Another great way to limit your liability in terminating an employee is to provide a severance agreement. A severance agreement is an agreement where the employee agrees to release the employer from any and all liability and the employer agrees to pay the employee a certain amount of money. There are certain terms that must be contained in a severance agreement in order for it to be legally enforceable. Never draft your own severance agreement without first consulting an attorney. We are always available to provide assistance and document drafting services.