In Washington State, what are settlement agreements within the context of employment-law litigation? Here’s my point of view.
IMPORTANT: All hyperlinks in this article with an asterisk (*) will take the reader away from this website to either our Williams Law Group Blog* or an official governmental website. This article is for informational purposes only and is based upon my point of view. Due to the rapidly changing nature of the law, we make no warranty or guarantee concerning the accuracy or reliability of the content in this article. No content on this site, regardless of date, should ever be used as a substitute for direct legal advice from your attorney. Please review our Disclaimer|Terms of Use|Privacy Policy before proceeding.
Advertisement
Finality Through Compromise: The Role of Settlement Agreements in Employment Law
In employment disputes—often emotionally charged and legally complex—settlement agreements provide a structured and efficient path toward resolution. These agreements, rooted in the well-established principles of contract law, allow employers and employees to avoid the uncertainty and expense of protracted litigation. Courts in Washington, and across the country, consistently support settlements as essential tools for resolving workplace disputes with finality and fairness.
Settlement Agreements: Contracts with Legal Weight
Settlement agreements in the employment context function as legally enforceable contracts and are governed by traditional contract principles—requiring offer, acceptance, consideration, and mutual assent. See Elgiadi v. Wash. State Univ. Spokane, 519 P.3d 939, 941 (Wash. App. 2022) (citing Stottlemyre v. Reed, 35 Wn. App. 169, 171, 665 P.2d 1383 (1983)).
Whether resolving a wrongful termination claim, a wage dispute, or allegations of workplace discrimination, the settlement process formalizes the parties’ agreement to dismiss legal claims in exchange for agreed-upon terms. Once executed, these contracts carry binding legal effect, providing closure and clarity for both employer and employee.
Mutual Concessions: The Nature of Employment Settlements
Employment settlements, like all compromises, involve mutual concessions with parties typically accepting less than what they believe they are entitled to in order to avoid the risks and burdens of litigation. See id. (citing Harding v. Will, 81 Wn.2d 132, 138, 500 P.2d 91 (1972); Strozier v. General Motors Corp., 635 F.2d 424, 425 (5th Cir. 1981); 15B AM. JUR. 2D COMPROMISE AND SETTLEMENT AGREEMENTS § 1 (2021)).
This is particularly true in employment disputes, where the cost of litigation, the unpredictability of jury verdicts, and the reputational stakes for both parties can be substantial. Employees may choose to settle for a guaranteed financial payment rather than risk a less favorable outcome at trial. Employers, in turn, often settle to avoid continued liability, disruption to business operations, and additional legal fees. See id. at 942.
A Strong Public Policy Favoring Settlement
Washington courts have repeatedly emphasized the strong public policy favoring settlements “and the finality they afford.” Id. at 941 (citing Haller v. Wallis, 89 Wash.2d 539, 544, 573 P.2d 1302 (1978)). Accordingly, “Washington jurisprudence recognizes a strong public policy encouraging settlements.” Id. at 941-42 (citing Am. Safety Cas. Ins. Co. v. City of Olympia, 162 Wash.2d 762, 772, 174 P.3d 54 (2007); City of Seattle v. Blume, 134 Wash.2d 243, 258, 947 P.2d 223 (1997); Seafirst Ctr. Ltd. P’ship v. Erickson, 127 Wash.2d 355, 366, 898 P.2d 299 (1995)).
In the employment context, this policy promotes quicker resolution of disputes, helping both parties move forward. It also supports a more cooperative legal environment—one that encourages dialogue and resolution rather than extended confrontation. Ultimately, settlements benefit the legal system by conserving judicial resources and providing certainty to the parties involved.
Finality: The Cornerstone of Settlement
A key aspect of any employment settlement agreement is finality. As emphasized in Haller v. Wallis, 89 Wash.2d at 544, 573 P.2d 1302, the legal system disfavors attempts to reopen resolved disputes. Once a settlement is reached and claims are released, the employer should be protected from further liability regarding the same issues.
This principle is especially important for employers, who often settle in order to eliminate the ongoing costs and uncertainties of litigation. Allowing a plaintiff to revisit settled claims would defeat the entire purpose of compromise, exposing employers to renewed legal exposure after paying to resolve the matter.
To ensure finality, settlement agreements in employment cases typically include comprehensive release of claims clauses. These provisions explicitly bar the employee from bringing future claims arising out of the same employment relationship or incident—giving employers the legal certainty they need to close the book on the dispute.
Conclusion
In employment law, where legal claims can carry high financial and reputational stakes, settlement agreements offer a vital path to resolution. Governed by contract principles and bolstered by strong public policy, these agreements serve both employer and employee by delivering certainty, efficiency, and finality. For employers and counsel alike, understanding the enforceability and purpose of settlement agreements is essential in navigating the complex world of workplace disputes.
READ OUR RELATED ARTICLES
We invite you to read more of our articles related to this topic:
» Illegal Contracts in Washington State
» Interpreting Releases in Washington State*
» Unenforceable Employment-Contract Provisions and Discrimination Claims*
» Washington Contract Law and Sham Consideration*
» WA State Contracts & the Context Rule*
» Washington Contract Law and Sham Consideration*
LEARN MORE
If you would like to learn more, then consider contacting an experienced employment attorney to discuss your case. This article is not offered as legal advice and will not establish an attorney-client relationship with Law Office of Gregory A. Williams or the author of this article; please refer to our Disclaimer | Terms of Use | Privacy Policy for more information.
–gw