SEVERANCE AND MUTUAL RELEASE AGREEMENT
[// GUIDANCE: Title drafted for maximum enforceability. Adjust as needed.]
TABLE OF CONTENTS
- Document Header............................................................2
- Definitions................................................................3
- Operative Provisions.......................................................5
- Representations & Warranties...............................................7
- Covenants & Restrictions...................................................8
- Default & Remedies.........................................................9
- Risk Allocation...........................................................10
- Dispute Resolution........................................................11
- General Provisions........................................................13
- Execution Block..........................................................15
Internal cross-references update automatically in most modern word processors; confirm after final edits.
1. DOCUMENT HEADER
1.1 Parties. This Severance and Mutual Release Agreement (this “Agreement”) is entered into by and between [EMPLOYER LEGAL NAME], a [STATE OF INCORPORATION] [corporation/LLC/etc.] (“Employer”), and [EMPLOYEE NAME] (“Employee,” and together with Employer, the “Parties”).
1.2 Effective Date. This Agreement becomes effective on the eighth (8th) calendar day after Employee signs it, provided Employee does not timely revoke acceptance pursuant to Section 3.5 (the “Effective Date”).
1.3 Recitals.
a. Employee’s employment with Employer will terminate effective [TERMINATION DATE] (“Separation Date”);
b. Employer desires to provide Employee certain severance benefits in exchange for the releases, covenants, and agreements herein; and
c. The Parties intend for this Agreement to satisfy the “knowing and voluntary” waiver requirements of the Older Workers Benefit Protection Act, 29 U.S.C. § 626(f) (“OWBPA”), and all other applicable federal and Rhode Island laws.
[// GUIDANCE: RI has no independent severance-specific statute; compliance centers on federal requirements and general contract law.]
2. DEFINITIONS
For purposes of this Agreement, capitalized terms shall have the meanings set forth below.
“Additional Benefits” – The benefits, if any, described in Section 3.2(b).
“ADEA” – The Age Discrimination in Employment Act of 1967, as amended, including OWBPA.
“COBRA” – The Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
“Confidential Information” – All non-public information concerning Employer’s business, customers, trade secrets, pricing, and personnel, whether in written, electronic, or oral form.
“Consideration Period” – The period during which Employee may review and consider this Agreement before signing:
(i) twenty-one (21) days for an individual termination; or
(ii) forty-five (45) days for a group or program termination, as defined by 29 U.S.C. § 626(f)(1)(F).
[// GUIDANCE: Keep only the applicable bracketed language.]
“Protected Rights” – Any right that cannot legally be waived, including the right to: file a charge with the EEOC or RICHR, seek unemployment or workers’ compensation, or participate in a government investigation.
“Revocation Period” – The seven (7) calendar-day period following Employee’s execution of this Agreement during which Employee may revoke acceptance under Section 3.5.
“Severance Payment” – The cash severance described in Section 3.2(a).
“Severance Period” – [NUMBER] weeks/months immediately following the Separation Date.
“State Courts” – The courts of the State of Rhode Island sitting in [COUNTY].
“Federal Court” – The United States District Court for the District of Rhode Island.
3. OPERATIVE PROVISIONS
3.1 Termination of Employment. Employee’s employment ends on the Separation Date. Employer shall pay all earned wages and accrued but unused vacation in accordance with the Rhode Island Payment of Wages Act on or before the next regular pay date.
3.2 Consideration. In consideration of Employee’s promises herein—and provided Employee (i) timely executes this Agreement, (ii) does not revoke it, and (iii) complies with all post-employment obligations—Employer shall provide:
(a) Severance Payment. A lump-sum payment of [$AMOUNT], less applicable withholdings, payable within ten (10) business days after the Effective Date.
(b) Additional Benefits.
• COBRA Premium Subsidy: Employer will pay [all/___%] of Employee’s COBRA premiums during the Severance Period or until Employee obtains other coverage, whichever occurs first.
• Outplacement Services: [DESCRIPTION].
3.3 No Other Compensation. Except as expressly provided in this Agreement or as required by law, Employee will not receive any other wages, bonuses, equity acceleration, or benefits after the Separation Date.
3.4 Mutual Release of Claims.
(a) Employee Release. Subject to Protected Rights, Employee irrevocably releases Employer and its affiliates from all claims, known or unknown, arising on or before the Effective Date, including but not limited to:
• federal, state, and local employment discrimination laws (including ADEA, OWBPA, Title VII, ADA, FMLA);
• wage-and-hour laws;
• common-law claims (tort or contract); and
• any claim for attorneys’ fees or costs.
(b) Employer Release. Employer releases Employee from any and all claims arising out of Employee’s employment or termination thereof, excluding: (i) claims based on fraud, embezzlement, or intentional misconduct; and (ii) claims arising after the Effective Date.
(c) Non-Waivable Rights. Nothing in this Section 3.4 limits the Protected Rights.
3.5 ADEA/OWBPA Compliance.
(i) Employee is advised to consult an attorney before signing.
(ii) Employee has the applicable Consideration Period to review this Agreement.
(iii) Employee may revoke acceptance within the Revocation Period by delivering written notice to [EMPLOYER CONTACT] at the address in Section 8.4.
