A breach of a severance agreement by an employer can take many forms. Fortunately, when a Maryland company fails to honor its commitments, employees often have options.
In many situations, the best course is to review the severance agreement carefully, gather records documenting the problem, preserve communications, and evaluate enforcement avenues with a skilled Maryland severance agreement lawyer before taking action. In some situations, a carefully drafted demand letter can resolve the dispute without the need for arbitration or litigation.
At Smithey Law Group LLC, we help Maryland employees evaluate severance disputes and determine the most effective path forward. Our experienced attorneys hold leadership positions within Maryland’s employment law community, contribute to leading employment law publications, and regularly share their insights through national speaking engagements and media appearances.
When an employer fails to honor a severance agreement, Smithey Law Group can help employees assess their options and pursue an effective path toward enforcement.
What Does a Breach of Severance Agreement by an Employer Look Like?
Not every disagreement between a former employee and a company qualifies as a contract violation. The answer depends on the language of the agreement itself.
A severance agreement is a contract, and both sides generally must comply with the promises they made. When an employer fails to perform an obligation under the agreement, a breach of the agreement may have occurred.
Some violations appear obvious. Others require a closer review of the contract and the surrounding circumstances.
Common breaches can include:
- Missed severance payments. The employer fails to make payments on time or stops making them altogether.
- Unpaid benefits. The company fails to provide healthcare coverage, COBRA reimbursements, outplacement assistance, or other benefits promised in the agreement.
- Reference violations. A manager or human resources representative provides information that conflicts with a negotiated neutral-reference provision.
- Confidentiality breaches. Company representatives disclose information that the agreement required them to keep confidential.
- Failure to provide consideration. The employer fails to deliver stock options, bonuses, equity compensation, or other benefits included in the contract.
- Violations of non-disparagement provisions. Company personnel make statements that contradict contractual promises regarding post-employment communications.
Employees often focus on missed payments because those violations create immediate financial consequences. However, non-monetary terms can matter just as much. A negative reference, disclosure of confidential information, or breach of a non-disparagement provision may affect future employment opportunities long after the severance payments end.
Why Should You Review an Agreement Carefully Before Assuming a Severance Agreement Breach Occurred?
Many severance disputes begin with a simple assumption: The employer failed to do something it promised. Sometimes that assumption proves correct. Other times, the agreement contains language that changes the analysis entirely.
Severance agreements often contain provisions that affect both the employer’s obligations and the employee’s available remedies. Moreover, Maryland courts generally begin with the contract’s language when determining the parties’ rights and obligations. For this reason, employees should review the contract closely before accusing a company of a severance agreement breach.
Important terms may include:
- Payment provisions—the amount owed, payment schedule, conditions for payment, and circumstances that may allow the employer to stop future payments;
- Notice requirements—procedures that require one party to notify the other of an alleged breach before pursuing formal action;
- Dispute resolution clauses—provisions requiring mediation, arbitration, or another form of alternative dispute resolution before litigation;
- Release language—terms describing which claims the employee waived and which rights remain available after signing;
- Confidentiality obligations—restrictions governing what information either party may disclose after the employment relationship ends; and
- Attorney fees provisions—clauses that may allow a prevailing party to recover legal fees and litigation costs.
Employees should also pay attention to details that rarely appear in generic online discussions of severance agreements. For example, an agreement may give the employer a short period to correct an error after receiving notice. Another agreement may tie severance payments to compliance with non-compete, non-solicitation, or confidentiality obligations. Those provisions can affect both a claim’s strength and the strategy used to resolve it.
Careful contract analysis is one reason many employees choose to have an employment attorney review their agreement before taking action. At Smithey Law Group, we can identify provisions that affect enforcement rights, evaluate whether a true breach occurred, determine whether notice requirements apply, and help you develop a strategy aligned with the contract terms.
What Documents Should You Collect That May Show Your Employer Violated Severance Agreement Terms Before Taking Action?
When an employee believes an employer violated severance agreement terms, emotions often run high. But before contacting the company or pursuing legal action, employees should gather records that help establish both the employer’s obligations and the alleged violation.
