Session 52
EMPLOYEE SETTLEMENT AGREEMENTS
June 20-23, 2001
Susan Westover
The California State University
Long Beach, CA
This session addresses contemporary issues in negotiating employee settlement agreements,
including voluntary provision of references or recommendations, non-reemployment provisions,
confidentiality, no comment provisions, and the interplay of open records acts for public
universities, attorney fees, and other tricky points, such as the scope of the release.
I.
References and Recommendations
Frequently, an employee who is negotiating his/her severance or settlement agreements requests
that the employer provide a reference or recommendation letter to assist the employee in his/her
future job search. Not infrequently, the employee requests a more glowing reference that he/she
deserves—at least in the employer’s opinion. Employers should be cautioned against crafting a
reference letter that is anything less than completely truthful, since more and more jurisdictions
are imposing liability for misleading reference letters which either puff, mislead, or outright fib.
A.
Recognizing Potential Liability for Reference Letters
Employers who provide references for former employees face potential liability for resulting
injuries or damages incurred by prospective employers and/or third persons. Many employers
therefore typically adopt "no comment" or “name/rank/serial number only” policies regarding
references. While courts have not yet imposed an affirmative duty to respond to reference
inquiries, employers who voluntarily prepare employment references or otherwise choose to
respond to requests for employment references may be held liable for negligent misrepresentation
based on misleading or incomplete statements made in such references.
B.
Cases Establishing Liability For Providing References
In a number of cases, courts found that employers owed a duty of care to third parties in making
representations regarding a former employee's character and qualifications that present a
substantial, foreseeable risk of physical injury to third persons.
In Randi W. v. Muroc Joint Unified School Dist., 14 Cal. 4th 1066, 60 Cal. Rptr. 2d 263, 929
P.2d 582 (1997), the California Supreme Court held that a former employer could be held liable
for negligent misrepresentation. Even though the court did not recognize an affirmative duty to
respond to requests for references regarding former employees, the court recognized a duty to
respond fully and honestly after voluntarily undertaking to provide such references.
The court determined that a vice principal's sexual assault on the plaintiff was a reasonably
foreseeable result of his former employers' unreserved recommendations for his employment as a
school administrator. One defendant had made a detailed recommendation that asserted, "I
wouldn't hesitate to recommend the employee for any position!" even though the employer knew
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of several instances of the employee's sexual misconduct against students while he was employed
by the employer's school district. Another defendant stated that he would recommend the
employee "for almost any administrative position he wishes to pursue," despite the fact that the
employee had been forced to resign from his position with that employer after being accused of
making sexual overtures to several students. Officials in the school district also recommended
the employee "without reservation" for a school administrative position, although disciplinary
actions had been taken against him regarding sexual harassment claims. None of these
recommendations mentioned the employee's sexual misconduct known to the former employers.
The court found that the defendants could foresee that, had they not glowingly recommended
him, the employee would not have been employed by another school district, where he might
injure other victims. The court also found the defendants liable for fraud, since the district
officers knew that their statements were likely to induce the employee's hiring and placement in a
similar position.
The court applied general tort principles in recognizing a duty existed, considering factors such
as foreseeability, moral blame, the extent of the burden to the defendants, and public policy
considerations. The court found misrepresentation of an employee's known dangerous
propensities was morally blameworthy, and the imposition of a duty to not misrepresent negative
material information in employment references did not place an unreasonable burden on the
defendants, given the alternative courses of conduct available, including offering "no comment"
to reference requests or limiting the response to basic employment information regarding the
former employee. The obligation imposed by the court only requires employers that undertake to
provide information in employment references to disclose all other facts that may qualify the
disclosure or mitigate the praise contained in the letters. The former employers were liable for
misrepresentations or nondisclosures in their employment references, where they issued
unreserved and unconditional praise without mentioning the prior sexual misconduct charges.
(“Although policy considerations dictate that ordinarily a recommending employer should not be
held accountable to third persons for failing to disclose negative information regarding a former
employee, nonetheless liability may be imposed if, as alleged here, the recommendation letter
amounts to an affirmative misrepresentation presenting a foreseeable and substantial risk of
physical harm to a third person.”)
