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Keep complete records of settlement talks

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in Employment Law,Human Resources

Sometimes, it’s better to settle an employee’s complaint than to litigate it. If you do, be sure to carefully document the entire process.  

You need to be able to prove the employee knew exactly what she was agreeing to, including any provision calling for her to give up the right to sue.

Recent case: Raquel managed a barbeque restaurant in New York City. In May 2016, she was finishing a shift when another manager allegedly groped her buttocks. She filed an internal HR complaint almost immediately.

When she met with HR, Raquel said she didn’t want to keep working for the chain any longer.

She then began negotiating what she called a “golden parachute” agreement. Raquel’s conversations with HR were recorded.

She discussed giving up her right to sue in exchange for at least a year’s salary, plus health benefits. She eventually agreed to settle.

The terms: $30,000 transferred into her bank account as quickly as possible, plus forgiveness of a loan she had received. She signed off on the agreement, which included a clause that released the restaurant from all liability. The chain transferred the money.

Raquel sued anyway, saying she had not agreed to all of the settlement terms.

But the restaurant was ready with plenty of evidence that she had freely and knowingly signed away her rights. If anything, it appeared that she had been the driving force behind the settlement, not the restaurant.

The court enforced the settlement and dismissed Raquel’s lawsuit. (Bryant v. Dallas BBQ, et al., No. 16-CIV-5131, ED NY, 2016)

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