A severance agreement can help New York employers reduce legal risk, clarify post-employment obligations, and create a smoother separation process when an employee leaves a company. These agreements are commonly used during layoffs, executive departures, restructuring, and negotiated exits. A properly drafted severance agreement should address compensation, legal releases, confidentiality obligations, and other terms that protect the employer while remaining enforceable under applicable employment laws.
Attorney Orin Kurtz works with New York employers to prepare severance agreements tailored to the circumstances of the separation and the company’s broader employment practices.
Why New York Employers Work With Orin Kurtz
Severance agreements are not interchangeable documents. The terms that make sense for a senior executive departure may be very different from those used in a routine separation or reduction in force. Employers also need to consider how severance terms align with existing employment agreements, company policies, and current New York and federal employment law requirements.
Our firm works with employers on severance drafting issues involving releases, restrictive covenants, confidentiality provisions, negotiated exits, and separation strategy. We focus on preparing agreements that are practical, enforceable, and aligned with the employer’s business objectives rather than relying on generic templates that may no longer reflect current law.
What Should A Severance Agreement Include?
A severance agreement is a contract between an employer and a departing employee that outlines the terms of separation. In exchange for severance compensation or other benefits, the employee may agree to release legal claims against the employer and comply with certain ongoing obligations.
The structure of the agreement often depends on the employee’s position, the reason for separation, and whether potential legal claims may exist.
Common provisions include:
- Severance pay and payment timing
- Continuation of benefits or COBRA-related terms
- Release of employment-related claims
- Confidentiality provisions
- Non-disparagement clauses
- Return of company property
- Cooperation obligations
- References or announcement terms
Some agreements also address equity compensation, deferred compensation, commissions, or transition assistance for higher-level employees.
Why Careful Drafting Matters
Poorly drafted severance agreements can create avoidable legal and operational problems. Overbroad restrictions, outdated release language, or inconsistent terms may lead to disputes long after the employment relationship ends.
Employers should also be aware that federal and state agencies continue to scrutinize certain severance provisions, particularly those involving confidentiality clauses, cooperation restrictions, or language that could interfere with protected employee rights.
Careful drafting helps employers clarify the scope of released claims, protect confidential business information, and reduce uncertainty regarding post-employment obligations. It can also help companies maintain consistency across employee separations while avoiding provisions that may later become difficult to enforce.
The goal is not simply to finalize paperwork for a departing employee. A severance agreement should reflect the realities of the specific separation and the employer’s broader risk-management concerns.
Can New York Employers Include Non-Compete or Confidentiality Terms?
Many severance agreements include restrictive covenant provisions, although their enforceability depends on the applicable law and the agreement’s wording.
New York employers may use severance agreements to address confidential business information, client relationships, non-solicitation obligations, or post-employment confidentiality expectations. In some situations, an employee may already be subject to existing restrictive covenants through a prior employment agreement, and the severance agreement may reaffirm or modify those obligations.
Because laws involving non-compete agreements and confidentiality restrictions continue to change, employers should carefully review severance language before relying on older templates or recycled agreements.
Severance Agreements During Layoffs or Reductions in Force
Additional legal considerations may apply when multiple employees are terminated as part of a layoff or restructuring process.
For example, employers offering severance agreements in group termination situations may need to comply with federal disclosure and review-period requirements under the Older Workers Benefit Protection Act (OWBPA). These rules can affect:
- Required disclosures
- Revocation periods
- Consideration periods
- Age-related employee data disclosures
- Release language involving age discrimination claims
Employers should also consider consistency across agreements while still addressing role-specific issues where necessary.
Executive Severance Agreements Often Require Additional Planning
Executive departures frequently involve more complicated negotiations than standard employee separations. Compensation structures, equity interests, incentive pay, and reputational concerns may all become part of the discussion.
These agreements often involve issues related to bonuses, stock options, deferred compensation, transition obligations, public statements, and ongoing business restrictions. In some situations, executives may also negotiate consulting arrangements or separation terms connected to future employment opportunities.
Because executive severance agreements are frequently negotiated rather than presented as standard form documents, the drafting process often requires additional planning and coordination.
Guidance for New York Employers Preparing Severance Agreements
Employers should avoid treating severance agreements as routine administrative paperwork. The terms of separation can affect future litigation exposure, workplace morale, and the protection of business information. If your company is preparing for a termination, restructuring, or negotiated departure, Orin Kurtz can help you draft severance agreements that align with your business objectives and applicable employment laws. Schedule a consultation today.