The lessons employers learned from Randi W., a seminal case that has been cited by many other
jurisdictions, include that: (1) the writer of a recommendation letter owes to prospective
employers and third persons a duty not to misrepresent the facts in describing the qualifications
and character of the former employee, if making the misrepresentations would present a
substantial, foreseeable risk of physical injury to the prospective employer or third persons; (2)
the former employers owed a duty to the plaintiff student not to misrepresent the qualifications
and character of the administrator who allegedly committed the assault; (3) letters from the
administrator's former employers made affirmative misrepresentations by positively evaluating
the administrator's character and rapport with students without disclosing that disciplinary
actions had been taken against him for alleged sexual misconduct with students; and (4) the
student was not required to allege that she herself relied on the employer's misrepresentations,
but only that her injury resulted from action taken by the recipient of the misrepresentations in
reliance on them.
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In Golden Spread Council, Inc. No. 562 of the Boy Scouts of America v. Akins, 926 S.W.2d 287
(Tex. 1996), a boy scout sued the Boy Scouts of America and the local boy scout council after
the scout was allegedly sexually molested by a scoutmaster. The Texas Supreme Court held that
the local boy scout council owed a duty to the potential troop sponsor that asked the council to
introduce it to a potential scoutmaster. This duty extended to children and parents involved in
the troop who relied on the council's recommendation. The council's affirmative act of
recommending the scoutmaster created a duty to use reasonable care in light of information the
local council had received about the scoutmaster's alleged prior conduct with other boys.
In Fluid Technology, Inc. v. CVJ Axles, Inc., 964 P.2d 614 (Colo. Ct. App. 1998), the court
imposed a duty to exercise reasonable care in giving an employment reference. The plaintiff
alleged that its bookkeeper, who had previously been employed by the defendant, stole money
from the plaintiff. Before the plaintiff hired the employee, the defendant had supplied the
plaintiff with false information about the employee's job performance. When the plaintiff
conducted an employment reference check, the defendant gave a positive recommendation,
indicating that the employee had worked for it for three years and had been a "fine employee,"
when in reality, the defendant had terminated the employee for stealing from it and the employee
had been convicted for that theft. The plaintiff further alleged that the defendant had provided
this false information to the plaintiff in the ordinary course of its business, that based on this
misrepresentation from the defendant the plaintiff had hired the employee, and that plaintiff was
damaged when the employee embezzled its funds. The court found that one who, in the course
of business, profession, or employment, or in any other transaction in which that person has a
pecuniary interest, supplies false information for the guidance of others in their business
transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance
on the information, if that person fails to exercise reasonable care or competence in obtaining or
communicating the information.
C.
Cases Rejecting Liability Based On References
Other jurisdictions differ, and do not impose liability or a duty to disclose adverse information
concerning former employees in employment references.
In Francioni v. Rault, 518 So. 2d 1175 (La. Ct. App. 4th Cir. 1988), writ denied, 521 So. 2d 1189
(La. 1988), the court held that a murderer's former employer could not be held liable for the
victim's death, despite its failure to disclose the murderer's known criminal tendencies, when
contacted by an employment agency seeking employment information, since, unless
responsibility is assumed, one has no duty to protect others from the criminal activity of third
parties. The court found that the employer, in responding to a request to verify dates of
employment, did not have a duty to disclose that the former employee had been discharged for
embezzling company funds. The court held that even if the initial employer had a duty to
disclose the discharged employee's employment history to the subsequent employer, the risk that
the employee would murder a coworker was not foreseeable.
In Murdock v. Higgins, 454 Mich. 46, 559 N.W.2d 639 (1997), the court held that a supervisor
was not liable for injuries to a minor who was sexually assaulted by the supervisor's former
employee, since the supervisor had no affirmative duty to inform the subsequent employer of the
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former employee's dangerous propensities or prior sexual misconduct. The court found that the
supervisor did not have a "special relationship" that would give rise to a duty to protect plaintiff
from harm by the employee. The court held that while an employment relationship could form
the basis for a special relationship, former employment or supervision did not, and absent a
special relationship the supervisor had no affirmative duty to inform the subsequent employer or
department of the employee's dangerous propensities.
In Moore v. St. Joseph Nursing Home, Inc., 184 Mich. App. 766, 459 N.W.2d 100 (1990), the
court concluded that a former employer has no duty to disclose an applicant's dangerous
propensities to prospective employers. In reaching its decision, the court weighed the competing
policy considerations at stake, placing great importance on the confidentiality of employment
records. The court concluded that the attack on and death of the plaintiff was the tragic,
unforeseeable result of the former employee's random criminal conduct, and therefore the former
employer's failure to disclose the killer's history of violent conduct was not the proximate cause
of the victim's death. Thus, dismissal was affirmed on the ground that a former employer has no
duty to disclose a former employee's violent conduct to a prospective employer, even though the
employee had received 24 disciplinary warnings.
