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Separation & Release Agreement
A severance-for-release agreement that trades a defined severance payment for a general release of claims, with the ADEA/OWBPA machinery for employees 40+ and 2026-current disclosure and carve-out language.
What is a Separation & Release Agreement?
A Separation & Release Agreement is a severance-for-release agreement that trades a defined severance payment for a general release of claims, with the ADEA/OWBPA machinery for employees 40+ and 2026-current disclosure and carve-out language.
Built for any employer offering severance in exchange for a release when an employee departs through a layoff, a mutual separation, or a negotiated exit.
Separation & Release Agreement template, current for 2026
OWBPA compliance for employees 40+ (21-day consideration / 7-day revocation, or 45 days + the informational disclosure for a group program) with knowing-and-voluntary framing. The carve-outs required after the Speak Out Act and state laws are built in, so no release or NDA bars reporting to agencies, testifying, or discussing sexual-harassment/assault claims, and nothing imposes confidentiality over unlawful acts. The document also carries a §1542-style broad release with statutory-immunity preservation, treatment of unvested equity and COBRA, return-of-property and mutual, carve-out-protected non-disparagement, a state-specific final-pay-timing note, and a no-admission-of-liability clause.
How HDAi does this differently
Unlike a static form, HDAi runs a guided interview and assembles your Separation & Release Agreement as you answer. When you want it finished, a licensed Hart David Carson attorney reviews it and tailors it to your facts before you sign. The interview and the first draft are automated. The judgment belongs to an attorney.
What you’ll be asked
A short interview in plain language that asks only what this document needs.
- Which U.S. state's law governs this agreement? Sets governing law, venue, and which state-specific release, wage, and (for 40+) notice rules apply. Enter California to trigger the verbatim Civil Code 1542 recital.
- Who is the employer (Company)? The releasing employer and payor of severance; its exact legal name and entity type control the release and signature block.
- Who is the departing employee? The individual giving the release; identity and address anchor the release and notice provisions.
- What was the employee's job title or position? Identifies the role being separated and frames the recitals.
- When did the employee's employment begin? Establishes tenure; may inform severance formulas and OWBPA disclosures.
- What is the employee's last day of employment (Separation Date)? The termination date fixes benefit run-out, final pay, and the point from which post-employment obligations run.
- How is the employment ending? Frames the recitals and, for group layoffs of employees 40+, triggers the extended 45-day OWBPA period and disclosure exhibit.
- Is the employee 40 years of age or older? If yes, the federal OWBPA/ADEA machinery applies: consideration period, 7-day revocation, and advice-of-counsel language.
- How long does the employee have to consider and sign? OWBPA requires at least 21 days for an individual and at least 45 days for a group program. Choose based on the separation type.
- Is the Company (or its parent) publicly traded? If yes, the 409A clause adds the mandatory six-month payment delay for specified employees on a separation from service.
- Describe the basis or formula for the severance amount (optional). Optional plain-language basis for the severance figure (for example, weeks of base salary), stated for clarity; leave blank to state only the gross amount.
- What is the total gross severance amount? The core consideration exchanged for the release; stated gross, before taxes and withholdings.
- How is the severance paid? Determines the payment mechanics section and any installment schedule.
- If installments, over what period / schedule? Defines the salary-continuation schedule and its start.
- How many days after the agreement becomes effective is (the first) payment made? Sets the payment trigger tied to effectiveness/revocation expiry.
- Include a prorated bonus for the year of separation? Adds a clause paying a pro rata portion of an annual or performance bonus for the year in which the Separation Date falls.
- Describe the prorated bonus (amount or how it is calculated) and when it is paid. For example, a fixed gross amount, or a pro rata share of the target bonus through the Separation Date, and the payment date.
- How is the employee's outstanding equity (options, RSUs, or other awards) treated? Adds a dedicated Equity Treatment section addressing vesting cutoff, any acceleration, post-termination exercise windows, and the controlling plan documents.
- Describe the outstanding awards and any acceleration or extended exercise window. Identify the awards (type, grant date, shares, vested vs. unvested, exercise price), any vesting acceleration granted, and any extension of the post-termination exercise period. Extending an incentive stock option's exercise window can convert it to a nonqualified option.
- Is a COBRA / health-continuation subsidy included? Adds a benefits-continuation subsidy clause and its duration.
