Don’t Sign That Severance Agreement Yet: What You’re Actually Giving Up

Maryland is an at-will employment state, but at-will has never meant an employer can fire you for an illegal reason. If you were let go and handed a packet on your way out the door, the document in your hands is doing far more work than the dollar figure on the first page suggests. Wrongful termination lawyers in Maryland see the same sequence play out constantly: an employee signs within a few days, feels relieved to have something, and learns later that they released a claim worth several times the payment they accepted.

Severance is not a courtesy. It is a purchase. The employer is buying your legal claims, and the price is negotiable more often than most people assume.

What am I giving up when I sign a severance agreement?

You are signing a general release, which wipes out every legal claim you have against the employer as of the date you sign, including claims you do not yet know you have.

Most releases are written broadly enough to cover discrimination and retaliation claims under Title VII, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and the Family and Medical Leave Act, along with state claims under the Maryland Fair Employment Practices Act (Title 20 of the State Government Article) and wage claims under the Maryland Wage Payment and Collection Law. A single sentence of boilerplate can extinguish a viable retaliation case, unpaid commissions, and an unpaid bonus all at once.

Courts will enforce that release if the waiver was knowing and voluntary. Regret is not a defense. Neither is the fact that you did not read it closely because HR was waiting in the room.

How long do I actually have to decide?

If you are 40 or older, federal law gives you a minimum of 21 days to consider the agreement, or 45 days if the termination is part of a group program, plus 7 days after signing to revoke it. Those protections come from the Older Workers Benefit Protection Act, which amended the ADEA at 29 U.S.C. § 626(f).

If you are under 40, no statutory review window applies. The deadline is whatever the employer wrote, and a five-day turnaround is common.

The group termination rule deserves attention. When an employer offers severance to a group, it must disclose the job titles and ages of everyone selected for termination and everyone in the same decisional unit who was not selected. That attachment is frequently the first concrete evidence of an age pattern, and it is often ignored because it looks like an administrative appendix.

Which claims can’t be waived, even if the agreement says they are?

Certain rights survive no matter what the paperwork states.

• You cannot be prohibited from filing a charge with the EEOC or the Maryland Commission on Civil Rights, or from cooperating with an agency investigation. A release can waive your right to collect money personally from such a charge, which is a meaningful distinction.
• Unemployment insurance benefits and workers’ compensation claims cannot be signed away by private contract.
• Claims based on conduct that happens after you sign are not released.
• Overly broad confidentiality and non-disparagement clauses can be unlawful for non-supervisory employees. The National Labor Relations Board held as much in its 2023 McLaren Macomb decision, finding that such terms interfere with rights protected by Section 7 of the National Labor Relations Act.
• The federal Speak Out Act, enacted in 2022, limits the enforceability of pre-dispute nondisclosure and non-disparagement clauses covering sexual harassment and sexual assault allegations.

What’s buried in the fine print that Maryland employees miss?

The release is rarely the only obligation. Watch for cooperation clauses requiring you to make yourself available for future litigation on the company’s behalf, no-rehire provisions that quietly bar you from every affiliate and subsidiary, confidentiality terms carrying liquidated damages, and arbitration clauses that apply to anything left unreleased.

Restrictive covenants deserve a hard look. Under Md. Code, Labor and Employment § 3-716, non-compete clauses are void as against public policy for employees earning at or below 150 percent of the state minimum wage. Higher earners are not automatically bound either, since Maryland courts assess whether the scope, duration, and geography are reasonable and whether the employer has a protectable interest.

Does accepting severance affect my unemployment benefits?

It can. When severance is allocated to a specific period following separation, the Maryland Department of Labor may treat those amounts as wages for the weeks covered, which delays or reduces benefits.

How the payment is structured and characterized in the agreement matters. So does timing on health coverage. Under COBRA you generally have 60 days from the qualifying event or notice date to elect continuation coverage, with up to 18 months available after a termination. Employer contributions toward those premiums are a routine negotiating point that costs the company less than additional cash.

What can I realistically negotiate?

More than the amount. Separation characterization, agreement not to contest unemployment, neutral or agreed reference language, extended COBRA contributions, release of a non-compete, mutual non-disparagement rather than one-sided, and the payment schedule are all commonly adjusted.

Leverage comes from the strength of the claim being released. If you were terminated shortly after requesting FMLA leave, reporting wage violations, or filing a discrimination complaint, the employer knows the timeline as well as you do. That is precisely why the packet arrived so quickly.

Have it reviewed before the clock runs out

Once the revocation window closes, the leverage is gone and the claim belongs to your former employer. Reviewing the agreement first costs you nothing but a few days of the review period you are already entitled to use.

If you have been handed a separation packet, speak with wrongful termination lawyers in Maryland before you sign, not after. A short consultation can tell you what the document releases, what it leaves open, and whether the offer on the table reflects what your claim is actually worth.