Identify Issues In Separation Agreement

Skill: Identify Issues in Executive Separation Agreement

1. Subject-matter triage

• Treat the draft agreement as an issue-spotting exercise against the supporting record, not as a pure contract-interpretation task.
• First identify the governing jurisdictions, the executive’s role and status, the separation context, and every provision that may change enforceability or tax treatment.
• If the record contains multiple dates, payments, awards, complaints, or restriction types, enumerate them before analysis and apply the framework item-by-item.
• If only one of a category exists, state that explicitly and note why no broader comparison is needed.

2. Failure modes the skill is correcting

• Analyst reviews a restrictive covenant without identifying whether it is void or otherwise unenforceable under the applicable state law, and does not flag any enforcement-risk consequences that may attach to attempting to enforce it.
• Analyst assesses a non-disparagement clause without noting possible labor-law risk arising from language that could restrict protected employee communications about wages, hours, working conditions, or similar protected activity.
• Analyst reviews the release provisions without testing whether the surrounding facts create retaliation or coercion risk, including whether the timing of separation follows protected activity closely enough to matter.
• Analyst omits the tax-compliance analysis for severance payments that may be deferred compensation, including whether a payment delay is required for a covered employee.
• Analyst accepts equity language at face value without cross-checking the award treatment against the operative plan documents and award notices.
• Analyst misses factual inconsistencies between the draft and the supporting documents, leaving a memo that is legally accurate but operationally incomplete.
• Analyst flags defects without stating severity, without tying them to the source record, or without recommending a concrete correction.

3. Legal frameworks / domain conventions that apply

• Restrictive-covenant analysis: if the agreement contains a non-compete, non-solicit, garden leave, forfeiture-for-competition, or similar restraint, assess enforceability under the applicable state law and any statute, regulation, or leading case that governs employee restraints.
• Confidentiality limits: if the agreement includes confidentiality or non-disclosure language, assess whether applicable labor or state law limits provisions that bar disclosure of discrimination, harassment, retaliation, wage, or other protected workplace facts.
• Protected activity and retaliation risk: if the record reflects a complaint, internal report, charge, leave request, whistleblowing activity, or other protected activity, assess the timing and surrounding facts under the applicable anti-retaliation statute or doctrine.
• Deferred-compensation timing: if any severance or bonus-related payment may be subject to deferred-compensation rules, assess whether the payment timing, release timing, and any delay provision comply with the controlling tax authority.
• Equity treatment: verify that the separation agreement accurately describes the treatment of each outstanding equity award against the equity plan, award agreement, and any change-in-control or termination provisions.
• Release compliance: if the executive is within a protected age group or another protected-waiver regime applies, verify the required waiver elements, revocation period, consideration language, and any statutory notice requirements.
• Factual consistency: test the draft against the supporting documents for names, dates, titles, compensation terms, vesting status, termination reason, and any referenced events.
• Controlling authority: every legal conclusion must be anchored to the statute, regulation, rule, or leading case that supports it; avoid unlabeled conclusions.

4. Analytical scaffolds

• Restrictive-covenant pass: identify every restraint in the agreement; classify the restraint; identify the governing law; assess enforceability; state any statutory or common-law consequence for attempted enforcement; and identify the clause that should be revised or deleted.
• Labor-risk pass: identify clauses that may chill protected communications or concerted activity; test them against the applicable labor-law standard; and note whether a savings clause, carve-out, or narrower formulation is needed.
• Retaliation pass: identify any protected activity in the record; measure the temporal relationship between that activity and the proposed separation; cross-check the draft’s recitals and release language; and state the litigation or negotiation consequence.
• Tax pass: identify all severance-related payments and contingencies; determine whether any payment is potentially deferred compensation; cross-check timing, release effectiveness, and any special status rules; and state the tax or compliance consequence.
• Equity pass: list each outstanding equity award or incentive right; compare the draft treatment to the plan and award documents; identify any mismatch in treatment, vesting, forfeiture, acceleration, or exercise period; and state the operational consequence.
• Factual consistency pass: compare every material factual statement in the draft to the source documents; flag mismatched dates, titles, amounts, triggers, performance history, or representations; and identify the drafting correction.
• Severity pass: assign every issue an explicit ordinal severity level and use the same scale throughout.
• Issue-closing triad: for each issue, state the relevant scale or timing drawn from the record, cross-reference the related clause or source document, and explain the downstream consequence for the client.

5. Vertical / structural / temporal relationships

• Track how one provision affects another: release effectiveness, payment timing, confidentiality scope, restrictive covenants, and equity treatment often interact.
• Distinguish pre-signing conditions from post-signing obligations, and distinguish immediate payment terms from delayed or contingent payments.
• Where the draft recites facts, compare those recitals to the chronology in the source record and flag inconsistencies that could affect enforceability, tax treatment, or credibility.
• If a clause depends on a defined term, confirm the definition is present and used consistently across the agreement.
• If the record contains more than one payment stream or equity bucket, analyze each stream separately before assessing aggregate implications.

6. Output structure conventions

• Produce a categorized issues memorandum, organized by severity from most serious to least serious.
• Define the severity scale once near the top and apply it uniformly: Critical / High / Medium / Low.
• For each issue, include:
  • issue heading;
  • agreement language or provision at issue;
  • controlling legal standard with cited authority;
  • factual source or cross-reference;
  • gap, inconsistency, or enforceability defect;
  • downstream consequence;
  • recommended correction.
• Use concise, lawyerly prose; do not narrate the review process.
• Include a short prioritized action section at the end that separates issues that must be resolved before signing from issues that can be handled as cleanup.
• Make the recommendations imperative and assign them to the responsible role where the source record identifies one; if no role is named, identify the most appropriate deal-side or counsel-side owner.
• If the source materials do not support a legal conclusion, say so and mark the issue as requiring confirmation rather than forcing a conclusion.