Severance Agreement

[ˈsevərəns əˈɡriːmənt]

A severance agreement is a type of contract between the employee and the employer which documents the responsibilities and the rights of both in an instance where termination occurs.

This contract gives a specification of any benefits and pay package, including conditions which will be withheld or provided under the severance package; the main things included in this agreement are: a non-compete clause which forbids the employee from working with the organization’s competitors for a specific length of time, any benefits (such as healthcare) and the period of time they will be provided and finally the amount of any severance pay in lieu of the contracted notice period.

Part of speech:
Use in a sentence:
Having a severance agreement is essential to have.
Severance Agreement