Severance agreement & release
A severance agreement with a release of claims, jurisdiction-aware compliance with ESA / OWBPA timing, and clear consideration above statutory minimums.
Severance Agreement & Release
Effective
This Agreement is between (the "Company") and (the "Employee").
1. Termination of employment
The Employee's last day of employment is after years of service.
2. Statutory minimum
The Company will pay the Employee's statutory minimum entitlements () regardless of whether this Agreement is signed. These statutory amounts are paid separately and are not consideration for the release.
3. Enhanced package
Subject to the Employee signing and not revoking this Agreement, the Company will provide a total enhanced package of , in addition to the statutory amounts.
4. Benefits
5. Transition support
6. Consideration period & legal advice
You have 21 days to consider this Agreement (45 days if this offer is part of a group reduction in force). After signing, you have 7 days to revoke your acceptance, during which time the Agreement is not effective. These rights are required by the Older Workers Benefit Protection Act for employees age 40 and older — do not sign before reviewing this Agreement with independent counsel of your choice.
Page 1 of 3
7. Release of claims
In consideration of the enhanced package described above, you (the "Releasor") release and discharge the Company, its affiliates, officers, directors, employees, and agents (collectively, the "Releasees") from any and all claims, demands, causes of action, and liabilities arising out of or related to your employment with the Company or its termination, whether known or unknown, except: (a) any rights to vested benefits under qualified retirement or savings plans; (b) any claims that cannot be released as a matter of law; and (c) any claim to enforce this Agreement itself.
8. Surviving obligations
The Employee's obligations of confidentiality, intellectual-property assignment, and non-solicitation under any agreements signed during employment continue to apply. The Employee will return all Company property by the last day of employment.
9. Non-disparagement
Each party agrees not to make disparaging statements, in any forum (including social media), about the other party. Nothing in this clause prevents either party from making truthful statements in legal proceedings, to a regulator, or as required by law.
10. Acceptance
If this Agreement is acceptable, please sign and return it by . After this date, the enhanced package described in section 3 will not be available — though the Company will, of course, still pay the statutory minimum amounts identified in section 2.
Page 2 of 3
Made with WalnutsHR Paper · Reviewed for United States (general) · April 2026
Page 3 of 3
No compliance hints for this jurisdiction yet — your document looks good for the basics. Have a lawyer review before sending anything consequential.
About this template
A severance agreement exchanges enhanced compensation for a release of claims. Done correctly it gives both sides certainty; done badly — by encroaching on statutory minimums, by being signed under pressure, by being too broad — the release can be set aside and the company ends up paying twice.
When to use it
- You're terminating without cause and offering more than the statutory minimum.
- You want a binding release in exchange for the enhancement.
- The employee is age 40+ in the US (OWBPA timing rules apply automatically).
What to include
- Clear statement of statutory minimums, paid regardless of signing.
- Distinct, additional consideration for the release.
- Consideration period (14 days minimum in Canada; 21 / 45 days in the US for OWBPA).
- 7-day revocation period after signing in the US.
- Carve-outs for unwaivable claims (vested benefits, certain human-rights claims).
- Surviving obligations and a non-disparagement clause.
Frequently asked questions
Can I require the employee to sign before paying the statutory minimum?
No. Statutory minimums are payable regardless and cannot be made contingent on signing a release. The release applies only to the enhanced amount above the statutory floor.
What's a reasonable enhancement above the ESA minimum?
Typical Canadian common-law severance is 1 month per year of service for senior or long-tenured employees, plus weight for age, role specialization, and economic conditions. The Bardal factors are the standard framework. For shorter service or lower seniority, the multiplier is smaller.
Do non-disparagement clauses survive judicial scrutiny?
Reasonable mutual non-disparagement clauses are enforceable. Overly broad ones — preventing truthful statements in regulatory proceedings, in court, or to government authorities — are not. The carve-out in this template addresses the common defects.
Legal disclaimer. Severance releases are heavily litigated. Common pitfalls: encroaching on the ESA minimum (Waksdale invalidates the entire termination provision in Ontario), insufficient consideration, no opportunity for legal advice, failing OWBPA timing, releasing future claims (which you generally can't do for human-rights claims). Always have an employment lawyer in the relevant jurisdiction review the specific package before sending.
Related templates
Termination letter — without cause
A jurisdiction-aware without-cause termination letter that meets ESA / labour-standards minimums and preserves the employee's common-law rights.
OpenEmployment offer letter
A jurisdiction-aware full-time employment offer letter. Fillable, exportable as PDF or DOCX, free.
OpenSave it. Brand it. Sign it.
Sign up free to save your templates, brand them with your logo, and send for e-signature — all from your WalnutsHR dashboard.
30-day free trial · No credit card required