Massachusetts Makarevich: ‘Understandable’ Separation Agreement Language Aids Employer in Unpaid Wages Case

Takeaways

• For Massachusetts employers, separation agreements that use clear and understandable language are more likely to be enforced. In Makarevich v. USI Ins. Services, a Massachusetts federal district court relied on a clearly worded waiver in a separation agreement to dismiss a former employee’s claims of discrimination and unpaid wages under the Massachusetts Wage Act.
• Agreements releasing Massachusetts Wage Act claims are more likely to be enforced if they use clear and understandable language and explicitly refer to the statute.
• Employers should consider consulting counsel to review the enforceability of severance or separation agreement templates.

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• Makarevich v. USI Ins. Services, LLC

Article

In Makarevich v. USI Ins. Services, LLC, a Massachusetts federal district court judge dismissed a former employee’s claims of discrimination and unpaid wages under the Massachusetts Wage Act, concluding that she had knowingly waived them by signing a clearly worded Separation Agreement and General Release (“Separation Agreement”) in exchange for certain separation benefits. No. 1:25-cv-10434-JEK (D. Mass. July 14, 2025). Makarevich highlights the importance of using unmistakable language “understandable to the average individual” to ensure the enforceability of a release.

Background

The plaintiff, Ellen Makarevich, worked for USI Insurance Services, LLC, until June 8, 2023. USI offered Makarevich a proposed Separation Agreement on her last day of employment, which she received one week to review. Makarevich signed the Separation Agreement on June 23, 2023 (“Effective Date”) in exchange for separation benefits.

By signing the Separation Agreement, Makarevich agreed to waive her right to bring claims for unpaid wages under the Massachusetts Wage Act, among other claims. In doing so, she expressly affirmed that USI owed her no wages or compensation of any kind as of the date the Separation Agreement was executed.

Despite releasing claims arising from her employment in the Separation Agreement, Makarevich later filed a Charge of Discrimination with the Massachusetts Commission Against Discrimination (MCAD). After the MCAD concluded that she had waived her rights by signing the Separation Agreement and dismissed the Charge, Makarevich filed suit in Middlesex Superior Court, alleging discrimination and unpaid wages for work between March 1, 2022, and Jan. 29, 2025. USI removed the case to the Massachusetts District Court, where USI moved for judgment on the pleadings with respect to Makarevich’s discrimination and unpaid wages claims.

Decision

The district court dismissed with prejudice Makarevich’s claims for discrimination and unpaid wages that predated the Effective Date based on her execution of the Separation Agreement. The court emphasized that, by signing the Separation Agreement, Makarevich affirmed she had read and understood its contents, had ample opportunity to review it, and signed it voluntarily. On Makarevich’s discrimination claims, the court highlighted that she had agreed to “release, waive, and forever discharge” all claims against USI “regarding any matter arising on or before the date of [her] execution of [the] Agreement,” which included, but was not limited to, claims arising under federal and state antidiscrimination laws.

The court similarly concluded that Makarevich had waived her right to pursue unpaid wages predating the Effective Date. It reasoned that Makarevich had expressly acknowledged receiving full compensation as of the date of execution, which included “all wages, commissions, bonuses, sick pay, personal leave pay, severance pay, vacation pay, or any other form of remuneration.” Based on this language, the court deemed the waiver “clear and unmistakable” and “understandable to the average individual,” making it enforceable even without an explicit reference to the Massachusetts Wage Act.

Turning to Makarevich’s post-Effective Date claims, the Court ruled her complaint lacked sufficient factual allegations to support a claim for relief.  Based on Ms. Makarevich’s pro se status, the Court allowed her to file an amended complaint for those allegations.

Key Takeaways for Employers

Makarevich serves as an important reminder for employers to carefully review and update their severance and separation agreement templates to ensure enforceability. Specifically, employers should:

• Ensure that any release of claims under the Massachusetts Wage Act is clearly and explicitly stated, using language that is easily understandable to the average employee.
• Provide employees with adequate time to review proposed agreements in accordance with state and federal law.
• Clarify that employees should not execute severance or separation agreements until after their last day of employment, absent unique circumstances.

If you have questions about the enforceability of your company’s severance or separation agreement templates, please contact a Jackson Lewis attorney.