settlement agreement

When Is an Employment Settlement Agreement Unconscionable?

Employment settlement agreements are common in resolving disputes between employers and employees. However, there are instances where such agreements can be unconscionable, making it crucial to understand the factors that contribute to this issue and how to protect your rights.

Legal Framework

In Ontario and across Canada, an employment settlement agreement is considered unconscionable if it is overwhelmingly one-sided, creating a significant imbalance between the parties involved. The legal framework for determining unconscionability includes assessing factors such as duress, undue influence, misrepresentation, and the overall fairness of the agreement.

Criteria for Unconscionability

Courts typically consider an employment settlement agreement unconscionable if it meets certain criteria:

  • Inequality of Bargaining Power: One party has significantly more power or influence over the other. In employment contexts, this often means the employer has much greater power than the employee.
  • Unfair Terms: The terms of the agreement are excessively unfair to one party, such as significantly limiting the employee’s future employment opportunities or providing inadequate compensation.
  • Lack of Understanding: One party did not fully understand the terms or the implications of the agreement, possibly due to complex legal language or insufficient time to review the document.
  • Duress or Coercion: The agreement was signed under pressure or threats, such as the threat of immediate termination without proper compensation.


  • Duress: An employee is forced to sign a settlement agreement under the threat of immediate termination or other severe consequences.
  • Misrepresentation: An employer provides false or misleading information about the legal implications of the agreement to secure the employee’s signature.
  • Lack of Understanding: The employee is not given adequate time to review the agreement or seek legal advice, leading to a lack of informed consent.

Practical Advice

If you suspect your employment settlement agreement is unconscionable, follow these steps:

  • Review the Agreement: Carefully review the terms and conditions. Look for any terms that seem excessively unfair or one-sided.
  • Gather Evidence: Collect any relevant documents, communications, or witness statements that could support your claim of unconscionability.
  • Seek Legal Advice: Contact a legal professional to evaluate the agreement. An experienced employment lawyer can provide invaluable insight into the fairness of the terms and the legality of the agreement.
  • Challenge the Agreement: If advised by your lawyer, formally challenge the agreement through appropriate legal channels. This might involve negotiating new terms or taking the matter to court.


Recognizing an unconscionable employment settlement agreement is essential for ensuring fair treatment in the workplace. If you believe your settlement agreement is unfair, seek legal advice to protect your rights. Achkar Law is here to assist you with any concerns regarding employment settlement agreements.

If you believe your employment settlement agreement is unfair or unconscionable, it’s essential to seek  legal advice. At Achkar Law, we understand the complexities of employment law and are dedicated to protecting your rights. Our experienced team can help you review your settlement agreement, provide guidance, and represent you in negotiations or legal proceedings if necessary.

Contact Achkar Law today to schedule a consultation. Let us help you ensure your settlement agreement is fair and just.

Don’t let an unfair settlement agreement dictate your future. Trust Achkar Law to advocate for your rights and achieve the best possible outcome for your situation.

Toll-free: 1 (866) 996-9812 | Email: [email protected]

Unfair Settlement Agreement? Contact Achkar Law for Legal Guidance

If you believe your employment settlement agreement is unfair or unconscionable, it’s crucial to seek professional legal advice. At Achkar Law, we are committed to protecting your rights and ensuring fair outcomes. Our experienced team can review your settlement agreement, offer guidance, and represent you in negotiations or legal proceedings if needed.



Avoiding Employment Litigation

How Does Severance Pay Affect Unemployment Benefits

Can an Employer Retract a Job Offer in Canada?

A Job Contract Agreement in Ontario Explained