Settling Employment Disputes Toolkit

Practical Law Toolkit 7-617-6787 (Approx. 17 pages)

Settling Employment Disputes Toolkit

by Practical Law Labor & Employment

Maintained • USA (National/Federal)

Resources to help employers, employees, and their respective counsel settle employment-related lawsuits, administrative claims, and other employee claims. This Toolkit includes resources addressing drafting and negotiating settlement and separation agreements, releases of employee claims, and employment mediation. For state-specific resources, see Settling State Law Employment Disputes Toolkit.

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.
The 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 may happen at any time, the parties commonly broach settlement at key junctures, such as:

After an initial investigation but before starting formal discovery.
After document production but before any depositions are taken.
After the plaintiff's deposition but before any company executives are deposed, especially if the plaintiff's deposition reveals weakness in the plaintiff's ability or credibility as a witness.
After the close of discovery but before trial.
At the dispositive motion phase, such as following arguments on a summary judgment motion.
On the courthouse steps just before trial starts.
Following a verdict that one party has appealed.

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 separation agreements, the requirements for a valid release of employment claims, and the mediation of employment disputes. This Toolkit includes resources addressing federal law. For state specific resources, see Settling State Law Employment Disputes Toolkit.

Settling Employment Disputes Toolkit | Practical Law