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Exit Agreements/Termination Letters

For Employers

A growing number of savvy employers are now taking the prudent step of having departing employees sign an exit agreement provided by the company. While they are not required by law, employment exit agreements serve as a mechanism to sever an employment relationship as amicably as possible, while protecting companies from lawsuits, such as claims for wrongful dismissal. This is especially important for senior management, and people who have direct contact with customers or clients, or who know about proprietary design and production techniques.

When an employee is leaving, whether voluntarily or because they have been terminated, there are things that employers can require of the individual and things that employers are legally required to do – or prohibited from doing. These exit agreements are binding terms and conditions that protect the rights of the employer and provide the employer with legal recourse should the employee breach the terms of the exit agreement.

Exit agreements and termination letters may contain the following information:

Non-disclosure clauses
It is important for companies to protect business materials, designs, transaction information and ideas from being shared with outside sources. Typically exit agreements are created to ensure that company information is kept confidential. This may include limiting previous employees from sharing trade information, client lists, strategic plans, patents, IP information, coding etc.

Non-compete clauses
These clauses exist to ensure that employees cannot compete with their former employers in a similar profession or trade. Usually the provision in the agreement will stipulate the length of time required before the employee can work in the same industry or field as the previous employer. For example, a musician may sign a non-compete clause stating that she will not sign with another recording company for two years

Return of property clauses
An exit agreement sometimes contains clauses that ensure employees return all company property back to the employer. This may include company cars, company cell phones, credit cards, hardware, software, administrative paraphernalia, and company reports and documents.

Why choose an employment lawyer at Levitt LLP?

At Levitt LLP our employment lawyers are committed to drafting and executing impeccable exit agreements and termination letters to ensure that the employment relationship is permanently and collegially severed with your employee.

Our employment lawyers can review your exit agreement / termination letter and, based on the specific circumstances, ensure that it both meets the company’s minimum obligations and also meets the company’s goals.

Our team of employment lawyers can ensure that your exit agreement is legally binding and properly protects your company’s interests. Each situation is unique; so talk with one of our employment lawyers in Toronto, the GTA or across Canada to learn about how we can help you reduce the HR risks in your organization.

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