How to review key terms for Separation Agreements

Review an employer’s separation agreement by testing the release, consideration, payment conditions, and continuing obligations against the employee’s circumstances and the complete document set. Separate legal concerns from commercial choices and factual corrections, then reconcile proposed revisions with related clauses and incorporated plans. The deliverable is a source-linked review checklist, an approved redline, and assigned unresolved decisions—not simply a cleaner agreement. Each material issue should identify the evidence, consequence, proposed action, and person authorized to resolve it.

When to use this workflow

Use this workflow before issuing an employer’s proposed agreement, when reviewing an employee’s counterproposal, or when approving a revised separation package. It suits employment counsel and in-house teams coordinating with HR, payroll, benefits, and executive-compensation specialists.

The scope is US employer-side contract review, with selected federal employment-waiver and securities-reporting issues. State wage-payment, release, confidentiality, restrictive-covenant, and notice requirements need jurisdiction-specific review. NLRA coverage, benefit-plan obligations, and tax treatment also require separate analysis where relevant. Actual language, governing law, departure circumstances, and supporting records control. This is a review process, not a determination that every identified claim can be released.

What you need

Assemble the current draft and comparison version, together with:

• Employee facts: employing entity, work locations, age, role, separation date, pending claims, and individual or potential group-program status.
• Compensation records: earned wages, accrued leave, expenses, incentive compensation, proposed severance, and insurance support.
• Related documents: employment agreement, equity awards, benefit plans, restrictive covenants, indemnification arrangements, and every incorporated exhibit.
• Process evidence: proposed offer date, delivery records, negotiation history, available signature records, and relevant program materials.
• Employer instructions: approved economics, acceptable concessions, approval authority, and the employer’s own negotiation checklist.

Assign each document a stable ID and version. If HR supplies a summary instead of a plan or award, label it as a summary; do not treat it as the operative instrument. Identify any unavailable document before starting a clause-by-clause review so its absence remains visible throughout approval.

Use the template

The companion template is Separation Agreements — Contract review checklist. Copy this table into your working document or spreadsheet. Add one row per distinct issue rather than compressing the agreement into one overall rating.

Use clause and page references in the source field, supplemented by payroll cell references or plan sections. Record a short operative excerpt or precise paraphrase in the evidence field. Distinguish “not present in reviewed draft” from “attachment not supplied.” Include factual assumptions and supporting legal sources with the relevant finding.

Rate legal and operational risk separately: ambiguous release language differs from an acceptable payment term that payroll cannot administer. Use “unresolved” where missing evidence prevents assessment. In the action field, distinguish a mandatory-law concern, commercial preference, or factual correction. Name both the working owner and required approver where they differ. Close a row with a resolution reference, not a bare “done.”

Step by step

1. Fix the review baseline and employee context

Confirm which version is under review and which entity is offering consideration. Match the employee’s name, position, work locations, and departure dates against HR records. Identify whether the departure may belong to a group program and whether pending charges or litigation require a different waiver analysis.

Do not select release language solely because the previous employee held a similar job. Confirm whether the proposed separation date precedes or follows execution; that distinction matters when reviewing the release cutoff and continuing employment obligations. Record missing facts as questions before approving substantive terms. If facts remain uncertain, make approval conditional rather than selecting an unsupported legal pathway.

Checklist output: a baseline row identifying the draft, relevant jurisdictions, assumed departure category, and owner for each missing fact.

2. Reconcile consideration with existing entitlements

Compare earned compensation, existing benefits, and incremental separation consideration component by component. Trace severance, incentive payments, equity treatment, insurance support, and reimbursement to the relevant record or instrument. Check whether the agreement purports to amend a plan or merely describes its operation. Distinguish confirming an amount from confirming the employee’s entitlement and payment deadline.

ADEA waivers require additional consideration, understandable written language, identification of the ADEA, written advice to consult counsel, and exclusion of post-execution claims. These are minimum safeguards, not a complete voluntariness analysis. See 29 C.F.R. § 1625.22(b)–(d).

