Worried about clauses in settlement agreement - what to do?

SChitmehard

Hi all,

My friend has got a settlement agreement offered but is worried about some of the clauses, especially 1.3 below: 

1)  In the event that any proceedings are commenced against the Respondent by the Claimant or the Claimant breaches any other obligation in the agreement, the Claimant undertakes to: 

 1.1 Indemnify the Respondent in respect of any legal costs, penalties, awards in defending against such proceedings including any award made by a  Employment Tribunal in the Claimant's favour

 1.2 Indemnify the Respondent in respect of any legal costs  incurred in enforcing terms of this agreement. 

 1.3 Indemnify the Respondent in respect of the payment of the settlement sum of £8,000 and agree to pay it to the Respondent  immediately if requested.

He is worried that the employer could "make up a reason" and say that he broke one of the clauses of the agreement and use that as an excuse to get the £8k back off him under clause 1.3. If he tried to fight it, he would have to pay the employers legal costs due to clause 1.2 and so even if the employer could not recover the £8k they could run up legal bills for my friend to a similar amount using clause 1.2.

This 1.3 seems very harsh to me, as they are buying his silence for £8k but could easily take it off him, and even if they don't manage that, they can hit him with legal bills to a similar amount so what is the point of him accepting such an agreement?

Does anyone have any experience / views on this or has seen this type of clause being used? 

Thanks

tizerbelle

Bog standard clauses.  Very easy to avoid, just don't break the terms of the agreement i.e. don't raise an employment tribunal claim against the company, don't talk about the agreement, don't go bitching about the employer on social media etc etc.  The employer can't just make up stuff to take you to court for breaching it, they would have to have evidence that you did and then they would have to win the court case to be able to enforce it.   

Is your friend not getting a solicitor to review the agreement for him?  You can ask the employer to pay towards the costs of this - they don't have to and they may only pay part of the cost but for the agreement to be valid, your friend does need to have independent legal advice.

Undervalued

tizerbelle said:

Bog standard clauses.  Very easy to avoid, just don't break the terms of the agreement i.e. don't raise an employment tribunal claim against the company, don't talk about the agreement, don't go bitching about the employer on social media etc etc.  The employer can't just make up stuff to take you to court for breaching it, they would have to have evidence that you did and then they would have to win the court case to be able to enforce it.   

Is your friend not getting a solicitor to review the agreement for him?  You can ask the employer to pay towards the costs of this - they don't have to and they may only pay part of the cost but for the agreement to be valid, your friend does need to have independent legal advice.

Indeed.

As tizerbelle says, fairly standard clauses that you would find in the majority of settlement agreements.

Obviously if your "friend" is in a strong enough bargaining position they may be able to get some or all of the clauses amended or deleted before they sign. However that would be unusual. If the employer won't compromise then the options are to either accept or have their day in court! If they win in court / tribunal they won't be bound by any confidentiality agreements etc and can tell the whole world what happened (as long as it is true)!

For the agreement to be valid the "friend" must receive legal advice from either a solicitor or a specially trained trades union rep. It is normal (although not obligatory) for the employer to pay just enough for the solicitor to do the bear minimum the law requires. Further legal advice and negotiating would normally be at the employee's expense.

SChitmehard

tizerbelle said:

Bog standard clauses.  Very easy to avoid, just don't break the terms of the agreement i.e. don't raise an employment tribunal claim against the company, don't talk about the agreement, don't go bitching about the employer on social media etc etc.  The employer can't just make up stuff to take you to court for breaching it, they would have to have evidence that you did and then they would have to win the court case to be able to enforce it.   

Is your friend not getting a solicitor to review the agreement for him?  You can ask the employer to pay towards the costs of this - they don't have to and they may only pay part of the cost but for the agreement to be valid, your friend does need to have independent legal advice.

I guess the concern is something like :

a) employer claiming he violated the agreement and then asking for the money back. If my friend fights it, they have to pay employers legal costs under clause 1.2 even if employer loses as employer will say they were trying to "enforce the agreement" so my friend has to pay their legal fees.

b) one of the clauses is that he will not apply for a job at the employer or subsidiaries. It could be easy to apply for a job not knowing that a company is a subsidiary of the employer OR the employer could get someone to apply for a job  in the name of my friend and then say that he violated the agreement citing the application that someone else did! Now he has to pay money back!

c) He will have to pay back £8000 even though he will receive £6000 after employer deducts NI and tax! So he would have to pay an extra £2000 back as well as employers legal costs!

