An Employment Separation Agreement is a legally binding contract between an employer and employee which serves as an official record of their separation. This type of agreement outlines the terms of the separation, such as salary, benefits, and other matters surrounding the termination of employment. In many cases, these agreements outline severance payments and other forms of compensation related to leaving employment, such as vacation pay or payment for unused sick days. By signing the agreement, both parties agree to its terms and conditions, meaning they are bound to comply until all of the stated stipulations have been fulfilled.