Avoid allowing a general release-effectiveness condition to govern earned compensation without separate wage-law analysis. Where a component depends on an award or plan, record that dependency instead of accepting the draft’s description as proof.

Checklist output: separate rows for disputed compensation components, supporting records, applicable dependencies, and proposed revisions.

3. Map the release and protected activity

Identify the releasing persons, released entities, claim categories, cutoff date, unknown-claim wording, and exceptions. Test agreement-enforcement rights, preserved benefits, and indemnification against the intended bargain. Do not assume a broad reservation covers every intended exception or that listing a claim establishes its releasability.

Keep release scope separate from agency access. An agreement cannot prevent filing an EEOC charge or testifying, assisting, or participating in an EEOC proceeding. Preserving that access does not automatically preserve every individual monetary remedy. See the EEOC severance-waiver guidance.

Read confidentiality, non-disparagement, cooperation, notice, and remedies provisions together. The SEC identifies reporting permission paired with conflicting notification requirements as a potential Rule 21F-17 problem. Its guidance concerns direct communications about possible securities-law violations, not a general invalidation of confidentiality provisions. See SEC Whistleblower Protections.

Checklist output: source-linked release findings and cross-references to provisions that undermine intended exceptions.

4. Check waiver timing and delivery dependencies

For ordinary ADEA waivers, allow at least 21 days for individual consideration or 45 days for a covered group program, plus at least seven days after execution to revoke; effectiveness awaits revocation expiry. Filed-charge or court-action settlements follow separate provisions. Material revisions restart consideration unless the parties agree otherwise. See § 1625.22(e), (g).

For covered programs, disclosures address the relevant group, eligibility, time limits, and required age/job-title information. They must accompany the start of consideration. See § 1625.22(f).

Have counsel confirm the pathway, decisional unit, disclosure contents, and final-offer date. Preserve revision history and delivery evidence rather than silently retaining an earlier date. Verify the revocation recipient and delivery method are usable.

Checklist output: timing assumptions, deadline formulas, delivery evidence, disclosure status, and assigned questions. Calculate dates only after verifying their inputs.

5. Test payment and continuing-obligation mechanics

Trace each payment through execution, delivery, revocation expiry, and other contractual conditions. Review installment dates, withholding, offsets, forfeiture, cure language, and tax-review dependencies. Identify whether payment follows a fixed date or an event whose occurrence needs evidence.

Test property return, data deletion, cooperation, and notices against practical performance. Who receives equipment? What establishes completion? Does cooperation specify reasonable request procedures, expenses, and any duration? Does a payment condition depend on an undefined event or third-party action? Flag impractical personal-device deletion requirements for a more precise process.

Read surviving covenants against their original instruments. A reference to an earlier covenant does not establish its content or enforceability. Distinguish survival of an existing obligation from a proposed expansion requiring separate approval.

Checklist output: payment and obligation rows identifying triggers, evidence, responsible parties, dependencies, and drafting corrections.

6. Prepare connected revisions and obtain decisions

Group changes as mandatory-law concerns, commercial preferences, or factual corrections. Explain the consequence of leaving each material issue unchanged. Give the approver a preferred revision and, where appropriate, an acceptable fallback—not unexplained alternatives.

Recheck dependent provisions after each material change. Revising the release effective date may affect payment language; revising cooperation may require changes to notice and remedies clauses. Read the clean draft alongside the redline to catch inconsistent definitions and exceptions. Confirm that commercial concessions remain within the instructed approval authority.

Checklist output: proposed language location, rationale, fallback, approver, and unresolved decision. Preserve rejected proposals and reasons where they explain the final bargain.

7. Verify the approved package and close exceptions

Compare the final approval draft against the reviewed version and every exhibit. Recheck amounts, dates, definitions, surviving agreements, and internal references. If a signed package exists, compare it with the last approved draft before issuing payment instructions; otherwise assign that comparison as a handoff condition.

Separate drafting completion from factual completion. An approved clause does not prove delivery, revocation expiry, property return, or satisfaction of another payment condition. Keep administrative follow-through outside the review’s closure unless the necessary evidence is available.

