Question

What is the importance of this in an Employee Separation Agreement:

16. Transfer of Claims. Employee has not assigned, transferred, or purported to assign or transfer to any person or entity any claims released under Section 3 above. Employee agrees to indemnify and hold the Released Parties harmless against all rights, claims, warranties, demands, debts, obligations, liabilities, costs, legal costs (including attorneys’ fees) or judgments based on or arising out of any such assignment or transfer. Employee further warrants that nothing prohibits Employee from entering into this Agreement.

Answer 1

Under the Employee Separation Agreement, the Transfer of Claims signifies that an employee has not assigned or transferred any of his or her claims or rights to a third-party, be it an entity or a person, against that of the Organization. Besides, it also signifies that the employee is willingly holding the Employer harmless against any claims or rights, warranties or debts, etc. that could be made against them by the employee otherwise. Also it reassures that the employee signed the agreement without him or her being prohibited to do so; hence out the own free will of such an employee.

Therefore, the importance of ‘Transfer of claims’ in gist is that the employees shall set free the employer from any sort of claims against the employee and at the same time, assure the employer that he or she has not transferred the rights of claims or warranty, etc. to a third party who would have otherwise claimed on behalf of the employee in employee’s absence from the employer.