In Neptuno Treuhand-Und Verwaltungsgesellschaft MBH v. Arbor, 295 Ill. App. 3d 567, 692
N.E.2d 812 (1998), the court held that a fraudulent concealment claim could not be based on a
letter of reference stating that the supervisor knew the former employee personally for over 13
years, that the former employee was an active full member of the Chicago Board of Trade, and
that the former employee “was always proven to be an intelligent industrious and innovative
young man,” while omitting that employee was disciplined for trading violations, even though
the trader caused his new employer to lose millions of dollars shortly after his hiring. The court
expressly declined to use this case to recognize a cause of action for "negligent referral." In
addressing the claim that the former employer should have disclosed the disciplinary actions in
the letter, the court held that neither the former employer nor its chairmen could be held liable for
the hiring employer's losses absent a "special relationship." Given that the sole contact between
the parties was the letter of reference, the court reasoned that such a relationship did not exist.
The court also deemed that the plaintiff's reliance on the defendant's letter in hiring the employee
was not reasonable, since the plaintiffs could have discovered the disciplinary actions before they
hired the employee.
In Janssen v. American Hawaii Cruises, Inc., 69 Haw. 31, 731 P.2d 163 (1987), a former
employee of a cruise line who had been sexually assaulted by another former employee sued the
former employer and the union that had referred the attacker for employment. The Hawaii
Supreme Court held that the union's contractual duty to refer prospective employees did not
obligate it to investigate or screen applicants, and thus the union owed no such duty to the person
attacked and no duty existed between the former employer and the person attacked.
D.
No Protection From Liability Under Qualified Immunity Statutes
California, like other jurisdictions, provides a statutory privilege which extends to good-faith
employment references given upon request of prospective employers, but this privilege usually
only protects against defamation actions brought by former employees. See, e.g., Cal. Civ. Code
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§ 47(c). These statutory privileges usually only provide qualified immunity to statements made
in good faith and without malice. California courts have held that this type of privilege does not
provide any protection to claims by third parties for negligent referrals. Randi W., supra.
E.
Additional Sources of Information
For more comprehensive reviews of state and federal cases considering whether, and under what
circumstances, a former employer may be held liable to a subsequent employer or third person
resulting from the former employer's intentional, reckless, or negligent misrepresentation or
failure to disclose, in an employment reference or recommendation, adverse information
concerning its former employee (such as poor performance, disciplinary measures, harassment
complaints, etc.), see Comment: The Tug-of-War with Employment Information: Does Louisiana
Revised Statutes 23:291 Really Help Employers Stay Out of the Mud?, 58 La. L. Rev. 1131
(1998); Note: Employment Law-An Employer's Duty to Third Parties When Giving
Employment Recommendations-Davis v. Board of County Commissioners of Dona Ana County,
30 N.M. L. Rev. 307 (2000); Comment: Speak No Evil: Negligent Employment Referral and the
Employer's Duty to Warn (Or, How Employers Can Have Their Cake and Eat It Too), 22 Seattle
Univ. L. R. 265 (1998); Note: Opening the Channels of Communication Among Employers: Can
Employers Discard Their "No Comment" and Neutral Job Reference Policies?, 33 Val. U.L. Rev.
687 (1999); Note: Tort Law - No Duty To Protect A Minor Endangered By A Third Party Or A
Duty For A Former Employer To Disclose Dangerous Actions Or Violent Tendencies Of A Past
Employee To A Prospective Employer Absent A Showing Of A Strong Special Relationship, 78
U. Det. Mercy L. Rev. 147 (2000); Beyond Name, Rank, And Serial Number: "No Comment"
Job Reference Polices, Violent Employees And The Need For Disclosure-Shield Legislation, 5
Va. J. Soc. Pol'y & L. 287 (1998); Encouraging Employers to Abandon Their "No Comment"
Policies Regarding Job References: A Reform Proposal, 53 Wash & Lee L. Rev. 1381 (1996);
Note: Addressing The Cloud Over Employee References: A Survey Of Recently Enacted State
Legislation, 39 Wm. & Mary L. Rev. 177 (1997); Saxton, Flaws in the Laws Governing
Employment References: Problems of "Overdeterrence" and a Proposal for Reform, 13 Yale L. &
Pol'y Rev. 45 (1995); K. Dosanjh, Former Employer's Tort Liability To Prospective Employer
Or Third Person For Misrepresentation Or Nondisclosure In Employment Reference, 68
A.L.R.5th 1.
