If you’re planning to terminate a Texas employee’s job, you may want to offer them a Texas employment separation agreement. Separation agreements are contractual agreements between employer and soon-to-be former employee. They can protect the employer from liability while offering the employee certain benefits like severance pay or extended healthcare coverage.

When you offer a Texas employee an employment separation agreement, it’s important that it comply with all applicable state and federal laws—even if your company is located elsewhere. This can be a time-consuming proposition on your own. Fortunately, SixFifty can help generate customized employment documents in a fraction of the time.

What is a TX employment separation agreement?

Employment separation agreements are voluntary, legally enforceable contracts between employer and employee. They terminate the employment contract and set new terms for the relationship going forward. Neither party is obligated to offer or sign the agreement, and both parties are entitled to negotiate terms before executing the agreements.

An employer might use an employment separation agreement when they want to protect themselves from liability, or ask the employee to agree to new terms regarding privacy or other important matters.

Because employment separation agreements typically ask that the employee waive certain rights, such as releasing their right to pursue legal claims against the employer, the agreement must include valuable consideration. This is often in the form of a severance payment, extended healthcare, a neutral references clause, or other benefits.

In Texas, employees may release claims under both federal and state law (although employers should be aware of recent federal non-disparagement and confidentiality limitations handed down by the NLRB and the President). Texas employees can specifically release claims under the Texas Commission on Human Rights Act (Chapter 21 of the Texas Labor Code), the Texas Payday law, and/or Texas’ leave, minimum wage, and overtime laws.

Benefits of using a Texas employment release agreement

Separation agreements primarily protect employers, but employees benefit from them as well. An employer might offer a separation agreement as a way to limit their legal liability, or ask the employee to sign non-disclosure, non-compete, or non-disparagement provisions.

For employees, severance payments can ease the transition between employment, or make it worthwhile to avoid working for competitors for a prescribed period of time. Ultimately, separation agreements allow both parties some agency as to how the relationship will end and set terms going forward.

Because employees are not obligated to sign an offered agreement, they’re free to negotiate as desired. As long as the terms of the agreement comply with federal and state laws and the employee understands what they’re giving up in exchange for compensation, this is typically a good way to end an employment relationship.

Employment termination agreement sample

This example of a Texas employment separation agreement comes from the SEC. In the example, the employee agrees to act as a consultant after full-time employment ends, and to waive certain legal claims under federal and Texas state law. In exchange, he receives a severance payment, extended healthcare coverage, and ownership of the company vehicle he once used. Note that the agreement specifically enumerates all the state and federal law claims the employee is releasing.

How to create a TX employment separation agreement

Creating a Texas employment separation agreement requires careful research and drafting. Even for employment law attorneys, that is time-consuming and frustrating. It also exposes your organization to potential liability. On the other hand, avoid the temptation to copy-and-paste separation agreements or use one-size-fits-all online templates. There’s no guarantee that they cover all current applicable laws, which could create a significant risk.

Hiring an attorney to draft a Texas employment separation agreement from scratch can be expensive, however. That’s why SixFifty offers our Employment Docs platform. Instead of racking up billable hours or researching and drafting your own separation agreements, you can generate your own customized employment documents for a fraction of the time and expense.

Now you can easily generate top-tier Texas employment separation agreements which comply with the latest employment laws. Best of all, you can rest assured that your documents will always be current and compliant when you generate them, no matter how the law changes. Our team of legal experts keep an eye on nationwide employment legislation so we can update our legal tools accordingly.

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