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Termination of Employment by Mutual Agreement Sample

Termination of Employment by Mutual Agreement: A Sample for Employers and Employees

When an employment relationship is no longer working, both employers and employees may choose to end it by mutual agreement rather than resorting to a legal dispute or formal termination. Such a mutual agreement can provide a more amicable and less costly way to part ways, allowing both parties to move on and avoid potential legal liability.

However, to ensure that the mutual agreement is fair and valid, it should be documented in writing and reviewed by both parties (or their legal representatives) before being signed. This article provides a sample of a termination agreement by mutual agreement that employers and employees can use as a starting point and customize to meet their specific circumstances and needs.

Sample Termination Agreement by Mutual Agreement

[Company Name], a [State] corporation (the “Company”), and [Employee Name], residing at [Address], (the “Employee”), have agreed to terminate their employment relationship by mutual agreement, effective as of [Date] (the “Effective Date”), with the following terms and conditions:

1. Termination of Employment. The Employee`s employment with the Company will terminate on the Effective Date. The Employee acknowledges that he/she is resigning voluntarily and that the Company is not obligated to terminate his/her employment.

2. Severance Pay. The Company agrees to pay the Employee a severance pay of [Amount] (the “Severance Pay”), which represents [Number] weeks of the Employee`s base salary. The Severance Pay will be paid to the Employee in a lump sum on the Effective Date.

3. Benefits. The Employee acknowledges that he/she is not entitled to any further benefits from the Company after the Effective Date, except as required by law or as provided in this agreement. The Employee is responsible for notifying any third-party providers of his/her benefits about the termination of employment.

4. Return of Company Property. The Employee agrees to return all Company property, including but not limited to, computer equipment, mobile devices, keys, access cards, and documents, to the Company by the Effective Date. The Employee further agrees to certify in writing that he/she has returned all such property and has not retained any copies or duplicates.

5. Confidentiality and Non-Disparagement. The Employee acknowledges and agrees that he/she has been bound by the Company`s confidentiality and non-disparagement policies during his/her employment and that these obligations will continue after the termination of employment. The Employee agrees not to disclose or use any confidential or proprietary information of the Company or to make any comments that could harm the Company`s reputation or business interests.

6. Release of Claims. The Employee agrees to release and discharge the Company and its officers, directors, employees, agents, and affiliates from any and all claims, demands, liabilities, causes of action, and damages, whether known or unknown, arising out of or related to the employment relationship, including but not limited to any claims for wrongful termination, discrimination, harassment, retaliation, or breach of contract.

7. Governing Law and Jurisdiction. This agreement will be governed by and construed in accordance with the laws of the State of [State] without giving effect to any choice or conflict of law provision or rule. The parties agree to submit to the exclusive jurisdiction of the state and federal courts located in [County], [State] for any disputes arising out of or related to this agreement.

8. Entire Agreement and Amendments. This agreement constitutes the entire understanding and agreement between the parties regarding the termination of employment by mutual agreement and supersedes all prior negotiations, understandings, and agreements, whether written or oral. This agreement may not be amended or modified except by written instrument executed by both parties.

9. Counterparts and Electronic Signatures. This agreement may be executed in counterparts, each of which will be deemed an original, and all of which together will constitute one and the same instrument. This agreement may be executed and delivered by electronic signature, which will have the same force and effect as an original signature.

IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Effective Date.

[Company Name]

By: ____________________________

[Name], [Title]

Date: ____________________________

[Employee Name]

By: ____________________________

[Name]

Date: ____________________________

Conclusion

Terminating an employment relationship by mutual agreement can be an effective way to resolve a dispute or disagreement, but it requires careful planning, documentation, and review. Employers and employees should seek legal advice to ensure that their mutual agreement complies with applicable laws and regulations and protects their rights and interests. The above sample is just a starting point and may need to be adjusted to fit specific circumstances and state law.

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