SChitmehard

Undervalued said:

tizerbelle said:

Bog standard clauses.  Very easy to avoid, just don't break the terms of the agreement i.e. don't raise an employment tribunal claim against the company, don't talk about the agreement, don't go bitching about the employer on social media etc etc.  The employer can't just make up stuff to take you to court for breaching it, they would have to have evidence that you did and then they would have to win the court case to be able to enforce it.   

Is your friend not getting a solicitor to review the agreement for him?  You can ask the employer to pay towards the costs of this - they don't have to and they may only pay part of the cost but for the agreement to be valid, your friend does need to have independent legal advice.

Indeed.

As tizerbelle says, fairly standard clauses that you would find in the majority of settlement agreements.

Obviously if your "friend" is in a strong enough bargaining position they may be able to get some or all of the clauses amended or deleted before they sign. However that would be unusual. If the employer won't compromise then the options are to either accept or have their day in court! If they win in court / tribunal they won't be bound by any confidentiality agreements etc and can tell the whole world what happened (as long as it is true)!

For the agreement to be valid the "friend" must receive legal advice from either a solicitor or a specially trained trades union rep. It is normal (although not obligatory) for the employer to pay just enough for the solicitor to do the bear minimum the law requires. Further legal advice and negotiating would normally be at the employee's expense.

Undervalued said:

tizerbelle said:

Bog standard clauses.  Very easy to avoid, just don't break the terms of the agreement i.e. don't raise an employment tribunal claim against the company, don't talk about the agreement, don't go bitching about the employer on social media etc etc.  The employer can't just make up stuff to take you to court for breaching it, they would have to have evidence that you did and then they would have to win the court case to be able to enforce it.   

Is your friend not getting a solicitor to review the agreement for him?  You can ask the employer to pay towards the costs of this - they don't have to and they may only pay part of the cost but for the agreement to be valid, your friend does need to have independent legal advice.

Indeed.

As tizerbelle says, fairly standard clauses that you would find in the majority of settlement agreements.

Obviously if your "friend" is in a strong enough bargaining position they may be able to get some or all of the clauses amended or deleted before they sign. However that would be unusual. If the employer won't compromise then the options are to either accept or have their day in court! If they win in court / tribunal they won't be bound by any confidentiality agreements etc and can tell the whole world what happened (as long as it is true)!

For the agreement to be valid the "friend" must receive legal advice from either a solicitor or a specially trained trades union rep. It is normal (although not obligatory) for the employer to pay just enough for the solicitor to do the bear minimum the law requires. Further legal advice and negotiating would normally be at the employee's expense.

Employer will pay £2500 for legal advice but solicitor is useless and just keeps on saying looks OK even though there were a lot of terms that were totally one-sided which the employers solicitor agreed to take out. She's a NWNF solicitor that took on the case but did the minimum and seems just to to be in it to get her 35% ASAP for next to no work.

GingerTim

SChitmehard said:

tizerbelle said:

Bog standard clauses.  Very easy to avoid, just don't break the terms of the agreement i.e. don't raise an employment tribunal claim against the company, don't talk about the agreement, don't go bitching about the employer on social media etc etc.  The employer can't just make up stuff to take you to court for breaching it, they would have to have evidence that you did and then they would have to win the court case to be able to enforce it.   

Is your friend not getting a solicitor to review the agreement for him?  You can ask the employer to pay towards the costs of this - they don't have to and they may only pay part of the cost but for the agreement to be valid, your friend does need to have independent legal advice.

I guess the concern is something like :

a) employer claiming he violated the agreement and then asking for the money back. If my friend fights it, they have to pay employers legal costs under clause 1.2 even if employer loses as employer will say they were trying to "enforce the agreement" so my friend has to pay their legal fees.

b) one of the clauses is that he will not apply for a job at the employer or subsidiaries. It could be easy to apply for a job not knowing that a company is a subsidiary of the employer OR the employer could get someone to apply for a job  in the name of my friend and then say that he violated the agreement citing the application that someone else did! Now he has to pay money back!

c) He will have to pay back £8000 even though he will receive £6000 after employer deducts NI and tax! So he would have to pay an extra £2000 back as well as employers legal costs!

With respect, this suggestion reads as utterly bizarre and a bit of an irrational worry.

As tizerbelle pointed out, these are bog standard settlement clauses and an employer can't just make stuff up or concoct a scenario to make it look like you have broken the terms. That would be illegal.

Jaybee_16

Does your friend have an agreed reference as part of the settlement agreement?

