Definition

Noun: A legally binding contract between an employer and an employee that outlines the terms and conditions under which the employment relationship will end. It typically specifies any severance pay, benefits continuation, and other considerations in exchange for the employee's agreement not to sue the employer.

Usage

A "severance agreement" is used when an employment termination is not for cause (e.g., due to layoffs, restructuring, or mutual separation). It is a formal document that finalizes the departure.

Examples

• The company offered a generous severance agreement that included six months of salary and extended health benefits.
• Before receiving her final payment, she had to review and sign the severance agreement.
• His lawyer advised him to negotiate the terms of the severance agreement before accepting it.

Advanced Usage

• "To enter into a severance agreement": To formally agree to and sign the contract.
  • After negotiations, the departing executive entered into a severance agreement.
• "The terms of the severance agreement": Refers to the specific conditions, such as payment amount, non-disclosure clauses, or non-compete agreements.
  • The terms of the severance agreement prohibited him from working for a competitor for one year.

Variants and Related Words

• Severance package (n): Often used interchangeably with "severance agreement," but can refer more broadly to the total sum of benefits (pay, stock options, etc.) offered upon departure, which are then detailed in the agreement.
• Separation agreement (n): A very similar term, sometimes used synonymously with "severance agreement," especially in non-corporate contexts.

Synonyms

• Termination agreement
• Separation agreement
• Release agreement (emphasizes the employee's release of legal claims)

Related Phrases

• To be offered a severance agreement: To be presented with the contract by an employer.
  • Employees affected by the downsizing were offered a severance agreement.
• To negotiate a severance agreement: To discuss and try to change the terms of the proposed contract.
  • She hired an attorney to help her negotiate a better severance agreement.

Noun

1. an agreement on the terms on which an employee will leave