The Settlement Agreement: Do Employers Pay the Legal Fees?

In general, when you’re handed a settlement agreement, it’s not a good idea to sign that agreement without first getting legal advice. Legal advice can help prevent you from signing something that is not in your best interest and even, in some cases, secure you a better deal.

However, legal services can be expensive. Depending on what you need and what law firm you go to, some employees may not be able to afford such a large cost. The issue then becomes – is an employer required to pay the employee’s legal fees so that they are able to sign their settlement agreement without worrying about how much they had to spend to do so? 

Here, we outline why an employer might suggest that an employee seeks legal advice, whether they are required to pay for that legal advice, and suggest how to deal with issues that might arise.

Why Do I Need Legal Advice Before Signing a Settlement Agreement?

When you’re dealing with a legal matter with your employer, it is likely that they will have had a lawyer help them draft the settlement. Since most employees are not familiar with legal terms or even what their rights are, it is a good idea to speak with a lawyer before signing anything.

Your employer may tell you to speak to a lawyer before signing a document, in which case you should always listen and find a lawyer who can help. Employers may be obligated to tell you to seek legal representation in cases where you are signing something that is particularly complex. If your employer did not tell you to seek a legal agreement before you signed a legal document like a settlement, speak with an employment lawyer about what your options are. 

Legal advice and representation can prevent you from making a mistake and signing something that could potentially hurt you in the long run. It is a short-term solution that can have long-term effects and benefits.

However, lawyers do not usually come cheap, which is why you may be wondering if your legal fees can be compensated. 

Will My Legal Fees be Compensated as Part of My Settlement Agreement?

Unfortunately, there is nothing that can legally compel your employer to pay your legal fees in a settlement agreement, and it is likely that they will not do so without an incentive. One incentive might be that, by insisting you get legal advice, they benefit from having a settlement agreement that is far less likely to be set aside on equitable grounds later. You could not come back and say you did not know what you were signing. 

If your lawyer can have this term added to a settlement agreement, employers may agree to pay your legal fees. This would be a situation in which it would be prudent to have a lawyer helping you get the best possible deal from your settlement. 

However, a settlement agreement may be different from an offer to settle. A settlement agreement might happen outside of legal proceedings and may even happen in a workplace. An offer to settle happens at any point during legal proceedings, and if it is turned down, it may result in the party who turns down the offer having to pay legal costs to the offeror. For more information about legal costs during an offer to settle, reach out to a qualified employment lawyer at Achkar Law. 

What Are My Options?

The most important thing to remember is that legal advice and representation can help you get the best outcome, no matter what the situation is. While it can be expensive, getting that legal advice or representation might pay for itself in the long run if your lawyer is able to negotiate with your employer and help you get coverage for legal fees.

However, since there is ultimately no requirement for your employer to pay your legal fees if you do get legal advice, it may be a good idea to simply ask your employer whether they would be willing to cover legal fees arising out of a settlement. Some employers may choose to cover some or all of these costs, even without legal pressure. 

If you are unable to confirm whether your employer is willing to pay your legal fees and you’re worried about payment, speak to your lawyer about potential payment options. There may be a solution available. 

Conclusion

At this point in time, there is nothing requiring employers to pay for their employees’ legal fees when it comes to settlement agreements. Employees may be able to ask their employers to cover the fees, but since there is no requirement, the best solution may be to have a lawyer negotiate on your behalf to get legal fees covered. Even if fees are not covered, it is still very important to retain legal representation or get legal advice before you sign anything. Otherwise, you might sign something that does not align with your best interests.

If you have concerns or questions, be sure to reach out to a qualified employment lawyer at Achkar Law. An employment lawyer can help you get the best outcome and negotiate the best deal for you. 

Contact Achkar Law

If you are an employee with questions about retaining legal representation before signing a settlement agreement, our team of experienced workplace lawyers at Achkar Law can help.

Contact us by phone toll-free at 1 (800) 771-7882 or email us at [email protected], and we will be happy to assist.