Separation and Release of Claims Agreement Clause (CO)

by Practical Law Labor & Employment

A Standard Clause for a Colorado-compliant separation agreement, also known as a severance agreement, between an employer and a departing employee. This Standard Clause is drafted in the employer's favor and specifies the terms of separation, including a general release of legal claims in exchange for a benefit. It provides crucial language to help employers navigate the strict requirements of Colorado's Protecting Opportunities and Workers' Rights Act (POWR Act), which places significant restrictions on non-disparagement and confidentiality provisions concerning alleged discriminatory or unfair employment practices. This resource addresses key POWR Act conditions, including requirements for mutual clauses, explicit carve-outs for certain disclosures, and limitations on liquidated damages. This Standard Clause also includes language for releasing claims under state laws such as the Colorado Anti-Discrimination Act (CADA), the Lawful Off-Duty Activities Statute (LODA), and the Colorado Healthy Families and Workplaces Act, and is intended for use by businesses with employees in Colorado. For information on the scope of local law coverage, see Local Law Coverage in Labor & Employment Resources. This Standard Clause has integrated notes with important explanations and drafting tips.