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‘Sweating the Small Stuff’: How Every Decision About What Does — and Doesn’t — Go Into Your Employment Settlement Agreement May Affect Your Future Legal Rights and Options

In contract law, experienced attorneys know that the key to success (or potentially to defeat) can often lie in the so-called “fine print,” which is why it is well worth going over every detail with great care. That is true, not just in business and commercial contracts, but in most binding agreements generally, including a settlement agreement reached as part of your employment law case. A knowledgeable New Jersey employment lawyer can help you to “sweat the small stuff” and get the settlement agreement that works best for you.

Generally speaking, the most optimal settlement agreement you can reach, if you are an employee, is one that gets you a resolution, gets you compensated, and does so while surrendering as few of your legal rights and options as possible.

An age discrimination case recently before the Appellate Division court shows just how helpful the right agreement can be. In that case, K.R. was a 30-plus-year veteran of a local police department in Union County when, in 2015, two others officers misrepresented facts to a prosecuting attorney to obtain a search warrant in a suspected drunk driving case. K.R. was not one of the officers involved in the misconduct, but one of the ones who was involved told him about the misconduct, and K.R. did not inform the prosecuting attorney’s office, even though he said he would.

During the department’s internal investigation, K.R. suffered a minor stroke. The department’s director visited K.R. in the hospital. He asked K.R., who was 58 at the time, how old he was and told him the departmental charges against him could “go away” if K.R. retired immediately. 

He did not retire, however, and the department proceeded with disciplinary action. A few months later, K.R. agreed to a settlement that resolved the internal discipline case. The contract said that K.R. had engaged in inadequate supervisor of subordinate officers but that, in exchange for K.R. withdrawing his request for a hearing on the charges, he would be allowed to retire in good standing.

In addition to acknowledging the inadequacy of his supervision of the subordinate officers, K.R. also acknowledged that the charges “were not racially motivated.”

It’s Not Just What Goes Into Your Settlement Agreement, But What Doesn’t

What K.R. and his legal team negotiated was actually a very clever outcome. The benefits of the agreement lay, not only in what was in the document but also in what was notK.R., of course, did have to give up some things to get that outcome. By acknowledging that the charges were not racially motivated, he surrendered any possibility of pursuing a race discrimination case.

But note what K.R. did not give up. The agreement forced K.R. to acknowledge that the charges were not racially motivated, but he did not acknowledge that the charges were free from any form of discrimination. Essentially, the acknowledgment only forced him to surrender a future race discrimination claim, not all future discrimination claims.

In a lot of settlement agreements, your employer will only settle in exchange for an agreement to abandon any and all legal actions and potential actions arising from the adverse action, or perhaps even arising from the entire employment relationship. Those kinds of broad release agreements will often doom an employee’s subsequent attempt to bring a discrimination case.

However, K.R.’s agreement didn’t say that. The agreement he signed said that he was waiving claims arising from the disciplinary action, not from the employment relationship as a whole. This distinction, though subtle, was important and raised an arguable possibility that K.R. did not waive his right to pursue a future age discrimination case when he signed the settlement agreement.   

That distinction and that absence of a broad acknowledgment in the settlement was massively important when, a year and a half later, K.R. sued for age discrimination. The lawsuit alleged that the department forced K.R. into retirement, not because of his race but because of his age. According to the appeals court, the settlement agreement K.R. signed, with what it included and what it did not. did not foreclose his pursuit of such an argument.

What K.R.’s case teaches in stark relief is just how much details matter. Details in collecting and amassing your proof. Details in wording the complaint you file. And details in the terms that are included — or excluded — from the settlement agreement you sign. To get the detail-oriented representation you deserve in your case, count on the skilled New Jersey age discrimination attorneys at Phillips & Associates. We have spent many years successfully helping older workers just like you, so contact us online or at (609) 436-9087 to set up a free and confidential consultation today.

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