Severance Negotiation

Maryland Severance Package Negotiation. What is a Severance Package?

A severance package or severance payment is an agreement usually made between an employer and an employee (or former employee) at the termination of the employee’s employment. In the typical scenario, an employer terminates, lays off or otherwise fires an employee and offers the employee a “severance” payment for leaving the company.

Severance payments can range between a few weeks pay, to hundreds of thousands or millions of dollars depending on the nature of the work of the employee, his or her position with the company (director, president, vice president, etc.) and the circumstances behind the termination of employment.

From the employer’s perspective, the severance package is a way to limit liability and protect key business interests, such as: trade secrets, confidentiality, non-competition, potential lawsuits, and other interests.

From the perspective of the employee, the severance package is a way to obtain financial security or payment for past years of service, potential legal claims against the company, important knowledge about the company or potential future competition with the company.

Severance packages (depending on the company) may contain significant substantive legal provisions that limit or describe the future legal and business opportunities for a departing Maryland employee. It is extremely important for a departing employee to a) understand the rights and benefits of a proposed severance offer and b) maximize his or her financial and strategic interests during the severance negotiation.

Are Maryland Companies Required to Provide Severance?

In Maryland, employers are not required to provide Maryland employees with a severance package. More often than not, severance packages are individualized contract negotiations when an employee is terminated and are not required by Maryland law. The two most important factors to determine whether a Maryland employee may be entitled to a severance package are a) whether there is a written company policy regarding the payment of severance and b) whether the employee has enforceable legal claims against the company.

Many Maryland companies present “take it or leave it” severance packages to departing or terminated employees and tell the employee that the severance package is pursuant to a “company policy.” However, this is often misleading. An experienced attorney can advise a Maryland employee about the application of company policy, whether the company should make an exception to its policy, and whether the employee is entitled to additional compensation that is not described in the company “policy.” For example, DK Associates, LLC has negotiated many severance packages for employers that provided for more financial compensation than the company originally offered or that was originally included in the “company policy.”

What are the Benefits of Hiring a Maryland Attorney to Negotiate a Severance Package

There are many benefits to hiring experienced employment counsel to negotiate a Maryland employee’s severance package. First, it is important to have legal counsel review the terms of the agreement and explain the benefits and drawbacks of the severance package. Many companies include overly restrictive, anti-competitive and sometimes, illegal, provisions in their first-offer severance packages.

Second, experienced employment counsel can advise a Maryland employee on the financial compensation offered by the Company and whether the employee may be entitled to additional compensation, benefits or less restrictive terms in the agreement.

Finally, employment counsel can negotiate on behalf of the employee. DK Associates has engaged in numerous negotiations with Maryland companies’ attorneys directly on behalf of clients. Such negotiations may lead to an increase in the financial compensation to the employee and/or additional benefits not originally offered by the company

What Maryland Laws Govern Severance Agreements?

In Maryland, severance packages may be subject to a complex web of Maryland and federal laws. However, at its core, a severance is a mutual contract between employer and employee and is subject to Maryland contract law. To determine what law governs a Maryland employee’s severance agreement, it is advisable to seek legal guidance.

Chevy Chase-Bethesda Employment Law Firm that Has Experience Negotiating Severance Packages and Severance Agreements

DK Associates, LLC has experience negotiating severance packages for Maryland employees in almost every industry. DK Associates, LLC has negotiated severance packages for employees with Fortune 500 companies, technology startups, biotechnology companies, retail, industrial, large government contractors, hospitals and other Maryland and national employers.

Although every case is different, DK Associates, LLC has successfully obtained significant increases of severance offers for its clients. If a Maryland employer hands you a severance agreement on the way out the door, it is advisable for you to contact an attorney as soon as possible.