A Practical Guide to Settlement Agreements

A settlement agreement is a legally binding contract that ends the employment relationship on agreed terms. It typically includes a payment in return for the employee waiving any claims against the employer.

For the agreement to be valid, the employee must receive independent legal advice. The employer normally contributes towards the cost of that advice.

The key terms to focus on are the payment, the references, the restrictive covenants and the confidentiality wording. Each of these can have a real impact on what comes next.