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A settlement agreement can give you a clean break from an employer, but a poor reference can follow you into your next role. Knowing how to protect employment references before you sign is therefore just as important as checking the compensation figure, notice pay and confidentiality clauses. A reference is often negotiable, and the right wording can provide valuable reassurance while you look for a new position.

For many employees, the concern is not simply whether their employer will provide a reference. It is whether the reference will accurately reflect their work, avoid unnecessary detail about the circumstances of their departure and be given consistently if a prospective employer calls months later.

Why an agreed reference matters

In the UK, an employer is not usually under a general legal duty to provide a reference, although there are exceptions in regulated sectors and where a contractual policy applies. If an employer does provide one, it must be fair, accurate and not misleading. That does not automatically mean it must be positive or detailed.

Many employers now use a basic factual reference as standard. This commonly confirms your job title and dates of employment, and may also confirm salary. A factual reference can be a sensible outcome where there is disagreement about performance or the reasons for departure. It limits scope for subjective comments and gives both sides certainty.

However, basic does not always mean sufficient. If you held a senior role, managed people, delivered measurable results or are applying in a sector where credentials matter, you may reasonably want a fuller agreed reference. The aim is not to force praise that an employer does not genuinely stand behind. It is to agree wording that is truthful, professional and appropriate to the role you performed.

How to protect employment references in the agreement

The strongest protection is to include the exact reference in the settlement agreement itself, usually as an appendix or schedule. Do not rely on a verbal assurance that someone will “say the right thing”. People leave, managers change and memories of a difficult process can fade or differ.

The agreement should state that the employer will provide the agreed reference in response to written requests from prospective employers. It should also say who is authorised to issue it, such as HR or a named senior contact. This reduces the risk of an informal response from a former manager undermining the agreed position.

A useful clause often covers three points: the wording of the reference, the circumstances in which it will be supplied, and the employer’s commitment not to provide a materially different reference. The precise drafting depends on the situation. An employer may need flexibility where it has legal, regulatory or safeguarding duties, for example. But broad wording that allows the business to add whatever it wishes later offers little real protection.

Agree the wording, not just the principle

Ask to see the reference in full before signing. Phrases such as “a suitable reference will be provided” are too vague. A settlement agreement is intended to create certainty, so the reference should be equally clear.

Check the practical details carefully. Are your name, job title and employment dates correct? Does the description of your role reflect your actual seniority? If the reference confirms duties, reporting lines, achievements or reason for leaving, make sure each statement is accurate and balanced.

Where the termination is connected to redundancy, it may be appropriate for the reference to say that your employment ended by reason of redundancy. This can be helpful because redundancy is not a dismissal for misconduct or poor performance. Equally, some employees prefer a neutral reference that gives dates and title only. The better approach depends on the role you are seeking and the facts of your departure.

Avoid agreeing wording that says you resigned if that is not true, or that your employment ended by mutual agreement if the broader context makes that misleading. A prospective employer may ask follow-up questions, and consistency matters. The reference should support an honest explanation rather than create one you have to defend later.

Deal with informal and verbal references

A carefully drafted written reference can be weakened if a hiring manager telephones your old manager and receives a different account. This is particularly relevant for senior employees, close-knit industries and roles where recruitment often happens through professional networks.

You can ask for the agreement to require that all reference requests are directed to a central HR contact and answered using the agreed wording. Some employers will not agree to control every informal conversation, especially where colleagues know one another personally. Even then, it is worth raising the issue and seeking a clear internal instruction that managers should not provide employment references outside the agreed process.

There is a trade-off. A very restrictive clause may be difficult for an employer to accept and may be hard to police in a small business. The practical goal is to prevent an official, contradictory reference rather than to attempt to regulate every private conversation. If there is a particular individual whose comments concern you, explain this during negotiations so a tailored solution can be considered.

Check related clauses before you sign

The reference does not sit in isolation. Other terms in the settlement agreement can affect how your exit is understood and discussed.

First, review any announcement clause. This may set out what the employer will tell colleagues, clients or suppliers about your departure. It should not conflict with the agreed reference. If the announcement says one thing and the reference says another, that can create avoidable questions.

Second, consider confidentiality and non-disparagement wording. Confidentiality usually protects the terms and circumstances of the agreement, but it should not prevent you from giving a truthful, agreed explanation of your departure to future employers. Similarly, a mutual non-disparagement clause may help reduce the prospect of damaging comments, but it is not a substitute for an agreed reference.

