Settling Employment Disputes Toolkit

Resources to help employers and their counsel settle lawsuits and administrative claims brought by their employees and former employees. This Toolkit includes resources addressing drafting and negotiating settlement and separation agreements, releases of employee claims, and employment mediation.

Practical Law Labor & Employment

Many employment disputes are resolved using some form of negotiated compromise. Sometimes the employer and employee reach an agreement before any formal proceedings commence, typically in response to an informal complaint from the employee or a demand letter from an employee's counsel. In other cases, the employee has filed an administrative charge or civil lawsuit asserting a claim of discrimination or retaliation or other claim arising out of the employment relationship, often after the employment has ended.

There are many reasons employers settle employment claims rather than litigating them, including the:

  • Cost of defense.

  • Risk of an adverse jury verdict.

  • Concerns about key witnesses, such as witnesses who are:

    • no longer employed by the employer, especially if they left involuntarily; or

    • senior executives with difficult personalities or little time to prepare for litigation.

  • Distraction from the employer's primary business focus.

Although settlement can happen at any time, the parties commonly broach settlement at key junctures in a case, such as:

The parties also may consider participating in a voluntary mediation ( at any of these junctures.

This Toolkit provides many resources to help employers, employees and their respective counsel resolve employment disputes before trial. The Toolkit resources address drafting and negotiating settlement and severance agreements, the requirements for a valid release of employment claims, and the mediation of employment disputes. The Toolkit primarily addresses federal law, but includes state-specific resources as available.


Practice Notes


Standard Documents and Clauses




State Content


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