November 8, 2022
A settlement agreement is made when a dispute is resolved between you and your company. There are certain things that your company can and cannot include. Be careful.
What your employer can include:
# 1 Waiver of Unknown Claims: Under California Civil Code section 1542, the company may ask you to waive the right to submit claims that you are not aware of at the time you settle.
# 2 Resignation: Your employer may include a requirement that you resign from your job.
# 3 Confidentiality. You can also agree not to disclose the amount of the payment you will receive and confidentiality regarding the details of the claims presented. (Except for claims of sexual harassment. Under California Code of Civil Procedure Section 1001, confidentiality cannot extend to the factual basis of the claim)
What your employer may NOT include:
# 1 Waiver of specific claims. There are specific claims that you cannot be forced to waive under the California Labor Code. They are related to wages and benefits and include:
- Outstanding unpaid wages
- Business expense reimbursement
- Unemployment insurance
- COBRA
- Compensation insurance
# 2 Prohibition to participate in administrative claims. Also, a settlement agreement cannot include prohibiting you from testifying and/or filing an administrative claim against the employer.
# 3 Ban on rehiring. Employers cannot include “no rehire” clauses in settlement agreements. Under section 1002.5 of the California Code of Civil Procedure, a settlement agreement cannot contain a provision that prohibits or prevents you from having future employment with the employer against whom you filed a claim (or any parent company, subsidiary, division, affiliate, or contractor of your employer). Said clauses would be considered void.
If you need help resolving an employment claim or have questions about settlement agreements, contact an employment law attorney.
