Settlement agreements can be deceptively complex. On the surface, a tidy document and a reasonable sounding figure. Underneath, clauses that could cost you thousands. Before you sign, check your agreement against these ten red flags.
The Ten Red Flags
One. No enhancement above your basic entitlements. If you are only being offered what you are already owed, you are giving away your claims for free.
Two. Vague or missing tax wording. Without clear allocation, you could face an unexpected HMRC bill under the tax indemnity you will almost certainly be giving.
Three. No agreed reference. A settlement agreement is your chance to lock in the wording of your reference. If it is missing, ask why.
Four. Bonus and commission silence. If the agreement does not mention amounts you have earned or are about to earn, assume you are losing them.
Five. Sweeping restrictive covenants. New or restated non-compete clauses can quietly limit your next move.
Six. One-sided confidentiality. You are gagged, they are not. Confidentiality should cut both ways, with sensible carve-outs.
Seven. Warranties you cannot safely give. Statements that you have no other claims or job offers can unravel the deal later if inaccurate.
Eight. Repayment or clawback clauses. Some agreements let the employer claw back your payment for minor breaches.
Nine. Unrealistic deadlines. Pressure to sign within days is a tactic. You are entitled to reasonable time, normally at least ten days.
Ten. A legal fee contribution that will not cover proper advice. This often signals the employer hopes for a rubber stamp rather than a review.
One Missed Clause Could Cost You Thousands
Every one of these red flags is fixable, but only before you sign. Our specialist employment solicitors review every clause, explain everything in plain English, and negotiate better terms on your behalf. Clients see an average 43% increase in their packages.
Same day reviews, no hidden fees, and your employer pays all costs. Send us your agreement today for a free, no obligation review.
If even one of these red flags sounds familiar, do not panic and do not sign. Most issues can be resolved quickly with a well judged conversation between solicitors, often within a matter of days.