Third, check whether the agreement contains a warranty about your future employment or job search. Such clauses are less common, but you should understand whether you are making commitments that could affect your ability to discuss your departure openly and accurately.

Finally, if you are subject to regulatory obligations, disciplinary findings, safeguarding matters or professional-body requirements, a reference clause needs particular care. An employer cannot contract out of legal duties to disclose relevant information. Independent advice is especially valuable where the wording seeks to preserve those obligations while still protecting you from unnecessary disclosure.

Prepare for a prospective employer’s questions

An agreed reference gives you a foundation, but it does not remove the need to explain your move confidently. Keep your account short, factual and consistent with the agreement. For example, if your role was made redundant, you can say that the business restructured and you are now looking for a role that better uses your experience.

You do not normally need to provide a prospective employer with a copy of your settlement agreement. In fact, confidentiality terms may prevent this. You can provide the agreed reference if appropriate, or give the contact details specified in the agreement.

It can also help to collect supporting evidence before your employment ends, where permitted. This might include copies of published work, performance feedback, training records or non-confidential examples of achievements. Do not take confidential documents, client data or information belonging to your employer. The boundary matters, particularly where restrictive covenants and confidentiality obligations continue after termination.

What if the employer later gives a different reference?

Keep a signed copy of your settlement agreement and the agreed reference. If you discover that an employer has issued a reference that materially differs from the agreed wording, obtain evidence if possible, such as a copy from the recipient or a written account of what was said.

The first step is often to raise the issue promptly with the employer, referring to the relevant clause and asking it to correct the position. A breach of an agreed reference term may give rise to a contractual claim, but the appropriate response will depend on the wording, the evidence available and the harm caused. If a job offer has been affected, early legal advice can help you assess the practical options.

Getting the reference right before the agreement is final

Settlement agreements are negotiated documents. If the proposed reference is too limited, inaccurate or silent on an issue that matters to your future career, this is the time to raise it. Once the agreement is signed, improving the wording can be much harder.

An independent adviser can review whether the reference clause is clear, enforceable and consistent with the rest of the agreement. At Arcos Settlement Agreements, the focus is on giving plain-English advice on the terms that shape your next step, including references, compensation and ongoing obligations.

A well-handled exit should leave you able to speak about your employment with confidence. Before you agree to settle, make sure the reference supports that future rather than placing another obstacle in its way.

A favourable reference can matter as much as the financial payment when you are leaving a role. If a prospective employer asks why you left, uncertainty over what your former employer will say can make a negotiated exit feel less secure. The good news is that can references be negotiated is usually the right question to ask early in settlement agreement discussions.

In many cases, yes: the wording of a reference can be agreed and included in the settlement agreement. It is not automatic, and an employer does not have to provide a detailed or glowing reference simply because a settlement is proposed. However, a clear, agreed reference is a common and reasonable point to raise, particularly where your next career move depends on it.

Can references be negotiated in a settlement agreement?

A settlement agreement is a voluntary contract. Its terms can be negotiated before signing, including compensation, notice pay, restrictive covenants, confidentiality clauses and the reference. The employer may initially offer only a basic factual reference, but you can ask for specific wording to be attached to the agreement.

The strongest arrangement is usually a written reference set out in a schedule or appendix to the agreement. This means both sides know what will be provided if a future employer requests a reference. It avoids relying on informal assurances such as, “We will say something positive if asked.”

An agreed reference does not normally mean the employer must give a reference to every future enquirer in all circumstances. Instead, it should state that, where the employer chooses or is required to provide a reference, it will use the agreed wording. The precise drafting matters. A settlement agreement should also identify who is authorised to issue references, so that a manager does not accidentally give an inconsistent response.

Why the wording matters

Many employers now give only a short factual reference. This commonly confirms your job title, dates of employment and sometimes your final salary. A factual reference may be entirely adequate, especially if you have a strong CV, good interview performance and other referees.

But a basic reference can be unhelpful where you are leaving during a dispute, following a performance process, or amid a redundancy exercise that has not been fully explained to future employers. In those circumstances, agreed wording may provide useful reassurance that your departure was handled on agreed terms and will not be presented unfairly.

A well-drafted reference can confirm your role, responsibilities, length of service and, where appropriate, positive aspects of your contribution. It may also state that the employment ended by mutual agreement or as part of a redundancy process. Whether that is sensible depends on the facts. You should not agree to wording that implies poor performance, misconduct or an admission you do not accept merely to secure a reference.

