Settlement Offers – Do They Have to Be Kept Confidential?

Question: I was fired from a publishing company that is owned by a private equity firm. I got a prominent lawyer to take my case for wrongful termination and age discrimination. Now after more than a year of delay the company asked for my demands and says they want to offer me a settlement this week.

My question is: they want me to not speak of this offer or the fact that they are even giving me an offer. I am not allowed to say anything about the fact that I got an offer. My lawyer said it will be signed after the settlement but in the meantime I still have lost my freedom to speak. Actually I am not a gossip and would probably only tell my family, but I rather think this is strange. What happens if they give me a lowball figure? If I don’t take it they could delay longer and not give me another offer and from what my lawyer says I could never say anything. Is this normal operating procedure for this type of case? Thanks!

“Silenced in Ohio”

Answer: It’s almost always the case that employers insist that settlement offers and settlement agreements be kept confidential. That is for several reasons: (a) so that other employees don’t get wind of them and say to themselves, “Hey, I think I’ll try that,” (b) so that the offers won’t be known to the jury, if your case gets that far, and (c) so that they can – if it suits them later, before the agreement is signed – withdraw the offer.

First, you should have your attorney ask your employer’s attorney to agree that certain people can be told of the offer(s), namely (1) your immediate family, (2) your financial advisor, and (3) your accountant/tax advisor. Second, you should instruct your attorney that, whether or not settlement discussions are taking place, there is no reason for a halt or delay in going forward with your lawsuit. This will stop them from stalling, a common tactic.

Overall, this is generally “how things work.” This is especially the way things work with private equity-owned businesses, because private equity firms are very, very concerned about their public reputations. Wouldn’t you be, too, if your investors were public pension funds, college endowments and wealthy individuals, none of which wants to be associated with “bad” employers? They are also very fearful of the wrath of juries. Bear that in mind when you are negotiating; you probably have more leverage than you think.

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Best, Al Sklover