(iv) This Agreement specifically references rights under the ADEA, and Employee’s waiver is knowing and voluntary within the meaning of 29 U.S.C. § 626(f).
3.6 Conditions Precedent. Employer’s obligations are conditioned on (a) Employee’s timely execution, (b) lapse of the Revocation Period without revocation, and (c) return of Employer property per Section 5.2.
4. REPRESENTATIONS & WARRANTIES
4.1 Mutual Authority. Each Party represents it has full authority to enter into and perform this Agreement.
4.2 Employee Representations. Employee represents that:
(a) Employee has reported all hours worked and received all compensation due through the Separation Date;
(b) Employee has not filed any claim released herein, except as disclosed in [Disclosure Schedule A];
(c) Employee is not aware of any unreported workplace injury.
4.3 Survival. The representations and warranties in this Section survive the Effective Date.
5. COVENANTS & RESTRICTIONS
5.1 Confidential Information. Employee shall not disclose Confidential Information, except as permitted by law or with Employer’s prior written consent. This covenant is perpetual.
5.2 Return of Property. On or before the Effective Date, Employee shall return all Employer property, including electronic files, and certify deletion of Company data from personal devices.
5.3 Non-Disparagement. Neither Party will make statements intended to harm the other’s reputation; provided, truthful testimony under subpoena is permitted.
5.4 Cooperation. Employee will reasonably cooperate with Employer in any investigations or litigation relating to matters that occurred during employment.
[// GUIDANCE: Insert non-competition or non-solicitation covenants only after confirming compliance with R.I. Gen. Laws § 28-59-1 et seq.]
6. DEFAULT & REMEDIES
6.1 Events of Default. A “Default” occurs if a Party materially breaches this Agreement and fails to cure within ten (10) days after written notice.
6.2 Remedies.
(a) Monetary Damages capped per Section 7.2.
(b) Limited Injunctive Relief. The Parties acknowledge that a breach of Section 5.1 may cause irreparable harm. A court of competent jurisdiction may issue narrowly tailored injunctive relief to enforce that Section.
6.3 Attorneys’ Fees. In any action to enforce this Agreement, the prevailing Party shall be entitled to reasonable attorneys’ fees and costs.
7. RISK ALLOCATION
7.1 Indemnification by Employee. Employee shall indemnify Employer against losses arising from Employee’s breach of Sections 5.1–5.4 or undisclosed fraud.
7.2 Limitation of Liability. Employer’s aggregate liability arising out of this Agreement shall not exceed the Severance Payment actually paid, except for: (i) obligations under Section 3.2; and (ii) liabilities that cannot be limited by law.
7.3 Force Majeure. A Party is excused from performance if rendered impossible by events beyond its reasonable control, provided it gives prompt notice and resumes performance when feasible.
8. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement is governed by the laws of the State of Rhode Island and applicable federal employment law, without regard to conflict-of-laws principles.
8.2 Forum Selection. The Parties irrevocably submit to the exclusive jurisdiction of the State Courts and, where federal jurisdiction exists, the Federal Court.
8.3 Arbitration. [OPTIONAL] The Parties may elect, by initialing below, to submit all disputes (except injunctive relief under Section 6.2(b)) to binding arbitration under the JAMS Employment Rules in Providence, Rhode Island.
Employer Initials: __ Employee Initials: ____
8.4 Notices. All notices under this Agreement must be in writing and delivered by hand, overnight courier, or certified mail to the addresses below (or as later changed by notice).
• If to Employer: [ADDRESS / EMAIL]
• If to Employee: [ADDRESS]
8.5 Jury Trial Waiver. [OPTIONAL] IF NOT ARBITRATED, EACH PARTY KNOWINGLY WAIVES ANY RIGHT TO A JURY TRIAL.
[// GUIDANCE: Jury waivers are enforceable under RI law when knowing and voluntary but should be highlighted.]
9. GENERAL PROVISIONS
9.1 Amendment; Waiver. Any amendment or waiver must be in a writing signed by both Parties. No waiver constitutes a continuing waiver.
9.2 Assignment. Neither Party may assign this Agreement without the other’s prior written consent, except Employer may assign to a successor in interest.
9.3 Successors and Assigns. This Agreement binds and benefits the Parties and their respective successors and permitted assigns.
9.4 Severability; Reformation. If any provision is held invalid, the remaining provisions remain enforceable. A court may modify an unenforceable provision to reflect the Parties’ intent.
9.5 Entire Agreement. This Agreement constitutes the entire agreement between the Parties regarding the subject matter and supersedes all prior understandings.
9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original. Electronic signatures are binding.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates written below.
| FOR EMPLOYER | FOR EMPLOYEE |
|---|---|
| [EMPLOYER LEGAL NAME] | [EMPLOYEE NAME] |
| By: _______ | _______ |
| Name: [AUTHORIZED SIGNATORY] | |
| Title: [TITLE] | |
| Date: ____ | Date: ____ |
[// GUIDANCE: Notarization is not required in RI for severance agreements, but attach a jurat if your internal policy prefers.]
END OF DOCUMENT