- For how many months is COBRA subsidized? Duration of the employer-paid COBRA premium subsidy.
- Include a Medicare Secondary Payer (MSP) / Medicare-interest representation? Adds a representation that the Employee is not a Medicare beneficiary or, if applicable, addresses any Medicare conditional-payment or set-aside interests. Useful where the settlement could implicate injury or medical claims.
- Are outplacement or transition services provided? Adds an optional transition-services benefit.
- Is accrued but unused PTO/vacation being paid out separately? Clarifies that final wages and accrued PTO are paid whether or not the employee signs, as many states require.
- By when must the employee return Company property? Sets the property-return deadline after the Separation Date. Leave blank to require return by the Separation Date.
- Does the employee have surviving confidentiality/IP obligations to reaffirm? Reaffirms continuing confidentiality and assignment-of-inventions duties from prior agreements.
- Keep the financial terms of this Agreement confidential? Adds a mutual confidentiality clause covering the amount and terms of the settlement, with carve-outs for advisors, tax authorities, legal process, and non-waivable rights (including the sexual-harassment/assault carve-out).
- Are there prior non-compete / non-solicit covenants to reaffirm? Reaffirms existing restrictive covenants (subject to state enforceability limits) without creating new ones.
- Include a mutual non-disparagement clause? Adds non-disparagement, drafted to preserve protected/whistleblower rights and the sexual-harassment/assault carve-out.
- Include a no-rehire (no future employment) provision? Adds a provision that the Employee will not seek and need not be considered for future employment with the Company. Some states restrict no-rehire terms, especially where a claim involves harassment; keep this off where prohibited.
- How will references be handled? Sets the Company's reference practice for prospective employers.
- Require a second signature reaffirming the release on the Separation Date? For agreements signed before the last day, a reaffirmation extends the release to claims arising through the actual Separation Date.
- Resolve disputes by binding arbitration? Chooses arbitration vs. court; carve-outs for injunctive relief and non-waivable claims are always preserved.
- If courts, what county/venue governs? Sets exclusive venue for disputes if arbitration is not selected.
- What is the date the agreement is presented/dated? The presentation date from which the consideration period runs.
Frequently asked
About the Separation & Release Agreement and how HDAi works.
What is a Separation & Release Agreement? +
A Separation & Release Agreement is a severance-for-release agreement that trades a defined severance payment for a general release of claims, with the ADEA/OWBPA machinery for employees 40+ and 2026-current disclosure and carve-out language. Any employer offering severance in exchange for a release uses it when an employee departs, in a layoff, a mutual separation, or a negotiated exit.
Is HDAi's Separation & Release Agreement legally binding? +
The Separation & Release Agreement HDAi generates is a professionally drafted document that becomes binding once it is completed, reviewed, and properly signed. If you want a licensed Hart David Carson attorney to finish it, book a planning call. The firm's flat-fee packages, the Illinois Family Plan and Company Launch, cover the most common needs; for any other draft, an Illinois attorney will tell you on the call what finishing it would involve.
Do I need a lawyer to use this Separation & Release Agreement? +
You can generate and download the Separation & Release Agreement in minutes, free of charge. A licensed Hart David Carson attorney can then review it and tailor it to your facts before you sign, which is the part no template can do.
What makes this Separation & Release Agreement current for 2026? +
OWBPA compliance for employees 40+ (21-day consideration / 7-day revocation, or 45 days + the informational disclosure for a group program) with knowing-and-voluntary framing. The carve-outs required after the Speak Out Act and state laws are built in, so no release or NDA bars reporting to agencies, testifying, or discussing sexual-harassment/assault claims, and nothing imposes confidentiality over unlawful acts. The document also carries a §1542-style broad release with statutory-immunity preservation, treatment of unvested equity and COBRA, return-of-property and mutual, carve-out-protected non-disparagement, a state-specific final-pay-timing note, and a no-admission-of-liability clause.
How long does the Separation & Release Agreement take? +
Estimated time about 18 min (35 questions), depending on how much you already know. The document assembles as you answer. Export it as PDF or Word, or send it to a Hart David Carson attorney for review.
Does this Separation & Release Agreement work in my state? +
HDAi's interview is state-aware. If you ask an attorney to finish the draft, a licensed Hart David Carson attorney confirms it against your state's requirements before you rely on it. Validity and required formalities vary by state.
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