Do you sign a work settlement agreement? Great. You accidentally signed away your rights? Not so great. While the deal might look like a quick way out, there might be hidden clauses and vague language that could make you regret your decision in a big way. From unfair payouts to career limitations, a bad decision could ruin your future. The worst part? Most of the time, that realization comes too late.
But you're about to get the inside story on what to look for. This guide is designed to point out the biggest blunders you should avoid, enabling you to sign smartly and secure the best deal possible. Let's get started!
Top 20 Common Mistakes to Avoid
Signing work settlement agreements may appear to be a mere formality, but one misstep can cost you money, career prospects, or even legal issues. Before you sign, ensure that you're not falling into these common pitfalls. Here are 15 errors you should avoid.
1. Skimming Through the Agreement
Legal terminology is daunting, but don't just gloss over the agreement. Read each clause carefully, particularly those concerning compensation, benefits, and future limitations to make sure you're not signing away bad terms.
2. Not Consulting a Lawyer
Work settlement agreements are legally binding, and the moment you put down your signature, there is no undoing it. Getting a lawyer will help you identify unfair terms and negotiate better conditions when it is not too late.
3. Accepting a Lowball Compensation Offer
The employer often tries to provide only necessary measures. A first offer hardly means "last" to them; one must find out whether severance, unused vacation payout, and other benefits for giving up a job are proper and fair.
4. Ignoring Non-Compete Clauses
A sneaky non-compete clause could make it impossible for you to work in your field for months or years. Always check to make sure that any restrictions are reasonable and won't harm your job search prospects in the future.
5. Overlooking Confidentiality Agreements
You will find clauses in certain agreements that stop you from sharing these terms with both existing and prospective workplace employers. Pay attention to the confidentiality clause to prevent accidental violations that might trigger legal complications.
6. Failing to Check for Non-Disparagement Clauses
So you expect the chance to vent about your employer later? Not quite. Certain agreements contain a non-disparagement clause that legally binds an individual not to say anything negative about the company, even if their experiences were horrible.
7. Assuming Verbal Promises Count
Without a written contract, nothing exists. Whatever you do, don’t fall for verbal assurances. Get everything to do with payment, benefits, or future employment opportunities spelled out in the contract.
8. Not Negotiating Better Terms
Settlement agreements are not "take it or leave it." You are entitled to negotiate for severance pay, healthcare benefits, and restrictive clauses. Don’t be afraid to ask for something better!
9. Overlooking Tax Implications
Settlement checks might also be taxed, and no one wants to find themselves slapped with an unexpected bill from the IRS. Speak to a financial advisor about the tax implications of your settlement and ask how the tax burden might be lessened.
10. Signing Under Pressure
Companies might rush you into signing paperwork, but you are entitled to take your time before signing. Don't sign anything you are given right there and then you should take at least a few days to read through the agreement properly.
11. Forgetting to Check Rehire Eligibility
Some of those agreements come with a 'no-rehire' clause preventing you from being hired back by the company. So watch out for that one if you might want to go back.
12. Not Reviewing Healthcare and Benefits
If your settlement is offering you continued healthcare coverage, please inquire about it. For how long? What if you get a new job? Do not naturally assume that the benefits will continue.
13. Ignoring Dispute Resolution Terms
These agreements often contain clauses that favor arbitration over any recourse to sue. Learn what legal options your agreement takes away before signing your rights away.
14. Failing to Account for Stock Options or Bonuses
If you have unvested stock options, commissions, or pending bonuses, make sure you know what happens to them. You do not want to forfeit the money you have earned already.
15. Thinking You Can “Fix It Later”
You are tied once you sign it. There's no chance of renegotiating after the proceedings, so take your time, ask questions, and ensure that it's in your favor before making it official.
Conclusion
A work settlement agreement creates long-lasting effects on the course of your professional career. Before signing the agreement, make sure to carefully review the details with expert assistance.
