Settlement Agreements

Settlement Agreements – Top 5 Important Questions

A Settlement Agreement (formally known as a Compromise Agreement) is a document which records an employee’s agreement not to bring any employment-related claims against an employer. This is the main purpose of a Settlement Agreement. However, Settlement Agreements often go much further than just waiving employment rights and will often include other clauses and obligations which an employee might not be expecting. 

If you sign a Settlement Agreement, it is important that you understand exactly what you are agreeing to so that you do not inadvertently act in breach. Doing so could lead to serious consequences.

As specialist settlement agreement solicitors we will thoroughly review your agreement and advise you on the potential consequences. We set out below some of the questions you should consider.

Does the Settlement Agreement require me to update my social media accounts including Linkedin?

Often, a Settlement Agreement will include an express clause that the employee will not “hold themselves out” as still being employed by the employer after they have left. By failing to update your social media accounts to reflect the fact that you have left, you could be in breach of this clause. In some circumstances (particularly for those in sales roles) the Settlement Agreement may go further and include a clause stating that you will delete from your social media accounts any contacts you obtained in the course of your employment.

Will having a job offer affect the Settlement Agreement?

Settlement Agreements will sometimes contain a clause that the employee has not accepted or received an offer of employment. Some Settlement Agreements go even further and state that the employee has no expectation of a job offer. These clauses are often unexpected and can cause issues. It is important they are carefully drafted to ensure that you are not in breach. As specialist settlement agreement solicitors we can advise how best to deal with these types of clauses.

If I sign a Settlement Agreement, will I continue to be bound by the restrictive covenants/post-termination restrictions in my employment contract?

Often, the Settlement Agreement will re-state or explicitly refer to the relevant clauses of your employment contract which continue to apply even after you have left, such as any non-complete clauses. However, they don’t always and in these circumstances, you will need to take advice on whether these restrictive covenants/post-termination restrictions will still apply and how best to deal with them. 

Who can I tell about my Settlement Agreement?

Usually, Settlement Agreements contain strict clauses about who you can talk to about your Settlement Agreement. Often, these go so far as to say that you to not even mention the existence of the Settlement Agreement or the circumstances leading up to it. These are important and employers tend to take breaches of such clauses extremely seriously. You will often want to speak to others such as your immediate family or a prospective employer about the situation you find yourself in. As specialist settlement agreement solicitors we can advise you on your obligations and suggest amendments to the wording of these clauses.

If I sign a Settlement Agreement will I have to withdraw my Subject Access Request?

Some employees may have made a Subject Access Request prior to being offered a Settlement Agreement. Often Settlement Agreements contain a clause whereby the employee agrees to withdraw any current Subject Access Requests and to not bring any further Subject Access Requests in the future. This is currently untested in the courts, but as specialist settlement agreement solicitors we can advise you of the risks of such a clause.

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