Sometimes, however, employers want to enter into the separation agreement before the termination date. In this case, the separation agreement may include the obligation to sign a second authorization after the date of termination. This second release would cover all claims related to practices that occurred during this transition period between the first and second signing of the contract. A declassification agreement would normally exempt the licensee from any legal liability for claims related to the incident. Employers often take advantage of the promise of severance pay to recruit top-notch talent and incentivize performance. While it may seem counterintuitive, the best time is to negotiate a separation agreement, often if you agree to join a company rather than if you decide or are forced to leave. (Indeed, an important part of any contract negotiation is the definition of how the parties will act if they separate.) Separation agreements usually provide for payments going beyond what the employer already owes to the outgoing worker. This compensation is called “severance pay” and can be issued in a lump sum or for weeks or months. Other rights can only be waived according to certain necessary languages defined by federal, state or local laws. For example, federal law prohibits a worker from waiving rights or entitlements under the Older Workers Benefit Protection Act (OWBPA), which is part of the Age Discrimination in Employment Act (ADEA), “unless the waiver is knowingly and voluntary.” A mutual authorization is a general authorization adapted to its use when each party asserts that the other party is responsible for the injury or damage it has suffered. Since each party waives any known and unknown claims against the other party, care should be taken to ensure that the parties are fully aware of their rights.
Normally, each party simply releases the other party from future liability. However, if a party is more blamed, that party may be asked to provide additional consideration (compensation). In an unlock agreement, a party is called a “releasor” – that is, the party that receives payment of money or any other consideration – and “releases” – it is normally, but not always, the party to the fault that must be exempted from liability.