Employers must take care that any reference they provide is accurate, fair and not misleading. This is one reason some organisations prefer a standard factual reference. It is also why overly enthusiastic wording can be difficult to obtain if there has been a live dispute or unresolved concern. Negotiation is about reaching wording that protects your prospects while remaining credible and safe for the employer to give.

What to ask for

Before negotiating, consider what a future employer is likely to need. For many professional roles, an agreed factual reference confirming your title, employment dates and main duties is enough. If you were made redundant, it may be useful for the reference to confirm this clearly, particularly if the timing of your departure could otherwise raise questions.

For senior employees, regulated roles or positions where leadership and performance are closely scrutinised, a fuller agreed reference may be more valuable. It could include a concise description of responsibilities, achievements or conduct during employment. The wording should be measured rather than exaggerated. A reference that sounds artificial may create more questions than it answers.

It can also be sensible to deal with the practical points around the reference, including:

• whether the agreed wording will be used for written and verbal reference requests;
• the name or team responsible for responding to requests;
• whether the employer will confirm the agreed reason for leaving;
• how requests received through an online platform or screening agency will be handled; and
• whether the employer will provide a copy of the reference to you when it is issued, where this is practical.

These details can prevent an agreed written reference being undermined by an unplanned telephone conversation or an inconsistent response from HR.

When an employer may resist

An employer may say that company policy allows only standard references. That does not always end the discussion. Policies are relevant, but settlement agreements are negotiated documents, and employers sometimes make an exception to achieve a clean and amicable resolution.

The employer may also be concerned about ongoing disciplinary or capability issues, complaints raised by colleagues, or the risk that a detailed reference could later be challenged. If so, a compromise may be possible. For example, the parties might agree a neutral factual reference with an agreed statement that the employment ended under a settlement agreement, without commenting on disputed allegations.

There are situations where a reference is more difficult to negotiate. Regulated employers may have disclosure duties, and some professions require fuller information for safeguarding, compliance or fitness-to-practise purposes. A settlement agreement cannot prevent an employer from complying with legal or regulatory obligations. Similarly, it should not require anyone to make a statement they know is untrue.

That does not mean you should accept vague wording without discussion. It means the reference needs to reflect the real context and any obligations that cannot be contracted away.

Do not treat the reference as an afterthought

Reference terms should be discussed before you sign. Once the agreement is completed and your employment has ended, your negotiating position will usually be weaker. If the reference is important to you, make it a clear condition of settlement rather than a side request raised at the end.

Read the whole agreement alongside the reference. A positive reference may have limited value if another clause permits broad disclosures about the circumstances of your departure, or if a non-disparagement clause is drafted only in the employer’s favour. The provisions should work together.

You should also check whether the agreement says anything about announcements to colleagues, clients or suppliers. An agreed internal announcement is not the same as a reference, but it can influence how your departure is understood and whether external contacts receive consistent information.

A practical approach to negotiation

Start by deciding what outcome you genuinely need. If your priority is simply avoiding a damaging reference, an agreed factual reference may give you the certainty you need. If you need help moving quickly into a similar senior role, you may need fuller wording and clarity about the reason for leaving.

Then make a focused request. Providing proposed wording can help because it gives the employer something concrete to consider. Keep it accurate, professional and proportionate. Demanding a highly personalised endorsement where relations have broken down may make settlement harder; asking for neutral, agreed wording is often more achievable.

Do not assume the first draft is final. The reference may be missing from the original agreement, drafted too broadly, or subject to qualifications that weaken its value. Independent legal advice should cover this alongside the compensation and other legal terms. A solicitor can identify whether the wording gives proper protection and suggest amendments that are realistic in the circumstances.

Questions employees often ask

Can my employer give a different reference after agreeing one?

If the settlement agreement includes a clear obligation to use specified wording, the employer should comply with that contractual term. However, drafting should allow for legal and regulatory duties. It is also worth ensuring that the agreement covers both written references and verbal responses where possible.

Must an employer provide a reference in the UK?

Usually, no. There are exceptions in certain regulated sectors and where a contractual policy or previous commitment applies. This is why including the reference in the settlement agreement is valuable: it creates a contractual commitment where one may not otherwise exist.

Should the reference say that I signed a settlement agreement?

Usually, not unless there is a particular reason to mention it. A neutral explanation such as “employment ended by mutual agreement” may be appropriate in some cases, while redundancy may be better stated directly where that is the genuine reason. The right wording depends on your circumstances and future plans.

A settlement agreement should give you clarity, not leave you worrying about an email or telephone call months later. If your future employment prospects may depend on a reference, raise it early, agree the wording in writing and make sure the wider agreement supports the clean transition you are trying to achieve.

