Chipman, Mazzucco, Land & Pennarola, LLC

A separation agreement could benefit employees and employers

As a business owner, you value your employees. You know that your business wouldn't run smoothly without them. You take your hiring process very seriously. You work hard to find the right candidates. Your business has a lucrative interview process. It is your goal that your employees feel like a team. You want them to work together to achieve goals.

You also know that losing employees can be hard. A great employee is truly an asset. Deciding to terminate an employee can be tough. You never want to have to be the bearer of bad news. If someone has been with the company for awhile, and involved in different aspects, they may have an intimate knowledge of your business. If you are letting them go, they may be upset their service is ending.

This, among other reasons, is why you will want to have a good separation agreement in place.

What should you consider including in your agreement?

  • Confidentiality agreement. This should include trade secret and proprietary inventions.
  • Non-disparagement agreement. This is to keep the employee from spreading negative information about your company and damaging the company's reputation.
  • A release claim. This is to protect your company from legal claims.
  • Any Severance package details. This will lay out financial terms to the employee. It may include a payout, wages due or accrued vacation.
  • Tax, insurance, and payment delivery. This section will cover any tax deductions and payment policies. This is where the employee will see if insurance will continued to be paid by you, the employer. This should be detailed and structured. It should clearly state compensation, and when and how it will be paid.
  • Non- compete clause. This is to help keep the employee from getting a job with your competitor.
  • Re-hiring policy. If you may consider the employee in the future, you will want to lay out any terms or stipulations.
  • Company property return. If the employee has any property of the company, this will clearly outline how it should be returned and any penalty for not returning it.
  • Terms of separation agreement. This section will clearly list the termination date and reason for employment termination.

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Chipman, Mazzucco, Land & Pennarola, LLC
44 Old Ridgebury Road
Suite 320
Danbury, CT 06810

Phone: 203-501-1712
Fax: 203-790-5954
Fax: 203-744-5371
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