Non-Formal Settlement Agreements Are Enforceable in Employment Cases

The courts routinely enforce settlement agreements, even if all of the terms have not been written down or put into a formal settlement agreement. The courts have a strong policy to hold parties to a settlement understanding if the primary terms have been agreed to. Both employers and employees must be careful in mediation to ensure that they agree to all the key terms of a settlement in advance of the preparation of a formal settlement agreement. Otherwise, they may be forced in the end into a settlement agreement that they may not contain all of the terms they want included because the court will enforce the terms the parties had agreed to.