A proposed employment tribunal claim waiver can look like a short paragraph near the end of a settlement agreement. In reality, it may be the clause with the greatest long-term effect. By signing it, you may agree not to bring specified legal claims against your employer, usually in return for compensation and agreed exit terms.

That does not mean you should assume the wording is routine or that every right can simply be signed away. UK law sets strict conditions for a valid waiver of statutory employment claims. The agreement must also reflect a fair and informed decision. Before signing, you need clear independent legal advice on what you are giving up, what you are receiving and whether the deal properly protects your next steps.

What is an employment tribunal claim waiver?

An employment tribunal claim waiver is normally part of a settlement agreement. It is the section in which an employee agrees to settle and not pursue certain claims arising from their employment or its termination. The employer receives greater certainty that a dispute will not later become tribunal proceedings. The employee receives an agreed package, often including compensation, notice arrangements, a reference and confidentiality provisions.

Claims commonly listed include unfair dismissal, discrimination, redundancy-related claims, unpaid wages, holiday pay, breach of contract and whistleblowing claims. The precise list should be tailored to the circumstances. A broad-looking clause may contain a long schedule of legislation and possible claims, but the detail matters far more than the length.

For example, an employee leaving through redundancy may need the agreement to address statutory redundancy pay, notice pay, holiday pay, bonus entitlement and any potential discrimination or unfair dismissal issues. A senior employee departing after a workplace dispute may also need careful provisions on share awards, restrictive covenants, an announcement and an agreed reference.

A waiver is not valid simply because it is signed

A settlement agreement is different from an ordinary contract because it can settle statutory employment rights only if legal requirements are met. The agreement must be in writing and must relate to particular complaints or proceedings. It must identify the independent adviser who gave advice, and that adviser must have appropriate insurance. The employee must receive advice on the terms and effect of the agreement, including its impact on their ability to bring tribunal claims.

The document must also state that the statutory conditions regulating settlement agreements have been satisfied. If those requirements are not met, the waiver may not prevent a claim from being brought.

This is why employers usually contribute towards the cost of the employee obtaining independent advice. It is not just an administrative formality. The adviser acts for the employee, not the employer, and should explain the legal effect of the claims being waived. An employer may suggest a solicitor, but the choice of adviser must remain the employee’s.

There is another route to settling claims through ACAS, known as a COT3 agreement. That has its own legal framework. If you have been handed a settlement agreement, however, do not assume it is equivalent to a COT3 or that the same drafting points apply.

What should the waiver cover – and what should it leave out?

A carefully drafted waiver should give both sides meaningful certainty without trying to go beyond what the law permits. It should identify the potential claims being settled and connect them to the circumstances of the employment relationship and exit.

It is common for agreements to preserve certain rights. These may include accrued pension rights, rights to enforce the agreement itself and claims for personal injury that the employee does not know about when signing. Whether a particular carve-out is needed depends on the facts, including the employee’s role, any health concerns and the benefits available.

Some rights cannot be silenced by contract in the way an employer might hope. A settlement agreement cannot prevent a worker from making a protected disclosure. Nor should confidentiality wording purport to stop someone reporting a crime, co-operating with a regulator or making a disclosure protected by law. If a confidentiality clause feels wider than necessary, it deserves close scrutiny.

Future claims require particular care. An agreement can settle existing disputes and claims linked to the employment and termination, but a general attempt to waive every possible future statutory right may be ineffective or inappropriate. For instance, a claim based on conduct that has not happened yet cannot sensibly be valued or settled in the same way as a known dispute.

Check the whole deal, not only the claims list

The value of an employment tribunal claim waiver depends on the agreement around it. A substantial waiver in exchange for a modest payment may not be a fair trade, particularly where there are credible claims or unresolved contractual entitlements.

Start by separating sums that are already owed from the additional payment for settling claims. Salary to the termination date, accrued holiday and contractual notice pay may be contractual entitlements rather than compensation for the waiver. Statutory redundancy pay may also be due regardless of whether you sign. The settlement payment should be considered against what you are relinquishing beyond those baseline rights.

Tax wording also needs a practical review. Payments can be treated differently for tax purposes depending on what they represent. The first £30,000 of a genuine termination payment may often be paid without income tax, but that does not apply automatically to every sum described as compensation. Notice pay and many other payments are normally taxable. The agreement should make clear what is being paid, when it will be paid and what happens if tax is later disputed.

