counter offer

Employment Law: How Does A Counteroffer Work?

You might be finding yourself in a workplace conflict. You might be a former employee claiming wrongful dismissal, or you might be an employer receiving that claim. Either way, you want to try to settle things privately before a lawsuit has started. When the other party has made an offer, you might be wondering what you should do. An employment lawyer can help you decide what’s right for your case. This can mean recommending an appropriate amount to counteroffer or advising that you offer nothing at all.

When Does A Counter Offer Happen?

The first offer is made when a demand letter has been sent. The recipient has the first opportunity to settle the matter by accepting or sending a counteroffer in a response. From here, the parties are free to continue to make counteroffers until someone accepts. Many cases end this way without having to resort to an expensive, time-consuming lawsuit.

However, parties can still make offers and counteroffers after a lawsuit has begun. This allows for an early settlement and avoids the most expensive part of the process: going to trial.

How Do You Know What A Counter Offer Should Be?

When considering a counteroffer, an employment lawyer needs to consider what your goals are. If you must avoid a lawsuit, it may be acceptable to compromise. This may mean accepting an offer or making a reasonable counteroffer.

Or, you might not be willing to budge, and your lawyer might advise that a lawsuit is to your advantage. For example, you might be a former employee who was wrongfully terminated, but the company won’t offer anything. Or you’re the employer, and your lawyer suggests that the employee may not even be willing to sue.

A lawyer will consider your needs while also thinking strategically. This may mean suggesting an offer that is less compromising than you are willing to be to avoid showing weakness. However, an employment lawyer will always obtain your consent before making an offer.

What Are The Risks Of Making A Counteroffer?

The risks of rejecting an offer depend on the stage of the conflict. In any case, you risk the uncertainty of moving the matter forward. Accepting an offer provides an offramp that you are choosing not to take when you continue to negotiate.

Often a party will maintain an offer and not retract it following a counter offer. But sometimes, circumstances change during negotiation. For example, if you are a former employee, you might accept a job offer, mitigating (or limiting) your damages. Your former employer may find out about this and retract or lower their offer as a result.

If a party sends their final offer and will not budge, refusing to accept could mean starting an expensive lawsuit

Negotiating a settlement becomes more complicated in a lawsuit. You still run the risk that a party retracts an offer if circumstances change. This also means risking the loss of a final offramp before starting a long and expensive court process. If you reject a reasonable offer and go to trial, this may lead to further expenses. A lawyer will discuss these risks before advising on the right strategy. 

Related Topics

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Choosing the Right Commercial Litigation Law Firm

Choosing a Workplace Lawyer in Ontario


There are many factors to consider when making a counter offer:

  • The strength of your case;
  • Whether you want to settle to avoid costs or hold firm on your position;
  • The risks of turning down an offer; and
  • The time, energy and costs you are willing to spend on an ongoing conflict.

These are issues that must be discussed frankly with a lawyer. They will consider your wants, needs and resources to advise on the best strategy for your case.

Contact Achkar Law

Whether you are an employer or an employee needing assistance with reviewing or drafting an employment agreement, our team of experienced employment and human rights lawyers at Achkar Law can help.

Contact us by phone toll-free at 1 (800) 771-7882.