Employment Mutual Separation Agreement: Everything You Need to Know

An employment mutual separation agreement (MSA) is a legal document that outlines the terms and conditions of an employee’s voluntary departure from their employer. It is often used when both the employer and employee agree that it is in their best interest to end the employment relationship. An MSA can help both parties avoid litigation and can also provide a smooth transition for the departing employee.

Why Consider a Mutual Separation Agreement?

There are a number of reasons why an employer or employee may want to consider an MSA:

1. Resolving disputes: If there are any disputes between the employer and employee, an MSA can help resolve them in an amicable way.

2. Avoiding litigation: An MSA can help avoid costly and time-consuming litigation that can drag on for months or even years.

3. Protecting the company’s reputation: An MSA can help protect the company’s reputation by avoiding negative publicity that can result from litigation.

4. Providing a smooth transition for the employee: An MSA can provide a smooth transition for the departing employee by outlining any severance pay, benefits, or references they may be entitled to.

5. Clearing the way for new talent: An MSA can help clear the way for new talent by allowing employers to quickly and easily replace departing employees.

What Should Be Included in an Employment Mutual Separation Agreement?

An MSA should include the following:

1. The reason for the separation: This should be stated clearly and concisely.

2. The effective date of the separation: This should be the date on which the employee will no longer work for the employer.

3. Any severance pay: If the employer is offering severance pay, the amount and timing of the payments should be included.

4. Health and retirement benefits: If the employee is entitled to any health or retirement benefits, those should be outlined.

5. Non-disclosure and non-compete agreements: If the employer requires the employee to sign a non-disclosure or non-compete agreement, those should be included in the MSA.

6. References: If the employer agrees to provide references for the departing employee, the terms of those references should be outlined.

7. Legal language: The MSA should include legal language that protects both the employer and employee.


Employment mutual separation agreements can be a useful tool for both employers and employees. They can help avoid litigation, provide a smooth transition for the departing employee, and clear the way for new talent. However, it is important to work with an experienced attorney to ensure that the MSA is legally sound and protects the interests of both parties.