Severance

Severance refers to the formal termination of a person’s employment with a company. It often involves the payment of a financial package, known as severance pay, which is provided to the employee when they are laid off or terminated, especially in situations where the employee did not resign voluntarily. Severance agreements may include additional terms, such as confidentiality clauses, non-compete agreements, and waivers of future claims against the employer. The purpose of severance is to ease the transition for the employee after losing their job and to protect the interests of the employer. Severance can also apply more broadly to the act of severing ties or connections in various contexts, but in a workplace or legal context, it specifically pertains to employment termination.