Maryland Severance Agreement Lawyer - Smithey Law Group LLC

When your employment ends, the paperwork you sign can shape your financial future, your career options, and even your legal rights. A severance agreement is not just a formality. It is a contract. And in Maryland, the law gives it real weight.

At Smithey Law Group LLC, our award-winning team approaches severance agreements with one goal: Protect your options and make the terms clear, fair, and enforceable. When you speak to a Maryland severance agreement lawyer from our firm, you get direct and helpful answers, whether you are an employee reviewing an offer or an employer drafting one.

What Is a Severance Agreement?

A severance agreement is a contract between an employer and employee that sets the terms of separation. It usually involves payment or benefits in exchange for certain promises made by the employee.

Maryland follows an at-will employment system. This means an employee or employer can end the employment relationship at any time for almost any reason, unless a contract says otherwise. Severance agreements often arise when an employer wants to terminate employment, whether the employee is at-will or under a contract, and in the process offer compensation, limit disputes, and create a clean break.

Why Do Employers Use Severance Agreements?

Severance agreements can serve several specific legal and business purposes.

Early Termination of an Employment Contract

Some employees work under written contracts. These contracts may promise employment for a set period or require the employer to give the employee a certain amount of notice before termination. If the employer ends the contract early or fails to give adequate notice, a severance agreement often provides compensation for the change.

Without a severance agreement, the employer could face a breach-of-contract claim. With a severance agreement, both sides may resolve the issue up front and without court intervention.

Termination for Reasons Not Listed in the Contract

Employment contracts often promise employees protection from firing without “good cause,” typically defined as serious misconduct, repeated poor performance, or a violation of company rules. But even when an employment contract exists, it may not cover every situation that could lead to termination, such as company restructuring or elimination of a role.

A severance agreement helps fill in gaps. It can allow an employer to end the relationship on new terms while reducing legal risk and providing the employee with compensation or benefits.

Preventing Immediate Competition

Executive employees and employees who work on important company matters often have access to:

Sensitive information,
Client relationships,
Talented personnel, and
Business strategies.

A severance agreement can help prevent a former employee from using sensitive information or competing with the employer. This is where restrictive covenants that contain non-compete or non-solicitation provisions come into play.

Maryland law allows certain restrictive covenants, but they must be reasonable in scope, geography, and duration to be enforceable. A knowledgeable Maryland severance agreement attorney from Smithey Law Group can help ensure that restrictive covenants in your contract are fair and effective.

Common Provisions in a Severance Agreement

Every severance agreement is different. But many include several core components.

Payment and Benefits

Severance pay is the bargaining chip for ending a work relationship early or amicably. The pay may include:

A lump sum payment,
Salary continuation for a set period, and
Continued benefits.

Maryland law requires employers to pay wages owed at termination, including certain promised benefits. Failure to pay wages can lead to penalties. But severance pay is not always required by law and is the product of negotiation.

Instructions for Wrapping up Employment

Severance agreements often include clear steps for closing out the work relationship. These steps may include procedures and timelines for:

Returning company equipment,
Providing passwords or files,
Transitioning client relationships, and
Maintaining confidentiality.

These provisions can protect the employer’s operations and data.

Waiver of Legal Rights

This can be one of the most important and most misunderstood parts of a severance agreement. In exchange for payment, the employee usually agrees to waive certain legal claims.

In a severance agreement, an employee might waive:

Discrimination claims,
Wrongful termination claims, and
Other civil lawsuits related to employment.

However, an employer cannot require an employee to waive their right to seek a lien for unpaid wages. For employees who are 40 or older, federal law requires specific language and review periods before waiving age discrimination claims.

If a waiver does not meet legal requirements, it may not be enforceable.

Non-Compete and Non-Solicitation Clauses

These clauses restrict what an employee can do after leaving the company:

Non-compete agreements—limit an employee’s ability to work for competitors or start a competing business;
Non-solicitation agreements—prevent employees from contacting clients or employees of the company.

Maryland courts do not enforce overly broad restrictions. Our skilled Maryland severance agreement lawyer can help you strike the right balance in an agreement.

Common Pitfalls in Severance Agreements

Severance agreements are not always straightforward. Both employees and employers can unwittingly make costly mistakes.

For Employees

Among many issues, employees with severance agreement offers should watch out for the following.

Signing too quickly

Many employees feel pressure to sign. But once you sign, you may lose certain legal rights.

You should understand:

What potential claims you are giving up,
Whether the compensation is fair, and
How restrictions can affect your next job.

An experienced Maryland severance agreement attorney from our firm can review your agreement before you sign and help safeguard you from unfavorable terms.

Overlooking restrictive covenants

A non-compete or non-solicitation clause can limit your career options.

Some employees do not realize:

How long restrictions last,
Where restrictions apply, and
What activities are prohibited.

This can lead to unexpected legal problems later.

Misunderstanding payment terms

Not all severance is guaranteed. Payments may depend on:

Signing the agreement,
Not violating the terms, and
Continued compliance with restrictions.

If you breach the agreement, payments may stop.

For Employers

Employers have their own pitfalls to be aware of when entering into severance agreements.

Using overly broad restrictions

If a non-compete is too broad, a court may refuse to enforce it. This may leave the employer with no protection at all.

Failing to comply with wage laws

Maryland law requires employers to pay all earned wages at termination. If an employer improperly withholds wages, they may face penalties. A severance agreement cannot circumvent these obligations. However, severance pay is typically a negotiated benefit and not automatically required under state law.

Improper waiver language

If the agreement does not meet legal requirements for waivers, especially for employees 40 or older, the waiver of claims may be invalid. An invalid waiver can expose the employer to future lawsuits.

Ambiguous terms

Unclear language leads to disputes. If the agreement does not clearly define the payment structure, scope of restrictions, or duties after termination, enforcement may become difficult.

How a Maryland Severance Agreement Lawyer Can Help

A severance agreement is not just paperwork. It is a legal negotiation that can affect all parties involved for years. Our Maryland severance agreement attorney can help you understand what is at stake and how to protect your position.

For Employees

Our severance agreement attorney can:

Review the agreement line by line,
Identify unfair or unenforceable terms,
Explain what rights you are waiving,
Negotiate better compensation or benefits,
Help limit restrictive covenants, and
Help ensure compliance with federal and state law.

In many cases, employees can improve their severance package simply by asking the right questions through counsel.

For Employers

Our severance agreement lawyer can help employers:

Draft clear, enforceable agreements;
Structure payments properly;
Ensure compliance with wage and employment laws;
Include valid waiver provisions;
Create reasonable non-compete and non-solicitation clauses; and
Reduce the risk of future litigation.

A well-drafted agreement can prevent disputes before they start.

Get the Right Terms down on Paper

Severance agreements are powerful legal tools. They can protect your future or limit it. Whether you are reviewing an offer or drafting one, working with a Maryland severance agreement lawyer helps confirm that the terms are clear, enforceable, and aligned with your goals.

Smithey Law Group is a leader in Maryland employment law, and we provide direct, practical guidance. No unnecessary complexity. Just clear answers and strong advocacy. If you are dealing with a severance agreement, now is the time to get it right. Call us or contact us online today.

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