Checklist output: final document IDs, approval references, and closure evidence or assigned open issues. Escalate unexplained changes instead of carrying forward an earlier approval.

Worked example

Fictional scenario: Alder Fen Systems, Inc. proposes a separation agreement releasing ADEA claims for Mara Bell, a 54-year-old operations director. Draft SAF-04 offers $48,000 in severance, lists $6,400 of earned salary separately, and incorporates an unavailable equity award. HR describes the departure as individual, but counsel has not confirmed whether it belongs to a broader program. No filed charge or court action has been identified. The draft allows ten days for consideration.

The employer wants prompt approval. Three representative review entries change that decision:

R01 blocks issuance: the proposed period does not satisfy either ordinary ADEA pathway, while program status determines the additional work required. R02 calls for coordinated revisions, not another general reporting exception. R03 supports confirmation of listed amounts, but not approval of the equity description or wage-payment mechanics. The evidence does not establish the missing award’s vesting terms. All parties, documents, amounts, and terms in this example are fictional.

Common mistakes

• Treating the release as the entire review. Check payment mechanics, surviving documents, exceptions, and continuing duties separately.
• Treating all listed money as new consideration. Reconcile existing entitlements and incremental severance against payroll and plan evidence.
• Reviewing the agency exception in isolation. Search notice, confidentiality, cooperation, and remedies for conflicting restrictions.
• Reusing a prior timing schedule. Confirm the pathway, final offer, delivery evidence, revisions, and program disclosures.
• Closing a finding because wording improved. Require approval and evidence, or assign the remaining dependency explicitly.

Final quality check

Before approving the review deliverable, confirm:

• Every material finding identifies a document version and clause or page.
• Cash, benefits, and equity descriptions reconcile to supporting records.
• Existing entitlements remain distinct from incremental consideration.
• Release exceptions operate consistently across related provisions.
• Waiver timing and disclosure decisions have counsel confirmation.
• Legal propositions match their sources and jurisdictional scope.
• Material open issues have owners, approvers, and stated approval conditions.
• The package includes required exhibits and an assigned execution comparison.

Complete the workflow with DecoverAI

DecoverAI is the Legal Intelligence Platform for litigation and transactions. In its contract-review workflow, choose the employer as represented party in Word and provide separation-specific instructions. Findings quote clauses, rank severity, locate text, and identify missing language as not present. Lawyers edit or insert suggestions as ordinary tracked changes in the signed-in Word user’s name and can dismiss findings with reasons. Tabular review supports work across multiple documents; the checklist remains your work product. To assess this workflow, book a demo, retaining counsel’s responsibility for verification and approval.

Frequently asked questions

Can the same release be used for every employee?

Not without checking age, locations, claims, and departure context. A consistent employer baseline is useful, but individual facts and potentially applicable program disclosures can require different treatment. Record deviations and their reasons.

Does compliant ADEA wording establish that the whole release is valid?

No. Minimum safeguards do not resolve every knowing-and-voluntary issue. The EEOC describes differing judicial approaches to other discrimination waivers, including surrounding circumstances. Review wording and process evidence separately using the EEOC guidance.

What if an incorporated equity award is missing?

Mark it as not supplied and identify the dependent provision. Request the operative award and relevant plan. Do not substitute HR’s expectation for source evidence or approve unsupported treatment.

Should payroll receive the legal review checklist?

Provide focused, approved instructions identifying amounts, contractual triggers, and unresolved conditions. Keep legal analysis separate where appropriate. A draft checklist neither establishes that conditions occurred nor authorizes payment.

Sources

• EEOC: Waivers and Claims Under the ADEA, 29 C.F.R. § 1625.22
• EEOC: Understanding Waivers of Discrimination Claims in Employee Severance Agreements
• SEC: Whistleblower Protections

Scope: selected US federal issues using the supplied October 13, 2026 research cutoff; jurisdiction-specific review remains necessary.

This guide is general information about legal workflows, not legal advice for any matter. It was drafted and reviewed with AI assistance. The worked example is fictional. Contract rights and procedure depend on the governing law, the actual wording, and the facts, so check the cited sources and the rules that apply in your jurisdiction before relying on it.