Massachusetts Court Enforces Waiver in Separation Agreement

Jackson Lewis reports that a recent federal district court decision in Massachusetts reinforces the viability of a carefully drafted separation agreement.

In Makarevich v. USI Insurance Services, LLC, the court dismissed a former employee’s claims of discrimination and unpaid wages after finding she had knowingly waived them by signing a Separation Agreement and General Release in exchange for benefits.

The ruling emphasizes that agreements written in language “understandable to the average individual” are more likely to withstand judicial scrutiny.

The dispute arose after Ellen Makarevich ended her employment with USI Insurance Services in June 2023. On her final day, she was presented with a proposed separation agreement and provided one week to review it.

She signed on June 23, 2023, affirming that she had received all wages due and waiving the right to pursue additional claims, including those under the Massachusetts Wage Act.

Despite this waiver, she later filed a charge with the Massachusetts Commission Against Discrimination, which was dismissed, and subsequently filed suit in state court. The case was removed to federal court, where the defendant sought dismissal.

The district court dismissed Makarevich’s pre-agreement claims with prejudice, holding that she had voluntarily and knowingly waived them.

The court stressed that the agreement expressly released claims arising before execution, including discrimination and wage claims, and clearly stated that no additional compensation was owed.

While her post-agreement claims were also found insufficient, the court permitted her to amend, given her pro se status.

The decision provides some concrete drafting lessons for Massachusetts employers. Their agreements should explicitly reference the Wage Act when releasing wage claims, use plain language, and include acknowledgments that all compensation has been paid.

All employers should provide employees adequate review time and ensure execution occurs after the final day of employment. These practices can strengthen enforceability and reduce exposure to litigation.