Settlement Agreement: Its impact on getting a job

Many individuals choose not to pursue a workplace claim for a variety of reasons, even if they believe they have valid grounds. One of the most common reasons is that trying to resolve the problem may have an impact on their career, either now or in the future.

If they have been offered a settlement agreement as a method of closing a claim, they may be hesitant to accept it if they believe it will prevent them from finding work again.

Is it possible to negotiate your way out of a settlement agreement with your present or past employer? Is obtaining a job afterwards more difficult as a result of signing a settlement agreement?

What is a Settlement Agreement?

A settlement agreement is a legally enforceable contract used in civil cases. It shortens the time it takes to go to court and lowers the cost of litigation for both parties.

A trial does not take place in a settlement case. Instead, a mediation process is used to arrive at a settlement agreement. One person will agree to perform an action or pay a specific sum of money on the understanding that the other party will then cease any legal actions.

What effect does a Settlement Agreement have on future employment?

In most situations, the existence of a settlement agreement will have little effect on your ability to get another job.

However, some contracts may include limitations that prevent you from working for another employer for a specified length of time. In most situations, this will be a direct competitor who might utilise your knowledge and contacts to damage your former employer financially. These types of clauses are known as restrictive covenants, and your employer will not agree to a settlement agreement unless they are included.

In some cases, restrictive covenants may duplicate or reaffirm provisions that are already in your employment contract. You should examine your original contract to see whether what you’re being asked to agree to matches the terms outlined in it. An employer may ask that you conform to any restriction in your initial contract on occasion.

A restrictive agreement of this sort can make finding employment a difficult task. If you work in a specialised profession where openings are limited to a small number of employers, all of whom are competing with one another, this may be particularly true.

It’s a good idea to obtain legal advice before inserting any restrictive covenant. It must be reasonable, and it should not restrict you for an extended amount of time. Nor should it be so broad that you are unable to take up employment in any industry or field. It’s possible to negotiate a waiver of an existing restrictive agreement to allow you to take up work. This is a complicated area of law, and it’s important to have expert counsel on your side.

If you’re asked to make an agreement, you must state that you are not presently employed. This is because the amount of money paid to you might be determined on the condition that you would be unemployed for a certain length of time.

Is it necessary for my employer to provide a reference?

A settlement agreement will frequently have a provision that confirms your current employer’s consent to provide you with a reasonable recommendation. This may be beneficial in helping you find employment.

There is no legal obligation for your employer to give you a reference, and some contracts may even mention that they are only required to provide a ‘standard reference.’ When seeking for work, this will be a limited reference with only your job title and dates of employment listed.

If you didn’t receive a specific reference from your employer, you’re not required to get one. It’s critical that this is stated in the settlement agreement if you’ll need it for future employment because your employer isn’t under any legal obligation to provide one.

Is it possible to work for the same firm after a Settlement Agreement has been reached?

In most situations, a settlement agreement will be employed when a contract of employment is terminated, however this is not always the case. An employee and their employer may arrive at an agreement to assist them settle a work issue while they are still employed.

Settlement agreements can be used to resolve workplace harassment claims, employment discrimination, and any disputes concerning how a commission or bonus was determined. You may still be able to claim compensation even after the reasons for the conflict have been resolved.

For example, although the individual who harassed you may be dismissed, you may still be compensated for the emotional trauma they caused. In this instance, an ethical employer may wish to reach a settlement agreement that waives your right to seek future compensation in order to avoid litigation.

The Best Settlement Agreement Solicitors

Because of its binding nature, you’ll want legal assistance in order to make sure that what you agree is reasonable and doesn’t jeopardise your future prospects.

Freeman Jones has a team of specialist employment law attorneys with years of expertise. They can provide confidential assistance.

Ellen Hollington

Ellen Hollington is a freelance writer who offers to ghostwrite, copywriting, and blogging services. She works closely with B2C and B2B businesses providing digital marketing content that gains social media attention and increases their search engine visibility.