Settlement Agreement Neutral Reference

Settlement Agreement Neutral Reference: What it is and why it matters

Settlement agreements are a common occurrence in the workplace, especially when an employee and employer have a disagreement that cannot be resolved. These agreements usually stipulate that the employee will receive certain benefits in exchange for agreeing not to pursue legal action against the employer. One important aspect of these agreements is a “neutral reference”, which can play a critical role in helping employees move on to their next job.

What is a settlement agreement neutral reference?

A settlement agreement neutral reference is a reference that an employer provides to an employee who has signed a settlement agreement. It is designed to provide employers with a way to remain neutral when providing references for former employees. The neutral reference is often included in the settlement agreement, and it specifies what information can and cannot be included in the reference.

Why is a settlement agreement neutral reference important?

For employees who have signed a settlement agreement, a neutral reference can be critical to their future job prospects. If an employer provides a negative reference, it can be difficult for the employee to find a new job. Employers may provide negative references for a variety of reasons, including retaliation or to cover up their own wrongdoing. A neutral reference ensures that the employee is not unfairly penalized for having signed a settlement agreement and helps ensure they are not hindered in their career progression.

Neutral references are also important for employers because they provide protection from potential legal action. If an employer provides a negative reference, and an employee believes that it was provided out of retaliation or discrimination, it can lead to legal action against the employer. By providing a neutral reference, an employer can protect themselves from legal action and ensure that the settlement agreement is upheld.

What information is included in a settlement agreement neutral reference?

A settlement agreement neutral reference typically includes basic information, such as the employee`s name, job title, and dates of employment. It may also include information related to the employee`s skills and qualifications, but it will not include any information that could be considered negative or defamatory. This means that the reference will not comment on any performance issues, disciplinary actions, or any other negative aspects of the employee`s employment.

Conclusion

Settlement agreement neutral references are an important aspect of settlement agreements. They provide employees with protection from negative references that could hinder future job prospects and protect employers from potential legal action. By specifying what information can and cannot be included in a reference, employers can ensure that they remain neutral when providing references for former employees. If you are an employer or employee involved in a settlement agreement, it is important to understand the role a neutral reference plays and ensure that it is included in the agreement.