Multiple gavels

With the overwhelming majority of disputes resolved using settlement agreements, they have a unique and prominent place in the litigation setting. They are generally anti-climactic. The sparring of litigation is over, and the parties have decided to move on from their dispute. Yet, I'm seeing a new era in settlement agreements in the employee benefits context, and it's one I find unsettling.

Earlier in my legal career, if a benefit plan wanted to keep the terms of a settlement confidential, that request came with a cost – and rightly so. Each party understood the financial value of non-disclosure, and it was agreed that their extra compensation was the correct approach to cover this new and continuing obligation. It seems almost quaint to reflect on that time when it was chiefly the dollar amount of the settlement that was confidential. For the most part, the fear that the party paying the settlement would open itself up to payment demands by other plan members with similar claims should the amount be disclosed was acknowledged and understood.

An evolution from confidentiality clauses to more expansive settlement language has taken root in recent years, with the releasing party facing not only limits on sharing the settlement amount, but also preventing further discussion of the underlying facts of the case at all. And of course, such restrictions come with no additional compensation – despite the fact that the new and ongoing obligation is now much greater than the monetary restriction alone. So that's where we are on the settlement continuum; where unless somehow unlawful, no major organization settles cases without them. But it doesn't end there.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.