F.
Recommended Practice
Because the potential for liability arises from giving anything less than completely honest
reference letters, employers should generally refrain from providing glowing reference letters in
conjunction with a severance or settlement agreement. Unreserved and unconditional praise,
especially where skeletons may lurk in the closet, may lead to trouble. In short, any reference
letter should be carefully drafted with a healthy dose of the truth, or else otherwise avoided.
Additionally, a firm practice or policy against providing references may also assist in the defense
of a later retaliation claim based on the contention that the employer’s refusal to give a good
reference—or the giving of a poor one—was done in retaliation for the employee’s protected
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activities. See Ruedlinger v. Jarrett, 106 F.3d 121 (7th Cir. 1997); Hashimoto v. Dalton, 118
F.3d 671 (9th Cir. 1997); Robinson v. Shell Oil Co., 519 U.S. 337, 136 L. Ed. 2d 808, 117 S. Ct.
843 (1997). If the employer does not provide references for any employee, it will be difficult for
a terminated employee to later claim that he/she was singled out for retaliation when the
employer, consist with its established practice, refuses to give a reference for him or her.
II.
Non-Reemployment Provisions
It is becoming increasingly more common for employers to demand that departing or terminated
employees, when accepting financial consideration to settle claims, enter into non-reemployment
provisions where they promise to never seek employment with that particular employer again. In
essence, the employer is seeking preclude the possibility of future retaliation claims when/if the
employer refuses to rehire the employee after the case is dismissed. Sample “don’t darken our
doorsteps again” provisions include:
[PLAINTIFF] further acknowledges and agrees that, after the date of the execution of this
agreement, he/she will not apply for work with, or work for, [EMPLOYER] in any
capacity.
[PLAINTIFF] agrees that he/she will at no time seek or accept employment with
[EMPLOYER], and does so solely for purposes of settling this action.
But as these provisions are more thoroughly analyzed and critiqued by the plaintiff’s bar, it is
foreseeable that they may be challenged as impermissible attempts to “legalize” retaliation.
Public policy grounds may be argued in support of finding these provisions unenforceable,
following on the heels of challenges to retaliatory reference-giving.
Under virtually all state and federal anti-discrimination statutes, it is unlawful to retaliate against
an employee or former employee for protesting unlawful employment practices. Title VII of the
Civil Rights Act, for example, states in relevant part:
It shall be an unlawful employment practice for an employer to discriminate
against any of his employees or applicants for employment ... because he has
opposed any practice made an unlawful employment practice by this subchapter,
or because he has made a charge, testified, assisted, or participated in any manner
in an investigation, proceeding, or hearing under this subchapter.
42 U.S.C. § 2000e-3(a). The ADEA has a substantially similar anti-retaliation provision. 29
U.S.C. § 623(d). Anti-retaliation provisions apply to current and former employees. Robinson v.
Shell Oil Co., 519 U.S. 337, 136 L. Ed. 2d 808, 117 S. Ct. 843 (1997).
As briefly discussed above, courts have held that it is a violation of Title VII for an employer to
retaliate against a former employee by giving derogatory references to subsequent employers.
Robinson v. Shell Oil Co., 519 U.S. 337, 136 L. Ed. 2d 808, 117 S. Ct. 843 (1997). While
Robinson was focused on retaliatory references, the cases that preceded it did not expressly limit
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their holdings to retaliatory reference-giving. For example, in Veprinsky v. Fluor Daniel, Inc., 87
F.3d 881 (7th Cir. 1996), the court used fairly sweeping language to proclaim that “posttermination acts of retaliation that adversely affect the plaintiff's employment opportunities or are
otherwise related to employment are cognizable under Title VII.” In Veprinsky, the plaintiff did
not only complain about his former employer providing false reference information to his
subsequent employer; he also alleged that his former employer retaliated against him by refusing
to consider him for another position.