Marcon

SChitmehard said:

Undervalued said:

tizerbelle said:

Bog standard clauses.  Very easy to avoid, just don't break the terms of the agreement i.e. don't raise an employment tribunal claim against the company, don't talk about the agreement, don't go bitching about the employer on social media etc etc.  The employer can't just make up stuff to take you to court for breaching it, they would have to have evidence that you did and then they would have to win the court case to be able to enforce it.   

Is your friend not getting a solicitor to review the agreement for him?  You can ask the employer to pay towards the costs of this - they don't have to and they may only pay part of the cost but for the agreement to be valid, your friend does need to have independent legal advice.

Indeed.

As tizerbelle says, fairly standard clauses that you would find in the majority of settlement agreements.

Obviously if your "friend" is in a strong enough bargaining position they may be able to get some or all of the clauses amended or deleted before they sign. However that would be unusual. If the employer won't compromise then the options are to either accept or have their day in court! If they win in court / tribunal they won't be bound by any confidentiality agreements etc and can tell the whole world what happened (as long as it is true)!

For the agreement to be valid the "friend" must receive legal advice from either a solicitor or a specially trained trades union rep. It is normal (although not obligatory) for the employer to pay just enough for the solicitor to do the bear minimum the law requires. Further legal advice and negotiating would normally be at the employee's expense.

Undervalued said:

tizerbelle said:

Bog standard clauses.  Very easy to avoid, just don't break the terms of the agreement i.e. don't raise an employment tribunal claim against the company, don't talk about the agreement, don't go bitching about the employer on social media etc etc.  The employer can't just make up stuff to take you to court for breaching it, they would have to have evidence that you did and then they would have to win the court case to be able to enforce it.   

Is your friend not getting a solicitor to review the agreement for him?  You can ask the employer to pay towards the costs of this - they don't have to and they may only pay part of the cost but for the agreement to be valid, your friend does need to have independent legal advice.

Indeed.

As tizerbelle says, fairly standard clauses that you would find in the majority of settlement agreements.

Obviously if your "friend" is in a strong enough bargaining position they may be able to get some or all of the clauses amended or deleted before they sign. However that would be unusual. If the employer won't compromise then the options are to either accept or have their day in court! If they win in court / tribunal they won't be bound by any confidentiality agreements etc and can tell the whole world what happened (as long as it is true)!

For the agreement to be valid the "friend" must receive legal advice from either a solicitor or a specially trained trades union rep. It is normal (although not obligatory) for the employer to pay just enough for the solicitor to do the bear minimum the law requires. Further legal advice and negotiating would normally be at the employee's expense.

Employer will pay £2500 for legal advice but solicitor is useless and just keeps on saying looks OK even though there were a lot of terms that were totally one-sided which the employers solicitor agreed to take out. She's a NWNF solicitor that took on the case but did the minimum and seems just to to be in it to get her 35% ASAP for next to no work.

Why on earth use a NWNF solicitor if the employer is prepared to pay for decent advice on the settlement agreement? If you're really bothered by the clauses, pay for another solicitor to do the job on a proper footing - i.e. paid to do the job of reviewing the settlement agreement.

Undervalued

Marcon said:

SChitmehard said:

Undervalued said:

tizerbelle said:

Bog standard clauses.  Very easy to avoid, just don't break the terms of the agreement i.e. don't raise an employment tribunal claim against the company, don't talk about the agreement, don't go bitching about the employer on social media etc etc.  The employer can't just make up stuff to take you to court for breaching it, they would have to have evidence that you did and then they would have to win the court case to be able to enforce it.   

Is your friend not getting a solicitor to review the agreement for him?  You can ask the employer to pay towards the costs of this - they don't have to and they may only pay part of the cost but for the agreement to be valid, your friend does need to have independent legal advice.

Indeed.

As tizerbelle says, fairly standard clauses that you would find in the majority of settlement agreements.

Obviously if your "friend" is in a strong enough bargaining position they may be able to get some or all of the clauses amended or deleted before they sign. However that would be unusual. If the employer won't compromise then the options are to either accept or have their day in court! If they win in court / tribunal they won't be bound by any confidentiality agreements etc and can tell the whole world what happened (as long as it is true)!

For the agreement to be valid the "friend" must receive legal advice from either a solicitor or a specially trained trades union rep. It is normal (although not obligatory) for the employer to pay just enough for the solicitor to do the bear minimum the law requires. Further legal advice and negotiating would normally be at the employee's expense.

