What is severance agreement ? - Definition from WhatIs.com


severance agreement

Part of the Business terms glossary:

A severance agreement is a contract between an employer and employee documenting the rights and responsibilities of both parties in the event of job termination. 

The contract specifies any severance package of pay and benefits and the conditions under which it will be provided or withheld. Common elements of a severance agreement include: 

  • The amount of any severance pay in lieu of contracted notice period.
  • Any extended benefits, such as healthcare or insurance, and the length of time they will be provided.
  • A non-compete clause forbidding the employee to work for a competitor within a specified time period.
  • An agreement not to file a wrongful dismissal lawsuit. 

Severance agreements are sometimes offered as part of a job contract. More often, they are offered as part of job termination, for example in the case of layoffs. 

This was last updated in July 2013
Contributor(s): Ivy Wigmore
Posted by: Margaret Rouse

Related Terms


  • cloud computing

    - Cloud computing is a general term for the delivery of hosted services over the internet. These services are broadly divided into three categories: IaaS, PaaS and SaaS. (searchCloudComputing.com)

  • business process mapping

    - Business process mapping is the visual display of the steps involved in a business process from start to finish. (SearchCIO.com)

  • business technologist

    - A business technologist is an IT (information technology) professional with a combination of broad general knowledge of technology along with an understanding of non-technical aspects of a business... (WhatIs.com)


  • Business terms

    - Terms related to business, including definitions about project management and words and phrases about human resources, finance and vertical industries.

  • Internet applications

    - This WhatIs.com glossary contains terms related to Internet applications, including definitions about Software as a Service (SaaS) delivery models and words and phrases about web sites, e-commerce ...

Ask a Question. Find an Answer.Powered by ITKnowledgeExchange.com

Ask An IT Question

Get answers from your peers on your most technical challenges

Ask Question

Tech TalkComment



    Contribute to the conversation

    All fields are required. Comments will appear at the bottom of the article.