Q: Is it normal for a multi million $ company to ask to pay me in 2 payments 12 months apart & ask we drop lawsuit asap?

I was wrongfully terminated from my employment and offered a lot of money which I turned down. I hired an attorney and we filed a lawsuit. The company requested we go to mediation so we did. After a lot of going back-and-forth all day with a mediator, we finally decided on a number however, they want to be allowed to pay me in two payments 12 months apart. They’re also requesting that we drop the lawsuit immediately after the first payment and they are not OK with us going through the courts to enforce the payment either, in the event that we consider dropping the lawsuit as they’re asking. This company has proven to not play by the rules before which is why I’m questioning their intentions . I don’t understand why they can’t just pay me off at once. I just want to be done and move on with my life. Is this normal? And is it normal to still be working on the “language of the agreement” seven days after our mediation? And yes I have a lawyer but I’m not happy and need another one.

4 Lawyer Answers
David H. Relkin
David H. Relkin
Answered
  • Arbitration & Mediation Lawyer
  • Manhasset, NY

A: If you have stated the facts correctly, I would have a problem with the payout. According to your statement of the case, you have to "drop" the lawsuit after the first payment but "they are not ok with you going through the courts to enforce the payment" --[presumably] the second payment. You need to have an enforcement device to ensure the second payment is made -- a year from now. Without that, your settlement is based solely on trust with a party that "has proven to not play by the rules before." (In this respect, I would strongly suggest that there should be a penalty for the failure to make the second payment, for example, reasonable attorneys' fees of perhaps $10k. Is the Company established? Will it still be around in a year? Is it a closely-held company that could divest itself of all of its assets in a year?)

There are two ways to do this: one in the Settlement Agreement, which would make it a Stipulation of Settlement. It is likely that, given the nature of the action, they just want a Discontinuance and a private Settlement Agreement. Therefore, the second way would be more amenable: you provide that Judgment may be entered upon an affidavit of your counsel if the second payment is not made.

Finally, you need to be comfortable with your attorney and should hire one you can trust to give you the full picture.

1 user found this answer helpful

James L. Arrasmith
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Answered
  • Employment Law Lawyer
  • Sacramento, CA
  • Licensed in California

A: In California, it's not unusual for settlements in employment litigation to involve structured payments, such as the company proposing to pay you in two installments 12 months apart. This arrangement can be for various reasons, including financial planning or tax considerations for the company. However, your concern about the company's reliability based on past conduct is understandable.

The request to drop the lawsuit immediately after the first payment, coupled with their unwillingness to have court enforcement of the second payment, is a matter for careful consideration. Typically, settlement agreements include clauses that allow for legal recourse if either party does not fulfill their obligations. It's crucial to have these protective measures in place, especially given your concerns about the company's trustworthiness.

Working on the "language of the agreement" for seven days after mediation is not uncommon. Settlement agreements in complex cases can take time to draft, as they must capture all details accurately and protect both parties' interests.

If you're not satisfied with your current attorney, you have the right to seek a second opinion or hire a new attorney. It's important to feel confident in your legal representation, especially in a high-stakes negotiation like this. An attorney can provide you with advice tailored to your specific situation and help ensure that your interests are adequately protected in the settlement agreement. Remember, it's your right to have an agreement you are comfortable with, especially in a matter that significantly affects your future.

Neil Pedersen
Neil Pedersen
Answered
  • Employment Law Lawyer
  • Westminster, CA
  • Licensed in California

A: Whether something in your settlement is normal is a difficult question because very few things could be comfortably characterized as normal. There are dozens of ways that most settlement agreements can be structured. Does it happen that parties agree to allowed payments over time? Yes, of course.

Answering questions about whether your settlement agreement properly protects your interests is not an answer that can be provided here on this site. You need your lawyer to do that. If you are not able to trust your present attorney you have the unfettered right to find and hire another. You need to do that.

Good luck to you.

Tim Akpinar
Tim Akpinar
Answered
  • Arbitration & Mediation Lawyer
  • Little Neck, NY

A: Clients are generally free to dismiss their attorneys, whether in litigation or arbitration, and vice-versa, attorneys are generally free to withdraw from representation of clients. However, in some instances, this can give rise to attorney liens - depending on work performed to date and additional details. Good luck

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