confidentiality-severance-agreement

# Confidentiality and Severance Agreement

Drafts a complete termination settlement agreement securing confidentiality, claim release, and post-employment conduct obligations with enforceability across U.S. jurisdictions.

## Prerequisites

Collect before drafting. If any item is missing, pause and ask — do not assume or fill gaps.

1. **Employee details** — full legal name, position, tenure, age, start/separation dates, work location, domicile state
2. **Compensation inputs** — salary, bonus formula, PTO/leave balance, equity treatment, benefits continuation, prior unpaid compensation disputes
3. **Governing documents** — handbook, offer letter, prior non-compete/confidentiality/IP agreements, equity/benefit plans, company termination policies
4. **Legal constraints** — employment jurisdiction(s), state non-compete/non-solicit rules, wage payment statutes, arbitration enforceability, non-waivable statutory claims
5. **Process details** — signatory authority, execution method, consideration amount, OWBPA revocation workflow (if age 40+)

## Quick Start

Draft sections in this fixed order:

| # | Section | Key deliverables |
|---|---------|-----------------|
| 1 | Parties and dates | Legal names, addresses, termination date, effective date, execution date |
| 2 | Recitals | Neutral background, consideration framing, counsel-notice language, no-fault framing |
| 3 | Severance mechanics | Amounts, schedule, tax/withholding, benefit continuation, property return |
| 4 | Release of claims | Broad waiver + carve-outs + ADEA/OWBPA flow + protected-disclosure savings |
| 5 | Confidentiality | Definition, survival, return/destruction, statutory exceptions, DTSA notice |
| 6 | Non-disparagement | Mutual scope with protected-activity carve-outs |
| 7 | Restrictive covenants | Non-compete/non-solicit only if jurisdiction and role justify; reformation + severability |
| 8 | Dispute resolution | Governing law, arbitration/forum, equitable relief carve-out, fee allocation |
| 9 | Acknowledgments | Voluntary execution, legal/tax advisories, integration, notices, signatures |

## Required Intake Fields

- Employer legal name, entity type, state of organization, principal address
- Covered entities/affiliates scope
- Employee legal name, home address, title
- Termination date (last day worked)
- Offer date and acceptance deadline (track OWBPA timing separately for age 40+)
- Governing state law and arbitration seat
- Whether group termination/incentive program applies

## Pre-Draft Compliance Checklist

- [ ] Employee age 40+ — start OWBPA clock
- [ ] All consideration items lawful and payable
- [ ] Flag non-waivable rights (wage claims, workers' comp, unemployment)
- [ ] Restrictive covenant scope permitted in applicable state
- [ ] Statutory notices positioned with prominence (OWBPA, DTSA, unknown-claims waiver)
- [ ] No self-created admission-of-liability language

## Clause Requirements

### Severance

- Explicit gross amount, payment schedule, payroll mechanics, tax withholding
- Non-payment on breach only where law permits
- Optional: PTO conversion, bonus proration, COBRA stipend

### Release

- Cover all claims linked to employment/termination: discrimination, wage/hour, retaliation, contract, tort, privacy
- Name corporate affiliates, officers, directors, agents as released parties
- Include known + unknown claims; savings clauses for non-waivable rights, whistleblower channels, agency participation
- Optional: ERISA vesting clarifications, fraud carve-through

### OWBPA Flow (age 40+)

- 21-day consideration minimum (45 days for group/incentive separations)
- 7-day post-signature revocation period
- Attorney-consultation acknowledgment
- Effective date conditioned on revocation period expiry

### Confidentiality

- Broad definition with list-based examples
- Return, deletion, certification, forensics access protocol
- Exceptions: publicly available, pre-existing, independently developed, legally compelled
- DTSA immunity notice language [VERIFY]

### Non-Disparagement

- Mutual covenant; carve-outs for truthful testimony, legal rights, whistleblowing, protected concerted activity, lawful subpoena compliance

### Restrictive Covenants

Include only if supported by role and jurisdiction:
- Minimum necessary duration, geography, and activity scope
- Blue-pencil/reformation + severability defaults
- Separate consideration if required by state law [VERIFY]

### Dispute Resolution

- Governing law tied to substantial employment relationship
- Binding arbitration with fee allocation; injunctive relief carve-out for confidentiality/non-compete breaches
- Venue/forum aligned with jurisdictional fairness doctrines
- Optional: class/collective waiver (screen for enforceability)

### Execution and Final Controls

- Separate employee/employer signature lines with date confirmation
- Return method and revocation address/proof requirements
- Non-admission of liability clause
- No-waiver-from-non-enforcement provision
- Surviving agreements preserved unless expressly superseded

## Placeholder Map

Use these placeholders for variable terms:

| Placeholder | Values |
|-------------|--------|
| Employee Name | Full legal name |
| Separation Date | Last day of employment |
| OWBPA-Eligible | Yes / No |
| Severance Amount | Dollar amount |
| Payment Method | Lump sum / Payroll installments |
| Non-Compete Scope | Duration / Geography / Activities |
| Non-Solicit Scope | Duration / Protected customer definition |
| Arbitration Forum | Forum name and venue |
| Revocation Deadline | Date (if applicable) |

## Jurisdiction Controls

- Apply OWBPA timing only for U.S. federal age-discrimination claims; verify state supplements
- Validate non-compete enforceability against local anti-restriction statutes and reasonableness tests
- Mark all non-waivable items and public-policy exceptions for selected jurisdictions
- Include Cal. Civ. Code § 1542 waiver where applicable; add equivalent-state language [VERIFY]
- Include DTSA immunity notice exactly as required [VERIFY]

## Guidelines

**Do:**
- Use balanced, enforceable (not coercive) language
- Clearly separate consideration, release, and restrictive obligations
- Include explicit legal-counsel advisory acknowledgments
- Maintain consistent defined terms and cross-references

**Do not:**
- Add nationwide restraints without factual support
- Draft language implying admission of liability
- Omit revocation mechanics for age-40+ employees
- Skip statute-specific non-waivable carve-outs

**Compliance:**
- Validate amounts and timing under wage-payment rules and discrimination statutes
- Reconcile every clause with actual documents and facts before finalization
- Insert `[VERIFY]` markers where statutory citations or thresholds are state-specific and unconfirmed

## Troubleshooting

**Missing employee age information:** OWBPA compliance cannot be determined. Pause and request age or date of birth before drafting the release section.

**Non-compete clause in a ban state (e.g., California, Minnesota, Oklahoma):** Remove the non-compete section entirely. Non-solicit may still be permitted — verify under applicable state law [VERIFY].

**Group termination but only 21-day consideration period used:** OWBPA requires 45 days for group/incentive program separations. Correct the consideration period and add the required decisional-unit disclosure.

**No separate consideration for restrictive covenants:** Some states require independent consideration beyond continued employment. Verify state law and add a separate consideration clause if needed [VERIFY].

**Unknown-claims waiver without § 1542 language in California:** The release may be unenforceable for unknown claims. Add Cal. Civ. Code § 1542 waiver language for any California-connected employee [VERIFY].

---