Losing a job can be overwhelming, especially when presented with a severance agreement and pressure to sign it quickly. Although you may just want to move on, it’s essential to take a step back and consider whether the terms are truly fair. 
At Smithey Law Group LLC, we are leaders in the employment law community. We help Maryland employees understand their rights and protect their futures. We also guide employees through difficult decisions when their careers are at stake, including when not to sign a severance agreement. Contact us today to schedule a consultation.
What Is a Severance Agreement?
A severance agreement is a contract between you and your employer to end your work relationship. You may receive money, benefits, or job references in exchange for giving up your right to sue, publicly talk about the employer, or work for a competitor.
Severance agreements can provide important benefits during a job transition, but they may also waive rights you didn’t realize you had. Knowing when not to sign a severance agreement is just as important as knowing when to. An experienced attorney can help you understand exactly what you’re agreeing to before you sign.
When Not to Sign a Severance Agreement
There are some common red flags to look out for when your boss presents you with a severance agreement. If you see these, the first thing you should do is speak to a Maryland employment lawyer.
You Don’t Understand the Terms
A termination contract can hide unfair terms behind legal jargon and words people don’t often use. If you are reviewing a separation agreement with clauses you don’t fully understand, you should consult an attorney before signing. A contract should be clear to all parties; some laws even require employers to make their contract terms easy to understand.
The Offer Is Less Than What You Were Promised
Some employees sign employment contracts before they start work. If you had an initial employment contract with your employer, you should review that document before signing anything new. Your initial agreement might have guaranteed certain benefits, including severance benefits. If your severance agreement does not indicate that you will receive at least the same benefits promised in your first contract, you should ask yourself:
- Does this agreement include all accrued vacation or paid time off (PTO)?
- Am I owed commissions or bonuses?
- Does this agreement align with the terms of my initial employment contract?
Avoid signing a severance contract when it shortchanges you.
The Agreement Includes a Waiver of a Substantive Legal Right
Severance agreements often include a waiver of your right to sue your employer. While some waivers are allowed, others are illegal.
Federal law prohibits employers from forcing you to waive your right to file a charge of job discrimination with the U.S. Equal Employment Opportunity Commission (EEOC). Similarly, under Maryland’s Labor and Employment Code, any agreement that waives your right to unpaid wages or benefits or prohibits the filing of a sexual harassment claim may be void and unenforceable.
You should speak to a lawyer if your employer presents an agreement asking you to give up claims related to the following:
- Sexual harassment;
- Discrimination based on race, sex, disability, religion, and nationality;
- Unpaid wages, commissions, or overtime; and
- Retaliation.
Smithey Law Group can help you negotiate a severance contract that reflects the value of your work and respects your rights.
The Agreement Has Unfair Non-compete Terms
An employer might try to protect itself in a severance agreement by including a noncompete clause. These clauses restrict your ability to work in your field after you leave a job. Certain factors impact whether a non-compete is enforceable.
In Maryland, non-compete agreements are unenforceable against employees who earn less than 150% of the state minimum wage and certain healthcare workers. However, even if these rules do not apply to you, a noncompete clause may still be too broad or unfair to enforce.
Unenforceable red flags include:
- Being restricted from working in your field for longer than 24-36 months, or
- Being restricted from working in a location more than 10 miles from your last workplace.
If your severance agreement contains an aggressive non-compete clause, you should consider getting a legal opinion before signing it. The agreement may seriously hurt your ability to get another job or tie you up in court.
You Aren’t Given Enough Time to Review the Agreement
Federal law requires employers to give certain employees time to consider a severance agreement. If you are at least 40 years old and asked to waive federal age discrimination claims, your employer must give you at least 21-45 days to consider the agreement and 7 days to revoke it after signing.
Even if you are under 40, you still deserve time to review and understand the severance contract terms. If your employer pressures you to sign immediately, that’s a red flag.
An Attorney Has Not Reviewed the Agreement
If you don’t have a legal background, it’s easy to miss the following in a severance agreement:
- Legal jargon,
- Hidden waivers,
- Ongoing obligations, and
- Financial or professional traps.
Our attorneys can help you avoid these pitfalls. We also know how to negotiate better severance terms, catch unlawful clauses, and protect your rights.
How We Can Help
At Smithey Law Group, we advocate fiercely for Maryland workers. Our award-winning attorneys understand employment contracts, severance laws, and workplace rights. We can:
- Review your agreement line by line,
- Explain what each clause means,
- Identify illegal or unfair terms,
- Negotiate for better pay or benefits, and
- Take legal action if necessary.
Let us help you make the best decision for your career and your life.
Contact Us Today
If you’ve been offered a severance agreement in Maryland, don’t feel pressured to sign right away. Ask for help. Our team at Smithey Law Group is an employment law leader, and we are here to review your agreement, answer your questions, and protect your rights.
Call us or visit us online to schedule a consultation. You don’t have to face this alone. We’re here to guide you every step of the way.
