A Guide To Compromise Agreements

Compromise agreements are becoming exceedingly popular in the United States. This article will give you a brief look into what they actually are as well as provide some compromise agreement samples in order to broaden your knowledge and awareness.


So what is a compromise agreement? A compromise agreement is a legal contract between an employer and an employee, or ex-employee. It is often used by employers as a method to avoid any issues going to tribunal. Basically, an employee will agree not to take any further action against an employer for the workplace issue in question, as long as they receive some form of compensation in exchange. This is usually a financial sum which has been negotiated between both parties, with an employment attorney often involved to make sure everything is handled correctly and makes sense financially.

Compromise agreements are most often used when an employee has been dismissed unexpectedly. They are generally considered the best way to sort any workplace disputes, because they save a lot of time and effort and they generally ensure that both parties have been left satisfied with the outcome. In addition to this, it is a much more cost-effective method rather than taking it to an Employment Tribunal. In fact, you can usually gain advice regarding compromise agreements for free. It is also beneficial to the employer because they protect themselves from any further disputes. 

So what is entailed in a compromise agreement? There are a whole host of compromise agreement samples available for you to view online. Taking a look at these compromise agreement samples is a good idea because it gives you a feel for not only what is included in the contract but also the way in which it is set out, so you get a good idea of what you could potentially be dealing with. 

Nevertheless, to give you an idea of the sort of areas covered this article will divulge into the terms of the agreement, i.e. the main issues which are generally addressed in a compromise agreement. These tend to include aspects such as the terms regarding the compensation the employee is set to receive, as mentioned earlier this tends to be a negotiated monetary sum. It also indicates what information should remain confidential. In addition to this, it includes what reference the employer will give the employee in the future as well as an agreement from the employee that they will not make any defamatory statements in relation to their employer. Furthermore, it also requires the employee the legal guarantee that they will not take any further action regarding this workplace incident. 

So there you have it; a look into compromise agreement samples and the ins and outs of the contract.



  • Rosie

    Many big companies have arbitration requirements when you get hired you are agreeing to the terms of your employment, that can limit your ability later, so don’t take the job, or sign. When people get let go, they typically have to sign an agreement not to pursue any other legal recourse, or not get the severance, so most people go with the severance. Many people don’t realize how hard it can be to prove age discrimination if you get let go, the most successful are when a group of people together go against the company. These can be good for those not bound otherwise, as many companies have retained counsel (internal or external) and have no problem with letting you run your money down fighting them, and then could still lose! If they are willing to settle with you, it often can be the best, and all of those agreements (including severance) typically require you to agree to not talk about your employment or the severance, etc., except to your immediate family, spelled out as your spouse and a few others.

  • Tamra Phelps

    It seems to me that if financial compensation is the primary concern of the employee, this is the way to go. If they have other issues with the company, this might not be the way to go.

  • Tamra Phelps

    I think these agreements have a reputation of indicating the company has something to hide. They might want to think twice about using them just to avoid legal fees. It might hurt their reputation.

  • Tamra Phelps

    Usually, companies offer this when they don’t want the former employee to talk about something. The employee often agrees because they’re going to be out of work, need the cash and can’t afford legal fees to fight.

  • Kate Sarsfield

    Do you know I’ve been thinking of this all night and what concerns me, apart from the fact that there are no winners, is what does the company have to hide? It’s like signing the Official Secrets Act in the UK.

  • Tamra Phelps

    I don’t think I’d do it if it required me to not talk about the disagreement or the issues. That would be a dealbreaker.

  • Tamra Phelps

    It might be the way to go for a lot of people, but I’m not sure I’d say both parties are satisfied. It might be more accurate to say parties are equally unsatisfied, lol.

Leave a Reply

Your email address will not be published. Required fields are marked *