Important documents may include:
- The severance agreement—the complete contract, including amendments, exhibits, and any later modifications that affect the parties’ obligations;
- Payment records—bank statements, direct-deposit confirmations, pay stubs, and other documents showing whether the employer made the required payments;
- Written communications—emails, letters, text messages, and other correspondence discussing severance obligations or disputes;
- Benefits documentation—records involving healthcare coverage, COBRA reimbursements, stock options, bonuses, retirement benefits, or other promised compensation; and
- Reference-related evidence—communications from recruiters, prospective employers, or company representatives that may help establish a violation of a reference provision.
Employees should also create a timeline that identifies when obligations were due, when problems first appeared, and what communications followed. A well-organized timeline often helps clarify whether the issue involves a misunderstanding, a disputed interpretation, or a genuine contractual violation. The more complete the documentation, the easier it is to evaluate a potential claim’s strength.
How Can a Maryland Severance Agreement Lawyer at Smithey Law Group Help?
When an employer fails to honor a severance agreement, employees often face more than a simple contract dispute. A missed payment, denied benefit, or broken reference provision can affect finances, career opportunities, and future plans. While some disagreements result from misunderstandings, others require a more formal response.
A Maryland severance agreement lawyer at Smithey Law Group can help employees evaluate the agreement, determine whether a breach occurred, and identify the most effective way to pursue compliance.
Depending on the circumstances, that may involve:
- Reviewing the agreement—analyzing severance provisions, payment obligations, notice requirements, dispute resolution clauses, and other terms that affect available remedies;
- Investigating the alleged violation—examining communications, payment records, benefits documentation, and other evidence relevant to the dispute;
- Communicating with the employer—addressing the issue directly with the company and seeking voluntary compliance before the dispute escalates;
- Preparing demand letters—setting forth the contractual obligations, identifying the alleged breach, and requesting corrective action;
- Representing employees in ADR proceedings—advocating for employees during mediation, arbitration, or other dispute resolution processes required by the agreement; and
- Pursuing legal enforcement—taking appropriate action when an employer refuses to comply with its contractual obligations.
At Smithey Law Group LLC, we focus exclusively on labor and employment matters. Our attorneys serve in leadership roles within Maryland’s employment law community, contribute to leading employment law publications, and regularly speak on workplace law issues.
Because severance disputes often involve a combination of contract law, employment law, and strategic negotiation, we work closely with employees to evaluate the facts, assess available options, and pursue solutions tailored to their specific circumstances.
FAQ
What Should I Do If My Employer Stops Making Severance Payments?
Review the agreement, preserve relevant records, and contact a skilled attorney at Smithey Law Group to help you determine whether the employer failed to comply with a contractual obligation.
Can I Sue If My Employer Violated Severance Agreement Terms?
Possibly, but the agreement may require notice, mediation, arbitration, or other dispute-resolution procedures before litigation.
Does a Late Payment Automatically Create a Severance Agreement Breach?
Not necessarily. The agreement may contain deadlines, grace periods, or cure provisions that affect whether a breach occurred.
When Should I Contact a Maryland Severance Agreement Lawyer?
You should consider speaking with counsel as soon as you suspect the employer failed to comply with the agreement and before taking action that could affect your rights.
Concerned About a Severance Agreement Dispute? Contact Smithey Law Group LLC
Smithey Law Group helps Maryland employees navigate disputes over severance agreements every day. Because our practice focuses exclusively on labor and employment matters, we understand how severance agreements, workplace contracts, and employment disputes intersect. We know how employers approach these claims, where disagreements commonly arise, and what strategies often produce results.
That experience has earned our attorneys recognition from Chambers, Best Lawyers, Super Lawyers, Lawdragon, and other respected organizations. More importantly, it has allowed us to build a reputation as trusted advocates within Maryland’s employment law community. Our attorneys serve in leadership positions within the Maryland State Bar Association, contribute to leading employment law publications, and regularly speak on workplace law issues throughout the country.
If you believe your employer failed to honor a severance agreement, now is the time to understand your rights and your options. Smithey Law Group can review the agreement, evaluate the alleged violation, and help you develop a strategy to hold the employer accountable for its commitments.
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