A complete bar against future reemployment may constitute an act that adversely affects a
plaintiff’s employment opportunities. This legal issue is in its young stages of development;
there are very few cases addressing this particular issue, such as Veprinsky, supra, and none face
it head on. While states like California generally disapprove of restrictions on an employee’s
ability and right to seek employment—for example, by making most non-compete agreements
void as against public policy—a number of other jurisdictions favor the employer’s position.
And in those states that disfavor restrictions on employment, it does not matter that the employee
has agreed to the restriction in writing. More focused litigation of this issue should be expected
in the near future.
An additional factor to consider is that public universities requesting a non-reemployment
provision may be seeking to bar all employment with the particular state, even though it may be
the largest employer within its boundaries. The broader the scope of the agreement, the more
likely it may find to violate a given state’s public policy.
In sum, while it still remains a valuable provision in an employer’s defense against future
retaliation claims, the viability of the non-reemployment provision may be in question as the law
of retaliation continues to develop and expand.
III.
Confidentiality, No Comment Provisions, And The Interplay of Open Records Acts
A standard provision in the compromise of employee claims is the confidentiality provision
where both sides explicitly promise not to reveal any of the details of their settlement agreement.
Such a provision should include a specific promise not to publicize the results of the case (and
the agreement should be signed by the attorneys as well as the parties so that plaintiff’s counsel is
precluded from advertising the amount of consideration in jury verdict/settlement reports), as
well as an agreed-upon “response” the parties should be free to give if questioned about the
matter. A sample provision is:
[PLAINTIFF’S NAME] and his attorneys shall keep confidential and disclose to
no person or organization the terms of this agreement except as legally required to
prepare and file tax returns or to enforce the terms of this agreement.
[PLAINTIFF’S NAME] and his attorneys further agree, jointly and individually,
that they will not initiate any contact with any news or other media representative
regarding the action or the resolution of the action. In the event [PLAINTIFF’S
NAME] or any of his attorneys are contacted by any individual, or any news or
other media representative regarding the action or the resolution thereof, neither
plaintiff nor his attorneys will provide any comment other words to this effect:
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"The matter has been amicably resolved by a settlement with terms agreeable to
both sides."
Additionally, confidentiality provisions often include liquidated damages if either side breaches.
It is crucial to check the law of the particular jurisdiction for its approach to the viability of any
such liquidated damages provision, for they may have to be quite narrow to be enforceable. A
liquidated damages provision should be carefully drafted to comply with the requirements of the
particular jurisdiction, so a generic provision has not been included here.
For private colleges and universities, entering into confidentiality provisions may be routine. For
public colleges and universities, however, confidentiality agreements may be futile in light of
open records acts which, absent an exception, make all public records available for inspection by
any member of the public. See, e.g., California’s Public Records Act (Cal. Gov’t Code § 6250, et
seq.). While most open records acts exempt personnel records from disclosure, an employee
settlement agreement typically would not fall within that exemption. Public entities, therefore,
may not be legally permitted to guarantee complete confidentiality. Less restrictive provisions,
however, may be permissible, such as “no comment” provisions under which both sides agree
not to discuss or publicize the result. Just as some confidentiality provisions contain exceptions
for disclosures required by law—for example, as in response to the issuance of a subpoena duces
tecum—it may be appropriate to draft an exception for a disclosure required by an open records
act. The parameters of the various states’ open records acts are beyond the scope of this article,
and local law should be consulted prior to promising confidentiality.
Finally, another consideration on the horizon is that in the wake of highly publicized products
liability and securities fraud cases, many state legislatures are introducing bills to bar the use of
secret settlement agreements. Many such bills would prevent parties from forcing their
opponents to sign confidentiality agreements as a condition of settlement unless such disclosure
would reveal trade secrets or otherwise disclose privileged information. Counsel should stay
abreast of pending legislation in this area.
IV.
Attorney Fees
Under state and federal anti-discrimination statutes, the prevailing plaintiffs are generally entitled
to attorney fees. It is imperative, thus, to specifically include in a settlement agreement a
provision that the parties will pay their own attorney fees and costs. While such a provision
should be specifically tailored to the statutes upon which the case is based, the general
framework for this provision should include the following:
The parties shall each bear their own costs, expenses and attorney fees in
connection with the released claims, the civil action, and this settlement. The
parties further agree that in any action arising out of enforcing this agreement, the
prevailing party shall be entitled to recover reasonable attorney fees and costs.
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V.
Other Tricky Points
A.
Release and Waiver
1.
