Termination for Disability

The Termination Upon Disability clause generally operates either automatically or at the discretion of the employer. Disability is usually defined as some period, either cumulative or continuous (or both), of physical or mental disability that materially impacts the duties of the Executive. The termination may or may not include an advance written notice and a period to remedy the disability.

Clause examples use similar language, but differ significantly in the amount of time defining disability. Also, when clause examples explicitly addressed compensation, they differed widely. Some examples provide severance upon a termination due to disabilities where others provide no additional compensation and require the Executive to reimburse the Company for any disability payments.

Standard and Alternative Language

Termination for Disability. The Company may terminate the Executive’s employment upon the occurrence of a Disability.

Termination for Disability. This agreement shall terminate automatically upon the Disability of the Executive.


The Termination for Disability clause is a stand-alone clause in 95% of Executive Employment Agreements.

Disability Defined

Here is one example of a definition of "Disability." Note that this definition may be subject to internal company policies or state law:

Disability. Disability means the Executive is unable to perform the duties set forth in this Agreement for a period of [twelve consecutive weeks], or [90] cumulative business days in [any 12-month] period, as a result of physical or mental illness or loss of legal capacity.