Employee separation agreement and consulting arrangements?

North Carolina is an at-will state, meaning that either party can terminate the work relationship at any time, as long as that termination is not done illegally...for instance, as the result of employment discrimination. If you have a contract with an employer, then you are bound by the terms of the contract. For instance, if the contract states that you must provide 30 days notice prior to termination, then if you don't provide the notice, you could be in breach of the contract. In regards to what must be in the agreement, the employer can't provide false or misleading information. If the employee is over 40, then the employer must provide at least 21 days for the employee to review the agreement under the Older Workers Benefit Protection Act.

Generally speaking, an employee separation agreement should address rights, responsibilities, and restrictions. As applicable, this typically includes pay and benefits (such as final pay, severance pay or garden leave pay, COBRA, 401K, and stocks); return of company property; release of claims; and restrictive covenants (such as non-competition, non-disclosure/confidentiality, and non-disparagement). The agreement may also include other agreed-upon or required terms (such as eligibility for rehire and reference to the Age Discrimination in Employment Act/Older Worker Benefit Protection Act). This is just general guidance, as what is most appropriate for an employee separation agreement varies depending on specific circumstances.

I would look into a good HR software package.

Separation agreement is usually helpful when separating with an employee amicably and includes other terms that you want to ask of the other party and which you will also make promises. In other words, it is a two-way (or mutual) agreement. A termination letter is most likely a one-way communication, a notice that such employee is being terminated. You should talk to your preferred counsel to discuss facts in detail and make a determination which one will be the right approach.

I strongly recommend that you have an attorney experienced in severance negotiations review the agreement and advise you. I am licensed in NY and would be happy to do so. Feel free to reach out to me directly at 770-807-0083.