An agreement in which an employee who is being terminated agrees not to sue the employer in exchange for specific benefits is called a_____.
A) yellow-dog contract
B) separation agreement
C) non-enforceable contract made under duress
D) severance contract

Question

Quizplus · Accepted Answer

A separation agreement is a legal document that outlines the terms and conditions of an employee's departure from the company. It typically includes provisions related to severance pay, benefits continuation, and release of claims, meaning that the employee agrees not to sue the employer in exchange for these benefits. A yellow-dog contract is a type of employment contract that prohibits workers from joining a union, while a non-enforceable contract made under duress is one that is signed under coercion or intimidation and is therefore invalid. A severance contract is not a commonly used term, but it could refer to the same concept as a separation agreement.

An Agreement in Which an Employee Who Is Being Terminated