When would a Settlement Agreement be used?

Usually settlement agreements are suggested either when a claim has already been filed by an employee or when one is contemplated by the employee and/or anticipated by the employer. However, in some industries (such as investment banking) it is becoming increasingly common for settlement agreements to be offered to all exiting employees because it provides certainty to the employer.

Most often a settlement agreement will be suggested by the employer. This will be in the context of a “Without Prejudice” conversation or correspondence.