A reference can be as valuable as part of the compensation package. If one has been agreed, it is usually better to attach the exact wording to the agreement. Check who may give it, whether the organisation will provide only that wording, and whether the stated employment dates, job title and reason for leaving are accurate.

Also review post-termination restrictions. An agreement may repeat existing non-compete, non-solicitation or confidentiality obligations. It may also seek to introduce new restrictions. These clauses can affect your ability to take a new role, contact clients or recruit former colleagues. They should not be accepted as incidental wording when your future career is at stake.

Do not let time pressure decide the question

Employees are often asked to sign quickly, especially where a termination date is approaching. A short deadline does not remove the need for informed advice. You can usually ask for reasonable time to obtain advice and consider whether changes are needed.

Be alert to tribunal time limits as well. Many claims have short limitation periods, commonly three months less one day from the relevant act or termination date, although the calculation varies. Settlement discussions do not automatically stop time running. Starting ACAS Early Conciliation can affect the timetable, but it is sensible to take advice promptly rather than rely on assumptions.

If you are unsure whether the offer is fair, preserve relevant documents and make a note of dates, meetings and concerns. That does not mean you must pursue a claim. It means you can assess the proposal from a position of knowledge rather than pressure.

Questions to ask before signing a claim waiver

Before accepting the agreement, make sure you can answer these practical questions: which claims am I settling; what payment is genuinely additional to my existing entitlements; are the payment date and tax treatment clear; is the agreed reference attached; and do confidentiality or restrictive covenant clauses limit me more than expected?

You should also ask whether the wording reflects the reason for your departure. A settlement agreement does not always need to state the full background, but inconsistencies between the agreement, an internal announcement, a reference and any benefits paperwork can create avoidable problems later.

Clear advice creates a better decision

An employment tribunal claim waiver is often a sensible part of an amicable exit. It can provide certainty, compensation and a clean route forward. But certainty should work both ways: the employer should know which claims are settled, and you should know exactly what you have accepted in return.

A specialist review can identify unclear claims wording, missing payments, unhelpful restrictions and terms worth negotiating before the agreement becomes binding. Taking that advice is not a hostile step. It is the practical way to leave with clarity, protection and confidence in the decision you make.

A new role may be ready to start, but the restrictions you agree when leaving can affect what you are able to do next. This guide to post termination restrictions explains the clauses commonly found in UK employment contracts and settlement agreements, what they may prevent, and where there may be room to negotiate.

Post-termination restrictions are often described as restrictive covenants. They are designed to protect an employer after employment ends, usually by limiting contact with clients, colleagues, suppliers or competitors for a defined period. They can be legitimate, but they should not be accepted as standard wording without careful review.

What are post-termination restrictions?

A post-termination restriction is a contractual promise that applies after your employment has ended. It may already appear in your employment contract, or be repeated, amended or newly introduced in a settlement agreement.

The precise wording matters. A clause that says you cannot work for a competitor is very different from one that prevents you from approaching clients with whom you had material dealings in the previous 12 months. A settlement agreement may also confirm that existing restrictions remain in force, even where the agreement itself does not set out the full wording.

The most common restrictions concern non-compete activities, non-solicitation of customers or staff, non-dealing with customers, and non-interference with suppliers or other business contacts. Some agreements also contain obligations about confidential information, company property, announcements and social media.

The restrictions you are most likely to see

A non-compete clause seeks to stop you from working for, setting up or helping a competing business. This is usually the most significant restriction because it can directly affect your choice of future employment. Its scope may depend on the type of work you would carry out, the businesses defined as competitors and the geographical area covered.

A non-solicitation clause normally prevents you from actively encouraging clients, customers or colleagues to move away from your former employer. It does not always prevent a client or former colleague from approaching you without prompting, although the wording must be checked carefully.

A non-dealing clause goes further. It can prevent you from doing business with certain customers even if they make the first approach. This can be particularly restrictive for sales professionals, account managers, consultants and senior employees with long-standing client relationships.

A non-poaching clause, sometimes called a non-solicitation of employees clause, restricts attempts to recruit former colleagues. The definition of a protected employee is important. It may cover only senior staff or anyone employed by the business.

Confidentiality obligations are slightly different. They do not usually stop you taking a new job, but they can prevent you using or disclosing trade secrets, customer information, pricing, strategy and other confidential material. These duties may continue for an indefinite period in relation to genuine trade secrets.

Are post-termination restrictions enforceable in the UK?

Not every restriction is enforceable simply because it appears in a signed document. Under English law, a post-termination restriction must protect a legitimate business interest and go no further than is reasonably necessary to protect it.

