Many employment disputes are resolved using some form of negotiated compromise. Sometimes the employer and employee reach an agreement before any formal proceedings commence, typically in response to an informal complaint from the employee or a demand letter from an employee's counsel. In other cases, the employee has filed an administrative charge or civil lawsuit asserting a claim of discrimination or retaliation or other claim arising out of the employment relationship, often after the employment has ended. In some cases, employers may head off these types of claims by asking departing employees to release employment claims in a separation agreement in exchange for a benefit the employee is not otherwise entitled to receive.

State laws may raise additional issues in the settlement and release of employment law claims, including:

For more information about employment dispute resolution generally, see Settling Employment Disputes Toolkit.

For more information on end of employment issues generally, see Departing Employee Toolkit.