If you’re pursuing or considering an employment law claim—whether for discrimination, harassment, wrongful termination, or unpaid wages—there’s a good chance your case will settle before trial. In fact, most employment disputes resolve through negotiation rather than courtroom litigation. When that time comes, it’s critical to understand what you can (and should) ask for in a settlement—not just the dollar amount.
Here are some key components employees may request in a settlement:
1. Monetary Compensation
The most obvious part of any settlement is financial compensation. This may include
- Back pay: Wages, benefits, or bonuses you should have received.
- Front pay: Compensation for lost future earnings, especially if reinstatement isn’t possible.
- Emotional distress damages: Common in cases involving discrimination, retaliation, or harassment.
- Liquidated or punitive damages: In wage claims or particularly egregious conduct, these may be available.
- Attorney’s fees and costs: In many employment statutes, the employer may be required to pay your legal fees as part of settlement or court order.
2. Non-Monetary Terms
Often just as important as the money are the non-monetary provisions. These can protect your reputation, your career, and your peace of mind going forward. Consider asking for:
- Neutral reference or verification-only reference: Instead of risking a bad reference, negotiate that the employer will confirm only dates of employment and position held—or provide a mutually agreed-upon reference letter.
- Non-disparagement clause: Prevents the employer from making negative statements about you to others, including prospective employers.
- Confidentiality of the dispute: You may want to limit who can know the details of the allegations or settlement, especially if the situation was sensitive.
- Job reinstatement or resignation in lieu of termination: In some cases, employees want to return to work or negotiate a resignation for purposes of their record.
- Retaliation protection: You may want an agreement that prohibits the employer from retaliating against you for asserting your rights or filing a charge.
3. Other Considerations
A well-crafted settlement can also include:
- Health insurance continuation: Sometimes through extended COBRA benefits or direct employer contribution.
- Outplacement services or career coaching: Helpful if you’re transitioning to a new industry or need help with the job search.
- Tax allocation: Depending on the components of your settlement, you may want to negotiate how various payments are reported (e.g., wages vs. non-wage compensation).
- Waiver of future claims (with limits): While most employers will require you to waive your right to sue again over the same issues, be wary of overly broad waivers that might impact future rights or claims not yet known. Such waivers are often deemed unenforceable.
Final Thought
Every employment law settlement is unique, just like every job and every workplace. While financial compensation is important, don’t overlook the value of negotiating terms that protect your future, preserve your dignity, and ensure a clean break. An experienced employment attorney can help you evaluate what’s fair—and what’s possible—and negotiate a resolution that works for you.