Georgia Severance Agreement: Understanding the Basics

When an employer and employee part ways, it is common practice for the employer to offer a severance package to the employee. This is typically done to provide the employee with some financial support during the transition period as they search for a new job. A severance agreement is a legal document that outlines the terms and conditions of this package.

In the state of Georgia, severance agreements are governed by state and federal laws. It`s important to understand the basics of these laws in order to ensure that the severance agreement is legally binding and mutually beneficial for both parties involved.

What is a Severance Agreement?

A severance agreement is a legal contract between an employer and an employee that outlines how the employee will be compensated upon their termination from the company. This agreement can cover a variety of things, including:

• The amount and timing of severance payments

• Benefits continuation (e.g. medical, dental, life insurance)

• Non-compete and non-disclosure agreements

• Release of claims and waivers of rights

It`s important to note that a severance agreement is a negotiable contract. This means that both parties can negotiate the terms and conditions of the agreement until they reach a mutually acceptable arrangement.

Georgia State Law and Severance Agreements

In the state of Georgia, there are no laws that require employers to offer severance packages to their employees. However, if an employer has a policy or practice of offering severance packages, they must comply with the terms and conditions outlined in those policies.

One important aspect of Georgia law that employers should be aware of is the Georgia Restrictive Covenants Act. This law governs non-compete and non-disclosure agreements in Georgia and outlines the requirements that these agreements must meet in order to be enforceable. If a severance agreement includes a non-compete or non-disclosure agreement, it is important to ensure that it complies with Georgia state law.

Federal Law and Severance Agreements

The federal Older Workers Benefit Protection Act (OWBPA) has specific requirements for severance agreements that are offered to employees who are 40 years of age or older. This law requires that the severance agreement include specific information about the employee`s right to consult with an attorney and their right to waive their rights under the Age Discrimination in Employment Act (ADEA). Failure to comply with the OWBPA`s requirements can result in the agreement being unenforceable.

In addition, employers must be careful when including provisions in severance agreements that could be considered discriminatory. The Equal Employment Opportunity Commission (EEOC) has guidelines for severance agreements that prohibit discrimination on the basis of age, race, gender, religion, and other protected characteristics.


Severance agreements can be helpful for both employers and employees during a period of transition. However, it`s important to ensure that the agreement complies with both state and federal laws. Employers should work with legal counsel to draft a legally binding and mutually beneficial severance agreement that meets their needs and the needs of their employees.

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