Legitimate interests may include confidential information, customer connections, supplier relationships and workforce stability. Preventing ordinary competition, without more, is not generally enough. The employer must be able to show why the restriction is justified for the role you held and the information or relationships you had.

A tribunal or court would look closely at the wording, duration, geographical reach and the people or businesses covered. A six-month restriction may be reasonable for a senior executive with influence over key clients, yet excessive for a junior employee with no client responsibility. There is no single acceptable period. The answer depends on the facts at the time the restriction was agreed.

That said, it is rarely sensible to assume a clause can safely be ignored. Even a restriction that appears broad may lead to dispute, delay or costly correspondence when you are trying to move on. Obtain advice before acting in a way that could be alleged to breach it.

A guide to post termination restrictions in settlement agreements

A settlement agreement is an opportunity to check whether restrictions are being preserved, expanded or introduced for the first time. The agreement should make this clear. You should not have to piece together your obligations from a combination of contract clauses, schedules and broad statements that you have complied with every duty owed to the employer.

Look first for a clause confirming that restrictive covenants in your employment contract continue after termination. Compare it with your original contract. Has the duration changed? Has the list of protected customers been widened? Is a new non-compete restriction being added? These are meaningful changes, not administrative details.

A settlement agreement may also include a warranty that you have not accepted another role that would breach your obligations. If you have a job offer, are setting up a business or are in discussions with a potential client, this needs careful attention. A warranty should not force you to make a statement that is uncertain or untrue.

For employees, independent legal advice is required for a settlement agreement to validly waive statutory employment claims. That advice should cover the practical effect of post-termination restrictions as well as the claims being settled, compensation, tax treatment, confidentiality and reference wording.

What to check before you sign

Start with the question: what does this prevent me from doing in real life? Read the clause alongside your likely next step, rather than treating it as abstract legal language.

Consider the following points:

• Duration: How long does the restriction last? Periods often run from the termination date, although the wording should be checked where garden leave is involved.
• Restricted activities: Does it apply only to work that competes with your former role, or to any work for a competing organisation?
• Protected contacts: Are customers limited to people you dealt with recently, or does the clause cover every customer, prospect or supplier of the business?
• Geographical scope: Is the area relevant to your work, particularly if your role was UK-wide or international?
• Definitions: Are terms such as competitor, customer, senior employee and confidential information defined with sufficient precision?
• New obligations: Does the settlement agreement impose restrictions that were not in your employment contract?

It is also worth checking the interaction with any garden leave provision. During garden leave, you remain employed and are normally paid, but may be instructed not to work or contact clients. A post-termination restriction then starts afterwards. Together, the two periods can create a lengthy practical barrier to a new role.

Can restrictive covenants be negotiated?

Yes. A proposed settlement agreement is a commercial negotiation, and restrictive covenants can form part of it. Whether an employer will agree to changes depends on the role, the reason for departure, the risk it sees and the overall settlement package.

Useful changes may include reducing the duration, limiting customer restrictions to contacts you worked with in a stated period, removing a non-compete clause, or adding a clear carve-out for a named new employer or role. If you are joining a business that overlaps only partially with your former employer, a tightly drafted exception may offer more protection than vague reassurance given in conversation.

Where an employer wants a new or stronger restriction, it is reasonable to ask why it is needed and whether the settlement payment reflects the added limitation. A payment made under a settlement agreement does not automatically make every covenant enforceable, but the commercial value of what you are being asked to give up should be considered.

Employers also benefit from clarity. Overly broad wording may create uncertainty rather than protection. A focused covenant that addresses a genuine risk is more likely to be credible, easier to explain and less likely to derail an otherwise amicable exit.

Do not overlook confidentiality and non-disparagement clauses

Restrictions on future work are only one part of the picture. Settlement agreements commonly include confidentiality clauses covering the agreement, its terms and the circumstances of termination. They may also contain non-disparagement obligations that limit negative statements about the employer or individuals.

These clauses should allow appropriate disclosures, such as speaking to a spouse or partner, professional advisers, HMRC, regulators or the police where necessary. They should not prevent protected disclosures or reporting wrongdoing. The wording should also be mutual where that is appropriate, particularly if the agreement requires you to protect the employer’s reputation.

Before you sign, ask for clear, independent advice on what you are agreeing to, how it affects your planned next move and whether the terms genuinely match the circumstances of your departure. A carefully reviewed agreement can give both sides the certainty to leave matters behind and let you take the next opportunity with confidence.