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Employment Separation, Severance, and Release Agreements: FAQ's

Here are answers to some frequently asked questions about employment Separation Agreements, Severance & Release Agreements:

Question: Are employers in the District of Columbia or Virginia required to offer severance pay to employees who are laid off or otherwise terminated?

Answer: No law in the District of Columbia or Virginia requires a private company to pay severance to employees who are fired. laid-off or otherwise leave the job. Severance pay may, however, be required according to laws allowing severance pay to certain public employees or executives or other workers under employment agreements. Severance may also be an essential component of an employee separation agreement where the employee is asked to "release" potential employment discrimination or other claims against the employer. Employers should note that certain severance pay plans are subject to requirements of the Employee Retirement Income Security Act (ERISA).

Question: How much severance pay is typically offered to an executive or other employee?

Answer: Severance pay packages vary widely. Factors that determine the appropriate level of severance include industry standards, the company's ability to pay severance, the availability of other benefits to offset severance pay, and the relative bargaining power of the parties, also known as leverage.

Question: What terms are typically included in an employment Separation Agreement?

Answer: Every Separation Agreement must be tailored to the particular employer and employee, but issues that typically require negotiation include: (1) employee compensation and benefits upon termination; (2) release of liability for claims; (3) references and other matters important to the employee's interest in securing future employment; (4) non-compete, non-disclosure agreements and other restrictive covenants important to the employer's interest in protecting business secrets; and 5) confidentiality of the Separation Agreement.

Question: What are employment "release" agreements, and are releases enforceable?

Answer: In the context of employment law, a "release" is an agreement between the employer and employee under which either or both waive the right to sue the other on certain potential claims. Separation agreements that include severance pay or other valuable consideration to the employee often include broad releases in which the employee generally waives the right to sue the employer for employment discrimination or any other claims that may have arisen during the course of employment. Several employment-law statutes govern the terms, conditions and legal scope of employee releases.

In short, no two separation agreements are alike. Rather, each agreement must be tailored to the specific relationship and circumstances. To schedule a consultation concerning Separation Agreements, Severance, or Releases, contact Searcy Business Litigation & Employment Law, LLC at 703-644-4122 (Virginia) or 202-393-1443 (District of Columbia).

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* Searcy Business Litigation & Employment Law represents clients in the District of Columbia and Northern Virginia, including Arlington County, Fairfax County, Loudoun County, and Prince William County, the cities of Alexandria, Falls Church, and Fairfax. The firm also serves clients in the Virginia counties of Clarke, Culpeper, Fauquier, Frederick, Madison, Page, Rappahannock, Shenandoah, Spotsylvania, Stafford, and Warren, as well as the cities of Fredericksburg and Winchester, Virginia and more.

All legal information provided on this website is general and should not be used or relied on as legal advice as legal advice cannot be given without full
consideration of all relevant information relating to a specific situation.

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