Undervalued said:

tizerbelle said:

Bog standard clauses.  Very easy to avoid, just don't break the terms of the agreement i.e. don't raise an employment tribunal claim against the company, don't talk about the agreement, don't go bitching about the employer on social media etc etc.  The employer can't just make up stuff to take you to court for breaching it, they would have to have evidence that you did and then they would have to win the court case to be able to enforce it.   

Is your friend not getting a solicitor to review the agreement for him?  You can ask the employer to pay towards the costs of this - they don't have to and they may only pay part of the cost but for the agreement to be valid, your friend does need to have independent legal advice.

Indeed.

As tizerbelle says, fairly standard clauses that you would find in the majority of settlement agreements.

Obviously if your "friend" is in a strong enough bargaining position they may be able to get some or all of the clauses amended or deleted before they sign. However that would be unusual. If the employer won't compromise then the options are to either accept or have their day in court! If they win in court / tribunal they won't be bound by any confidentiality agreements etc and can tell the whole world what happened (as long as it is true)!

For the agreement to be valid the "friend" must receive legal advice from either a solicitor or a specially trained trades union rep. It is normal (although not obligatory) for the employer to pay just enough for the solicitor to do the bear minimum the law requires. Further legal advice and negotiating would normally be at the employee's expense.

Employer will pay £2500 for legal advice but solicitor is useless and just keeps on saying looks OK even though there were a lot of terms that were totally one-sided which the employers solicitor agreed to take out. She's a NWNF solicitor that took on the case but did the minimum and seems just to to be in it to get her 35% ASAP for next to no work.

Why on earth use a NWNF solicitor if the employer is prepared to pay for decent advice on the settlement agreement? If you're really bothered by the clauses, pay for another solicitor to do the job on a proper footing - i.e. paid to do the job of reviewing the settlement agreement.

I read this thread (and I seem to remember some others) to suggest that the NWNF solicitor has negotiated this settlement offer. But I may be wrong. If they have they will be entitled to a very significant chunk of the £8K settlement.

£2500 is a high contribution from an employer for the minimum legal advice needed to make a settlement agreement binding. I almost wondered if that should have read £250 although that would be low these days!

If the OP's solicitor has negotiated this SA then the contract may prevent the OP seeking advice elsewhere. If the employer is offering £2500 then it is not really the OP's problem apart from the fact he seems to think the solicitor is not much good!

OP - I obviously know nothing of the rights and wrong of your claim. The average employment tribunal payout is, AFAIK, still less than that although obviously some claims are worth vastly more. If you are on a NWNF agreement what are the implications if you turn this offer down?

As I (and others) have said the terms you are concerned about seem fairly standard. Unless you have an exceptional case you are unlikely to get many, if any, significant changes.

SChitmehard

GingerTim said:

SChitmehard said:

tizerbelle said:

Bog standard clauses.  Very easy to avoid, just don't break the terms of the agreement i.e. don't raise an employment tribunal claim against the company, don't talk about the agreement, don't go bitching about the employer on social media etc etc.  The employer can't just make up stuff to take you to court for breaching it, they would have to have evidence that you did and then they would have to win the court case to be able to enforce it.   

Is your friend not getting a solicitor to review the agreement for him?  You can ask the employer to pay towards the costs of this - they don't have to and they may only pay part of the cost but for the agreement to be valid, your friend does need to have independent legal advice.

I guess the concern is something like :

a) employer claiming he violated the agreement and then asking for the money back. If my friend fights it, they have to pay employers legal costs under clause 1.2 even if employer loses as employer will say they were trying to "enforce the agreement" so my friend has to pay their legal fees.

b) one of the clauses is that he will not apply for a job at the employer or subsidiaries. It could be easy to apply for a job not knowing that a company is a subsidiary of the employer OR the employer could get someone to apply for a job  in the name of my friend and then say that he violated the agreement citing the application that someone else did! Now he has to pay money back!

c) He will have to pay back £8000 even though he will receive £6000 after employer deducts NI and tax! So he would have to pay an extra £2000 back as well as employers legal costs!

With respect, this suggestion reads as utterly bizarre and a bit of an irrational worry.

As tizerbelle pointed out, these are bog standard settlement clauses and an employer can't just make stuff up or concoct a scenario to make it look like you have broken the terms. That would be illegal.

The employer has concocted things and done illegal things already which is why he left and put in an ET claim!

SChitmehard

Jaybee_16 said:

Does your friend have an agreed reference as part of the settlement agreement?

They at first refused to give one at all.  But in his type of job he NEEDS a personal reference about his work ethic/standard etc. and they have refused point blank to provide this. Now, after a lot of negotiation they said they will only give start/end date and job title which is not good really but better than nothing.