION

1. Mutual Release & Waiver.

1.1 Employee Release. For good and valuable consideration, Employee irrevocably releases Releasees from any and all claims, causes of action, or liabilities, whether known or unknown, based on acts occurring on or before the date Employee signs this Agreement, including but not limited to:
i. Federal, state, or local discrimination, retaliation, wage, or leave statutes;
ii. Contract, tort, or common-law claims; and
iii. Claims under the Age Discrimination in Employment Act (“ADEA”), as amended by the OWBPA, 29 U.S.C. § 626(f)(1).

1.2 Company Release. Company, on behalf of the Company Group, releases Employee from any claims arising out of Employee’s employment, excluding (i) fraud or criminal conduct, and (ii) claims that cannot legally be waived.

1.3 Scope Limitations. Nothing herein waives (a) future claims arising after Employee signs this Agreement, (b) wages, vested benefits, unemployment, workers’ compensation, or rights that cannot be waived by law, or (c) Employee’s ability to file or cooperate in an administrative charge. Any effect of the release on individual monetary recovery is governed by applicable law.

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.

VIII. DISPUTE RESOLUTION

1. Governing Law. This Agreement is governed by the laws of the State of New Mexico and applicable U.S. federal law, without regard to conflict-of-law principles.

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

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

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

IX. GENERAL PROVISIONS

1. Amendment; Waiver. Any amendment or waiver must be in a writing signed by both Parties. A waiver of any breach is not a waiver of subsequent breaches.

2. Assignment. Employee may not assign this Agreement. Company may assign to a successor by merger, consolidation, or asset sale.

3. Successors & Assigns. This Agreement binds and inures to the benefit of the Parties and their respective successors and permitted assigns.

4. Severability; Reformation. If any provision is held invalid, the remainder shall be enforced. A court may modify unenforceable provisions to the minimum extent necessary.

5. Entire Agreement. This Agreement constitutes the entire understanding between the Parties and supersedes all prior agreements concerning the subject matter.

6. Counterparts; Electronic Signatures. This Agreement may be executed in counterparts (including PDF or electronic signature), each of which is deemed an original and together one instrument.

X. EXECUTION BLOCK

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

[OPTIONAL NOTARY/ WITNESS BLOCKS PER NM REQUIREMENTS]

ADEA COMPLIANCE CERTIFICATIONS

Employee acknowledges and certifies that:

1. This Agreement is written in a manner calculated to be understood;
2. Employee is advised to consult an attorney prior to signing;
3. Employee is given the Consideration Period to review;
4. Employee may revoke within the Revocation Period by written notice to [CONTACT]; and
5. The Severance Benefits constitute consideration in addition to anything of value to which Employee is already entitled.

If the waiver is offered in connection with an exit incentive or other employment termination program offered to a group or class, Employee receives at least forty-five (45) days to consider it and Company must provide at the beginning of that period a written disclosure identifying the decisional unit, eligibility factors and time limits, job titles and individual ages of eligible or selected employees, and individual ages of employees in the same job classification or organizational unit who were not eligible or selected.

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.

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
• 29 U.S.C. § 1053
• 29 U.S.C. § 1161
• 29 U.S.C. § 2615
• 42 U.S.C. § 2000e-2
• 42 U.S.C. § 12112
• New Mexico Department of Workforce Solutions, Labor Law FAQs
• New Mexico Human Rights Information
• New Mexico Human Rights Act resources