Identify The Claims
It is very important to draft a detailed release specifically describing the types of claims that are
being released. Suggested language is:
The parties hereby forever mutually release, acquit and discharge each other, their
officers, agents, employees, and insurers from any and all claims, rights, demands,
costs, attorney fees, damages, actions and causes of action of every kind and
nature, known or unknown, relating to [PLAINTIFF’S NAME]’s employment
with and termination of employment from [EMPLOYER’S NAME], including but
not limited to those claims set forth in the Action. Further, in consideration of the
within promises, agreements and obligations, including the execution of this
Agreement, the parties for themselves and their respective relatives, heirs,
successors, assigns, attorneys, agents and representatives, do hereby fully release
and forever discharge the [EMPLOYER’S NAME AND RELATED ENTITIES],
and each other, and each of their respective relatives, heirs, successors, assigns,
attorneys, agents, officers, directors, partners, servants, insurers, constituent
universities, representatives and all persons acting by, through, under or in concert
with any of them (hereinafter “Released Parties”) and each of them, past, present
and future, from all complaints, actions, causes of action, in law or equity, suits,
grievances, administrative claims, attorneys’ fees, debts, liens, demands, damages,
sums of money, costs, expenses, agreements, promises, obligations or liabilities of
any kind or nature whatsoever, whether known or unknown, fixed or contingent,
suspected or unsuspected, which they may have or claim, in the past, present or
future, including but not limited to any and all charges or complaints of
harassment and/or discrimination filed by [PLAINTIFF’S NAME] against the
Released Parties, and any state, federal or administrative agency, including the
[STATE ANTI-DISCRIMINATION STATUTE, such as California Fair
Employment and Housing Commission] and/or the U.S. Equal Employment
Opportunity Commission against the Released Parties arising out of or pertaining
to the Action and [PLAINTIFF’S NAME]’s employment at [EMPLOYER’S
NAME] up to and including the Effective Date of this Agreement. It is
understood and agreed that this Agreement is the compromise of a doubtful and
disputed claim, and that the payment made is not to be construed as an admission
of liability on the part of the party or parties released.
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2.
Incorporate Unknown Claims
Many jurisdictions, including California, require that a release of unknown or unanticipated
claims is not effective absent a specific acknowledgment of such. See, e.g., Cal. Civ. Code §
1542. As such, counsel drafting a release must check the specific requirements of the applicable
jurisdiction. In California, suggested language is:
This Agreement shall apply to all unknown and unanticipated claims and damages
arising from or pertaining to acts and occurrences which are the subject matter of
the Action and/or [PLAINTIFF’S NAME]’s employment with [EMPLOYER’S
NAME] up to the Effective Date of this Agreement. [PLAINTIFF’S NAME]
expressly waives and relinquishes any and all rights and benefits which he may
have under or which may be conferred upon him by California Civil Code § 1542,
which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH
DEBTOR.
B.
ADEA Release
For employees age 40 and over, the Older Workers Benefit Protection Act of 1990 provides
special requirements for releasing claims under the Age Discrimination in Employment Act
(“ADEA”) (29 U.S.C. § 621, et seq.). The settlement agreement should specifically include
language (1) that plaintiff was given at least 21 days to consider an unexecuted copy of the
agreement, (2) that he/she understands all terms of the agreement, (3) that the employer advised
plaintiff to consult with an attorney prior to executing the agreement, (4) that the plaintiff
warrants and represents that he/she did indeed consult with an attorney regarding all the terms
and conditions of the agreement before executing it, (5) that he/she specifically waives all rights
or claims he/she has against the employer under the ADEA (cite the exact provisions) as a result
of his/her employment, (6) that the waiver of any ADEA claims is in exchange for the
consideration recited in the agreement, (7) that he/she will have 7 days to revoke the agreement
after executing it, and (8) that the agreement will not be effective or enforceable until 7 days after
its execution.
C.
Workers’ Compensation
Class action issues aside, the parties in employment litigation are free to settle their disputes on
terms they deem appropriate, without judicial intervention or approval. However, in a number of
jurisdictions (including California), if the employee has also filed a claim for workers’
compensation benefits, the approval of the appropriate administrative agency (such as a workers’
compensation administrative law judge) is required in order to dispose of that claim in addition
to the contract or tort theories at issue in the civil suit. Thus, the settlement should be
conditioned on receiving approval from the administrative body.
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